When Pepsi Was a Racial Pioneer

PEPSI IN THE NEWS!

Reprinted: By CARLY BERWICK • Bloomberg News • 2008

NEW YORK -- In 1940, Pepsi-Cola Co. President Walter S. Mack, competing against the behemoth Coca-Cola Co., made a historic marketing decision: to hire the company's first black salesmen to target black consumers.
"The Real Pepsi Challenge: Breaking the Color Barrier in American Business," is a gently didactic exhibition at the Queens Museum of Art. Through news clippings, letters, vintage audio recordings and contemporary video interviews, it tells the story of the 12 black men who worked at Pepsi as their "special markets" sales team from 1940 to 1951.
Blacks made up a consumer market of an estimated $8 billion at the time, yet most corporations, by design or neglect, never considered the demographic in their sales pitches.
Mack's hiring of Herman T. Smith as its first black salesman was so unusual it got a mention in the March 18, 1940, edition of the New York Times, which is reproduced in the exhibition.
So, too, are numerous columns from the Chicago Defender, one of the many black papers that chronicled the comings and goings of the Pepsi salesmen as if they were celebrities -- which, in a way, they were.
Photographs of the Pepsi special-markets team show confident men in fashionable suits. With sugar rationing during World War II, the team sputtered as did Pepsi's fortunes. Then, in 1947, former actor and National Urban League organizer Ed Boyd took over the team and reinvigorated its efforts.
Boyd brought in top talent to sell Pepsi to black consumers and to bottlers, who often required extra convincing to send more soda to black communities.
The segregated South was hostile territory for the salesmen, who had to explain to corporate accounting why they never submitted hotel receipts: Hotels wouldn't let them stay there.
Even Mack and other self-identified liberal Northerners used egregious slurs, and Pepsi itself continued to run racist advertisements. One 1944 ad shows black-faced "natives" hailing the Pepsi skywriters from their tropical island.

Pitch letters, in pristine condition, that Boyd wrote to bottlers are particularly moving. He experimented with innovative marketing strategies, such as offering to print free football schedules for black colleges. One 1948 letter detailing the program begins: "Dear Sir, I am sure you are aware of the interest this Company has shown in worthwhile activities among the Negro race."
This was the advent of niche marketing, and it worked. Sales in targeted communities shot up over one concerted two-week campaign by 13 percent.
PepsiCo Inc. (the company changed its name in 1965) is a sponsor of the exhibition

For the complete story - you can check out the book "The Real Pepsi Challenge" by Stephanie Capparell