Here’s a bizarre accident of world history: Pepsi briefly owned the sixth-largest navy on the planet. By “navy,” I do indeed mean a fleet of warships. And by “Pepsi,” I mean the soda company. While the hippies at Coca-Cola were singing ditties like “Buy the World a Coke,” PepsiCo was buying up the big guns in backroom deals with the Soviets. At its height, the mightiest fleet of the Soda Wars included:

• 1 frigate
• 1 cruiser
• 1 destroyer
• 17 submarines
• An undisclosed number of PT boats

PepsiCo invades untapped markets

In 1965, the Pepsi-Cola Company and Frito-Lay merged to form one of the biggest corporations on the planet: PepsiCo. Pepsi’s U.S. cola market share had been lagging behind Coke for decades, so PepsiCo had to get creative. It spun a globe and asked, “Where are the untapped soda markets?”

CEO Donald M. Kendall worked his way into President Nixon’s entourage. And when Chinese officials first broke bread with President Nixon, there was Pepsi on the table.

In 1959, Nixon made a famous trip to Moscow. The biggest photo opp of the journey was Nixon walking Prime Minister Nikita Khrushchev through a model American home in the “U.S. National Exhibition” he’d set up. It led to the world-famous “kitchen debate.” While arguing with President Nixon about the virtues of communism, Khrushchev sipped—yes, you guessed it—a Pepsi.

Khrushchev wasn’t enthusiastic about the drink. But it was all the opening PepsiCo needed. The company worked with the USSR to develop bottling plants in multiple Soviet countries. The Soviet government was allowed to mix, bottle, and distribute soda labeled as “Pepsi,” as long as it purchased soda concentrate from PepsiCo. The Soviet government was all for giving its people a sweet taste of American culture. There was only one problem: the embargo prevented PepsiCo from outright selling products to Russia. So it bartered—for vodka.

PepsiCo shipped soda concentrate to the USSR. The Soviets sent back bottles of Stolichnaya vodka, and the huge PepsiCo corporation had yet another product to distribute worldwide. But then things got out of control. The USSR’s appetite for soda soon outpaced the world’s appetite for Russian vodka. When Russia invaded Afghanistan, many Americans boycotted Stoli. As a result, the Soviet Union ended up deeply in debt to PepsiCo.

PepsiCo trades submarines for soda

By 1989, the Soviet Union had a lot more debts to worry about than its little PepsiCo bill. But as the Union threatened to crumble, the government decided its people needed a morale boost. It needed a fresh influx of soda concentrate to keep its Pepsi bottling plants rolling. And with the Cold War cooling, it decided it needed Pepsi more than it needed weapons–or boats.

Kendall brokers a pair of deals totaling $3 billion. Pepsi took possession of a fleet of outdated Soviet ships in exchange for soda concentrate. On paper, PepsiCo briefly surpassed India as the owner of the world’s sixth-largest navy. In truth, any hope it had of hanging onto the vessels long enough to get multiple navies bidding disintegrated faster than the Soviet Union. In the end, Pepsi just bought a collection of old vessels barely able to sail themselves to a Norwegian scrapyard.

In 2004, Vladmir Putin awarded Donald M. Kendall the Order of Friendship for pioneering commerce with Russia. In 2020 alone, PepsiCo made $3 billion in Russia. Pepsi didn’t conquer the Soviet Union with missiles—it did it with corn syrup and marketing. The ships got scrapped. But American soda is still flowing in Moscow. Learn more about Pepsi’s wild naval deal in the video embedded below: