During the Cold War, one of the not-so-secret secrets was that, despite embargoes on many goods in the Soviet Union, western companies tried desperately to enter the Soviet market. And western consumer goods were in high demand despite the communist rhetoric about the evils of capitalism. One American corporation that desperately desired to enter the Russian market was PepsiCo, the food and soft drink conglomerate.

Long the number two cola company behind Coca-Cola, Pepsi knew that if they could somehow leverage an entre into the USSR, the fiscal reward would be substantial. Besides, there would be the tremendous free publicity that such a news event would generate for the company as the first and only American company in the communist country. Pepsi, after tense and lengthy negotiations, finally was able to enter the USSR market in 1972. Within a very short period, the company was making upwards of half a billion dollars a year in Russia; the drink was incredibly popular (and had the cache of being a “forbidden” decadent western company) with no rival, giving Pepsi a monopoly in the market.

But there was a major catch. Rubles, the Russian currency, was not tradable or usable in the US or most western banks, especially in the amounts Pepsi was making them in Russia. Besides, the country didn’t allow their currency to leave the USSR in such large amounts. So, another round of fierce negotiations followed, and a comprise of sorts was reached. Where there’s money to be made, it is interesting how creative solutions can be found. And that’s what happened here. The leadership of the USSR offered to pay Pepsi not in rubles but, rather in trade goods. Pepsi could then take the trade goods, sell them in the west, and take the profits. While the extra step was not ideal, the amount of money the company was making (and would continue to make as the monopoly) proved to be more important than having to basically become a middle man for Russian trade goods.

The first round of Russian goods to be swapped for Pepsi products was, you guessed it, vodka. And that worked for a while; Pepsi simply opened a liquor branch of the company and sold the vodka in the US and other western nations. This worked for a while, but then the United States and its allies began a boycott of all Soviet goods because of the Russian continued invasion and occupation of Afghanistan in the 1980s. Pepsi then had no way of turning their soda profits into raw cash anymore. The company then approached the Soviet hierarchy and asked if they had any other products that they could trade that Pepsi could then turn and sell to recoup their money.

And, of course, the Soviets did. And they traded these products throughout the 1980s and early ’90s, and Pepsi managed to turn the trade goods into cash…eventually. By the way, Russia is still PepsiCo’s second largest market after the United States. Of course, today, with the collapse of the Soviet Union and the communist system, Pepsi is paid in cash. But, for a time, because of the unusual circumstances, the company received metal that they, in turn, sold as scrap. And that metal was in the form of old Soviet warships and submarines.

As a result, for a time in the early 1990s, PepsiCo had the 6th largest navy in the world.