Tag: Soda

On a Sucker

Marvin Stone is one of those clever American inventors of the 1800s who came up with something so simple and so commonplace that we can’t imagine that anyone had to come up with it at all. Marvin was born in 1842 in Ohio, and his father was also an inventor. The boy grew up working with his father in the workshop, learning how to approach a problem from a mechanical engineering perspective. He began Oberlin College but his studies were interrupted by the outbreak of the American Civil War in 1861.

Marvin served in the United States Army with distinction during the war, fighting in such battles as Lookout Mountain in Tennessee (where he was injured) and also served in an administrative position in Washington, D.C. After the war, Marvin was restless, first thinking about pursuing a theology career and also working for a time as a newspaper reporter. But the years growing up at his father’s side in the workshop called to him, and he returned to his roots as an inventor.

He soon made a contract with the Duke Tobacco Company in D.C. He is credited with inventing one of the first machines that rolled cigarettes. The Civil War had seen the decline of pipe smoking and the beginning of soldiers and the public turning to rolling cigarettes. Marvin’s invention made that process consistent and mechanized. Duke paid Marvin’s firm to make the rollers which they took and sold to the public. Soon, he built a factory to handle the demand for the cigarette roller. It made Marvin a comfortable living. He married a woman named Jennie Platt and settled down in the Washington area.

Marvin was generous with his new wealth. He built lodgings for the single female employees of his factory, for example, gave his workers with healthcare, and provided them with access to libraries and education in their off hours at a time when such a thing was unheard of. In addition, after seeing the deplorable living conditions of some minority residents of Washington, Marvin spearheaded efforts to build better housing for those residents at his own expense. For his efforts, his fellow manufacturing tycoons made fun of Marvin. He was one of those soft touches, they said, a real sucker. But Marvin knew that it was the right thing to do.

One hot summer afternoon, Jennie and Marvin were enjoying some drinks on their front porch. The drinks were mint juleps, if you must know. And while the drinks were refreshing on the stifling Washington day, while sipping them, Marvin had an epiphany. He began to do some research on his idea. What Marvin found was that his idea wasn’t new, and that disappointed him. Turns out, both the ancient Sumerians and Egyptians as well as the first civilizations of South America had come up with the idea. However, not all of his research was negative. It seemed that no new technology had been developed since the olden days, and that told Marvin that he could make a new version of what those old civilizations had first developed.

Soon, Marvin developed a prototype. It was 8 1/2 inches (22cm) long, made of paper and coated with wax. And it worked. Marvin patented the product in 1888. Cheap to mass produce, Marvin soon re-tooled a part of his factory to begin to produce the new product. Within a few months, Marvin began making more money from the sale of his new invention than he did from the cigarette rollers. Sadly, Marvin didn’t live to see how popular his creation became, how universal his invention was to be to the modern world of the 20th Century. He died after a long illness in 1899, leaving Jennie with a sizeable inheritance. And he left you and me a legacy that we enjoy today, when you go to a fast food place and get a drink or stop at a Buc-ee’s for a soda. Yes, we should think of that sucker, Marvin Stone, every time we take a sip of our drinks through his most important invention.

The straw.

On a Business Deal

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.