In 1893, a local Pharmacist invented a drink named Pepsi Cola and started a company which by 1915 had $1 million in assets. However, on May 31, 1923, his company officially declared bankruptcy. Who was he and what happened?
Caleb Bradham grew up in Chinquapin, North Carolina, and graduated from UNC at Chapel Hill. He dropped out of medical school at the University of Maryland due to his father’s bankruptcy. He taught school in New Bern at the Vance Academy, and was able to then enroll at the University of Maryland School of Pharmacy. After graduation, he returned to New Bern and opened Bradham’s Pharmacy at the corner of Middle and Pollock Streets. Most drug stores at that time had soda fountains and featured various drinks. Caleb concocted a popular drink that his friends named “Brad’s Drink” in honor of Bradham. He renamed the drink Pepsi-Cola (thought to be a combination of Pepsin and Cola as he thought the drink would aid digestion). The drink sold well and Bradham decided to manufacture and patent it. The syrup was sold to drug stores where it was mixed with soda and sold as Pepsi-Cola. In 1903 he registered the trademark and soon gave up managing his pharmacy to devote all his time to this new company.
Bradham was a talented salesman and visionary businessman. Pepsi was so successful that in 1905, Bradham began to bottle his product and sell it to grocery stores. He hired two bottling companies to keep up with the demand and created many jobs in New Bern and across the Southeast. He began selling franchises, starting with two in 1905. By 1910 he had 300 bottlers in 24 states and held the first Bottlers Convention in New Bern. Bradham began innovative advertising campaigns featuring famous people, the first of whom was race car driver Barney Oldfield. Due to the high demand for products, Pepsi was one of the first companies to ship products via motorized transportation rather than horses.
Caleb Bradham was involved in all aspects of his business, but he also participated in community affairs. He served as the Chairman of the Craven County Commissioners, President of the People’s Bank of New Bern, Exalted Ruler of the Elks, as well as many other clubs and services. He was a member of the Naval Reserve for twenty-five years, retiring as a Rear Admiral. He funded the Bradham Prize for thirty years, a yearly scholarship at UNC for the Pharmacy student with the highest average.
Despite much success, sugar prices contributed to the end of the company. During WWI, sugar was rationed, creating production problems. After the war, sugar prices fluctuated, and Bradham stockpiled sugar, predicting that the price would increase again. He purchased sugar at twenty-eight cents per pound, but in a short time, the price plummeted to five cents per pound. His customers refused to pay more than five cents per soda bottle, and Bradham could not meet production costs. Despite his attempt to reorganize, Bradham was forced to file for bankruptcy in May 1923 and the company was sold to creditors for $30,000. Caleb Bradham returned to his pharmacy but after a long illness, died on February 19, 1934. He is buried at Cedar Grove Cemetery.