Guth apparently had spent most of his life prior to the Depression as a fairly successful entrepreneur in the soft drink and confectionary industries. He joined Loft, Inc., a chain of confectionary stores, in 1929; and the following year he became president.
In 1931 the company’s trademark and assets were picked up by Charles G. Guth founder of the modern Pepsi-Cola. He established a new Pepsi-Cola Company, had a chemist formulate a better drink, set up new bottling operations, and began merchandising a hugely successful 12-ounce bottle for five cents.
During the time that Loft, Inc., was negotiating with Coca-Cola, Guth set up a new corporation to acquire the secret formula and trademark of Pepsi Cola. However, this was done without the board’s knowledge and Loft, Inc., was never given the opportunity to participate.
In 1931, Pepsi was on the verge of bankruptcy for the second time in twelve years. In desperation, Charles G. Guth tested a risky strategy : cutting prices. After buying a stock of recycled beer bottles, it offered 36 cl Pepsi at the same price as 18 cl of Coca-Cola. The brand was saved in 1936 and Pepsi made a profit of $ 2.1 million. Then $ 4.2 million in 1938.
Who is Charles G. Guth?
