| |
Chapter One
A SOFT DRINK COMPANY IS BORN
|
|
Royal
Crown Company Inc., originally called the Union
Bottling Works, was born in Columbus, Ga. in
1905. A young graduate pharmacist, Claud A.
Hatcher, began creating his own soft drinks
in the basement of his family's wholesale grocery
business. From these humble beginnings, Royal
Crown Cola Co. grew to be the third largest
soft drink company in America.
|
 |
|
| |
At
first, the Hatcher Grocery Co. purchased bottled drinks
from a local bottler and resold them to its grocery
customers. As this part of the business grew, Mr. Hatcher
insisted that the bottler pay the company a commission
or compensate him in some way for handling the drinks.
A dispute arose and Mr. Hatcher concluded that his company
had purchased its last case of drinks from an outsider.
Henceforth, it would produce and bottle its own drinks
under its own labels.
|
| |
The
first line of beverages was named Royal Crown, and the
first cola drink that he devised was called Chero-Cola.
Subsequent generations were to apply the Royal Crown
trademark to a cola, and it was to become so important
that the corporation would be renamed "Royal Crown
Cola Co."
|
| |
Shortly
after the Hatcher Grocery Company decided to engage
in the manufacture of soft drinks, its officials
organized the wholly owned Union Bottling Works.
The manufacture and bottling of soft drink syrups
continued within the framework of the Union Bottling
Works until 1912, when the newly organized Chero-Cola
Co. took over the business and vastly expanded it.
|
 |
|
| |
Among the
early products were Royal Crown Ginger Ale, Royal Crown
Strawberry, Royal Crown Root Beer and Chero-Cola.
|
| |
As
the sales of carbonated beverages by the Hatcher
Grocery Co. became more important, it was decided
to incorporate the Chero-Cola Co. In 1912, a charter
was granted by Judge S. Price Gilbert in Muscogee
County Superior Court of Columbus. The company was
to manufacture a line of syrups and flavour concentrates
to be sold to franchised bottlers who bottle and
sell these concentrates and syrups under trademarks
owned by the Chero-Cola Co.
In April of 1914, Chero-Cola Co. filed application
in the United States Patent Office to register its
trademark, Chero-Cola. The Coca-Cola Company then
instituted a law suit that lasted for more than
nine years.
|
 |
|
| |
In fact,
litigation concerning the use of the company's trademark
continued in one form or another until 1944 when the final
victory was won by Royal Crown Cola Co., setting for all
times its right to use the word "cola" in the
name of its beverages. The
years 1914 - 1920 showed steady, but at times, rapid
growth in sales. Both profits and company assets increased
steadily. |
| |
THE FIRST CRISIS
Chero-Cola Co. faced
its first crisis during World War I. In 1918, the Food
Administration imposed a severe limitation on the use
of sugar by less essential food products, which included
soft drinks. This limitation failed to ease the sugar
crisis, and in the latter part of 1918, a meeting was
held by government officials for the purpose of declaring
the soft drink industry non-essential and ordering it
to be closed up for the duration of the war. However
on presentation of the facts showing the widespread
nature of the industry, its aggregate size and importance,
the threat failed to materialize.
|
| |
| As
a first effort to relieve the sugar shortage,
Chero-Cola Co. established and operated its
own sugar refinery. |
 |
|
| It
purchased a supply of raw sugar from Cuba. Chero-Cola
Co. operated the refinery for a period of about
three years. The refinery was not able to furnish
the entire sugar requirements of the company, and
its output had to be supplemented by the purchase
of refined sugar. After approximately two-million
dollars worth of sugar had been purchased, filling
to capacity every company warehouse in Columbus,
the inevitable occurred. The price of sugar dropped
drastically. It hit a low of eight cents a pound
in December of 1920. |
| To
compound the troubles of the struggling company,
the depression was well within sight. During the
years, 1922 - 1924 common stock was sold in order
to raise capital. It was not until 1926 that all
of the debts of the company incurred during this
first crisis were finally paid. The continuous growth
and successful operation of the company during the
years of 1912 through 1919 had generated a firm
confidence in the business and its management. Without
that confidence, the permanent financing which enabled
the corporation to survive its first crisis could
not have been obtained. |
 |
|
| |
It
was during this severe sugar shortage that a basic
change in the operations of Chero-Cola took place.
Heretofore all of its products were made and shipped
in the form of finished bottling syrup, with all
the ingredients, including sugar, already added.
|
 |
|
| |
Nothing
had to be added by the bottler except water and carbonation.
The sugar crisis,
along with the sky-rocketing price of sugar as a result
of the shortage, forced Chero-Cola Co. to consider some
other forms of manufacturing.
Therefore,
it was during the first half of the 1920s that the Chero-Cola
Co. began to ship its products to bottlers in the form
of concentrates instead of syrup. This procedure required
the bottler to add pure cane sugar and water to the
concentrate. At that time, one gallon of concentrate
yielded 26 gallons of soft drink syrup. This resulted
in savings, both in the container and in the freight
cost. It also enabled the finished beverage to have
a fresher taste. The policy of shipping concentrates
instead of syrups has continued to the present day.
|
| |
When the
policy of franchising bottling plants was instituted in
1912, the first bottling plants, quite naturally, were
in the southeast. Prior to World War I, Chero-Cola had
acquired about 25 new bottlers each year. During the war
and thereafter, because of the sugar shortage and economic
conditions, no extensive effort was made to further expand
the bottler network until 1922. Even so, by the close
of 1921 there were over 200 plants in the bottler organization.
From the beginning, the company had sought to establish
its bottlers on a sound and permanent basis. |
| |
It had never
been willing to grant an exclusive franchise or to sell
its products to just any bottler willing to accept them. |
| |
|
