THE ROARING 20'S
By 1925, Chero-Cola Co. had 315 plants located primarily in the 14 southern states. Of these, 310 were bottling Chero-Cola and 263 plants were franchised for the company's fruit flavour products now sold under the Nehi brand name. During 1926 and 1927, additional plants were added, bringing the total to 463.
In the years following 1927, the policy of the company was to expand in the areas where there was no distribution, and to consolidate its smaller unprofitable plants with a view towards creating a stronger bottler organization. It is interesting to note that soft drink bottling plants, not only for Chero-Cols Co., but indeed for the nation, reached their numerical peak in the late 1920's. Since that date, the tendency has been toward consolidation of smaller plants into larger ones.
THE BIRTH OF NEHI
The Nehi line of fruit flavours (orange, grape, root beer, etc.) was introduced in 1924, and the line became so successful that in 1928 the company changed its name for the second time, from Chero-Cola Co. to the Nehi Corporation. The Nehi Corp. was listed on the New York Curb Exchange. In 1930, the company's second major crisis occurred.
Reflecting the Great Depression which followed to stock market crash of October 1929, sales of Nehi Corp. dropped one million dollars in 1930 from a high of $3.7 million in the previous year. Sales continued downward until the bottom was reached in 1932, the only year in which the company had ever lost money. Almost every Nehi bottling plant in the organization was in the red during the years 1931 and 1932.
By 1933, the low point had been passed and the business was just beginning to stabilize when another tragedy struck. Claud A. Hatcher, the company's president and guiding light from its formation, died suddenly December 31, 1933.
One of Mr. Hatcher's greatest interests other than the company was in the education of deserving young people. In his will he provided for the establishment of the Pichett-Hatcher Education Fund as a memorial to Devitt Pickett, his life long friend and business associate. By 1968, this fund had assets of almost five million dollars and was one of the largest student loan funds of its kind in America.
Mr. Hatcher was succeeded as president by H. R. Mott, who was faced with the grim depression as he took office in 1934. Mr Mott had been vice president of the Nehi Corporation for several years, and had been associated with the company since 1920. as new president he was greeted with a great amount of debt, and his consuming ambition was to make the company free of debt as quickly as possible and keep it that way. He streamlined operations, obtained extensions of credit, cut expenses and within a year had attained his goal. The Nehi Corporation was debt-free and ready to move ahead once more.
During the course of this crucial year, Mott came to the conclusion the company needed a different, more improved cola product. He called in the company chemist, Rufas Kamm, and asked him to take on the project. Six months later Kamm's new cola concentrate was sent to selected bottlers for test marketing. It was an instant triumph, and it was decided to give this new cola product the brand name of Hatcher's original ginger ale creation - Royal Crown.
A Nehi bottler named Grubb from Dothan, Alabama was one of the first to bottle the new Royal Crown Cola. He made a special trip to Columbus to tell Mott "You've got something here!" Other test bottlers agreed, and so did consumers, who paid the new cola the supreme compliment of abbreviating its name from Royal Crown to "RC," a designation that continues today.
In the middle of the depression, when money was tight, RC was selling in a big 12 ounce bottle for just 5 cents. All over the South, customers purchased it and liked it, and the lines on the Nehi Corporation sales chart began to climb. By 1940, when H.R. Mott moved up to Chairman of the Board and relinquished the Presidency of Nehi Corporation to C.C. Colbert, the company was profitable and growing fast. 1940 was also the year that Nehi stock was listed on the New York Stock Exchange. C.C. Colbert served as president of the company from 1940 to 1955, during which time he directed the company in its most rapid expansion to date - expansion in terms of sales and profits, and most important of all, strengthening of the bottler organization.
BEST BY TASTE TEST
One of the most significant parts of the advertising program of that era was the "Believe It or Not" radio program starring Robert Ripley. Mr Ripley was on the air for Royal Crow Cola from coast to coast over the CBS network every Friday evening. It is estimated that in a period of one year, his program reached a total of 11.2 million families.
Colour advertisements for Royal Crown Cola were being inserted in the "Saturday Evening Post" and "Good Housekeeping" magazines. It was in this period that Batten, Barton, Durstine and Osborn (BBD&O), along with the company, launched a nation wide campaign to show that Royal Crown Cola was the unquestioned winner in independent, certified taste tests. Thus, the slogan "Best By Taste Test" came into being.
It was also during this period that the company first began to make wide use of national newspaper advertising, starting in March of 1940 with simultaneous ads in some 600 daily newspapers throughout America.
By the end of 1940, the company's products were available in forty-seven of the forty-eight states.
During the years of World War II, the Nehi Corporation and its bottlers were necessarily limited in their growth. Many thousands of employees joined the Armed Forces and most of the materials needed in the operation of the businesses were in short supply. This was mainly a period of holding action for the company and its bottlers.
In 1946, the pace for Nehi Corporation accelerated tremendously. The company began to enhance its advertising by using entertainment celebrities. Bing Crosby, Joan Crawford (before inheriting Pepsi), Bob Hope and many others joined in selling the products of Nehi Corporation.
When World War II was over, the company and its bottlers joined whole-heartedly in a progressive program of expansion and improvement that made 1947 one of the great years in the history of the enterprise. In that year, glamorous Hedy Lamarr was pictured in point of purchase advertising signs.