Pepsi Briefly Had the 6th Largest Navy in the World

PepsiCo's relationship with the Soviet Union began in 1972 when it became the first American consumer product sold in the USSR, as part of a trade deal brokered during detente. The Soviets had no hard currency to pay for Pepsi, so they paid with the one thing they had plenty of: Stolichnaya vodka.

The arrangement worked for nearly two decades. Pepsi shipped syrup east; vodka flowed west. PepsiCo's CEO Donald Kendall had personally brokered the original deal with Nikita Khrushchev, and he maintained the relationship through multiple Soviet leaders.

The Vodka Market Collapses

By the late 1980s, the vodka market had softened and the arrangement needed renegotiating. The Soviets wanted $3 billion worth of Pepsi products, but their economy was crumbling. They had no dollars, and vodka alone couldn't cover the bill anymore.

So they offered something else entirely.

17 Submarines and a Destroyer

In 1989, the Soviet Union offered Pepsi military hardware: 17 submarines, a cruiser, a frigate, and a destroyer. These were decommissioned vessels - old, rusting, and no longer combat-ready - but they were real naval warships. In exchange, Pepsi would supply $3 billion worth of products to the Soviet Union.

PepsiCo accepted. For a brief, surreal moment, the Pepsi corporation possessed the 6th largest submarine fleet in the world - more submarines than all but five sovereign nations.

The Quote That Made History

PepsiCo's CEO Donald Kendall reportedly told Brent Scowcroft, President George H.W. Bush's National Security Advisor: "We're disarming the Soviet Union faster than you are."

Scrapped Before the Ink Dried

Pepsi had no interest in operating a navy. The vessels were immediately shipped to a Norwegian shipyard and sold for scrap metal. The submarines were dismantled and recycled. Whatever strategic value they once held was converted into raw steel and whatever money the scrap fetched.

The deal itself collapsed along with the Soviet Union. As Russia opened to Western markets, Coca-Cola moved in aggressively and eventually captured the Russian cola market that Pepsi had monopolized for two decades.

But for one glorious moment in 1989, a soft drink company had more submarines than most countries on Earth.