Lee fulfilled his end of the bargain by finally producing a campaign good enough to convince people that Coca-Cola was an all-year-round drink rather than a summer treat with a series of Christmas ads painted by Haddon Sundblom. Born in Muskegon, Michigan, in 1899, the Swedish American artist had already made his name in advertising with his work for Maxwell House and Palmolive by the time Lee asked him to illustrate Coca-Cola’s 1931 Christmas ad. Lee wanted an illustration of Santa Claus having a refreshing pause with a Coca-Cola, and Sundblom was happy to oblige for the appropriate fee. Partially inspired by Clement C. Moore’s poem “A Visit from St. Nicholas,” Sundblom painted a smiling, ruddy-faced Santa toasting the audience with a glass of Coca-Cola. He modeled the character on his retired friend Lou Prentiss. “He embodied all the features and spirit of Santa Claus,” Sundblom explained. “The wrinkles in his face were happy wrinkles.” The advertisement proved so successful that Coca-Cola made its Santa advertisement an annual event, with Sundblom illustrating every one of them until 1964.
It is often claimed that Sundblom’s ad created the look of the modern-day Santa Claus with his red suit, black leather belt, white beard, and bobble hat. But the reality was that Sundblom simply latched onto the emerging consensus about how Santa looked. Traditionally Santa and his European forerunners had come in all shapes and sizes. Sometimes he was tall and skinny; at other times he was the squat, pipe-puffing elf from Moore’s poem. Santa’s garb also varied from the bishop’s clothing of the Dutch Sinterklaas, who would kidnap naughty children, to Britain’s Father Christmas, who wore green robes, to the present-day red-and-white outfit. Despite Santa’s mixed-up origins in folklore, paganism, and Christianity, by the time Coca-Cola hired Sundblom, the idea of St. Nick as a fat man with a big white beard dressed in red was already becoming the archetype of the Yuletide gift giver.
In fact, not only was Sundblom’s depiction simply tapping into a wider trend, but this popular vision of Santa had even been used to promote soda pop before. The Santa in White Rock’s 1915 Christmas ads looked much like Coca-Cola’s Santa, although he preferred to make his festive deliveries of the Wisconsin soda firm’s drinks by automobile or biplane rather than by sleigh and magic reindeer. A few years later in 1923, White Rock was running Christmas ads in color magazines showing a Santa almost indistinguishable from Sundblom’s enjoying a whiskey and a White Rock ginger ale while catching up on his mail. Luckily for Santa, Prohibition didn't apply in Lapland. But while Coca-Cola’s Santa was not by any stretch of the imagination the origin of the modern-day St Nick, it probably sealed the deal once and for all with its ubiquitous year-in, year-out Christmas advertising muscle.
Not that all its extra advertising, Coke-guzzling Santas, and statistical wizardry worked miracles. Coca-Cola sales flat-lined in the Depression, the growth of the 1920s replaced with stagnation. Compared to most of its rivals, though, this was a good result. Charles Hires watched sales of his root beer fall off a cliff, dropping 60 percent between 1930 and 1935. Nor were sales of Hires’ temperance drink helped by the end of Prohibition in April 1933. The noble experiment had proved little more than the naivete of the temperance campaign. In the hope that the return of the liquor industry could help the moribund economy, the federal government consigned the Volstead Act and Eighteenth Amendment to the trash can of history.
The return of alcohol worried the soda industry. In the first six months of Prohibition, soda sales leaped by 200 percent and kept rising all the way up to the Great Depression. The question now haunting the industry was whether the repeal of Prohibition would reverse all of that. Would people still want a Coke when beer was readily available? Would they still need ginger ale in their drink when distilled liquor didn't taste like gasoline? The breweries hoped not. Schoenhofen Edelweiss greeted the end of Prohibition by sidelining Green River, the soda that saw it through the dry years, and refocusing on beer. Soon the breweries that survived by making smoked ham and ice cream were poised for a glorious return.
At Coke, vice president of sales Harrison Jones was particularly twitchy. He wrote to Woodruff warning that the brewers would be a serious threat to Coca-Cola. They were buying ads like crazy, he noted in one memo. In another he urged Woodruff to launch a Coca-Cola beer to grab a share of the expected post-prohibition liquor boom. Woodruff dismissed the proposal. Coca-Cola made Coca-Cola, nothing else. At first it looked as if Jones was right. After several years of flat sales, 1934 saw Coca-Cola’s revenues dip by about 25 percent to $31.2 million. But the hit was short-lived, and in 1938 the company’s annual sales reached a new high of $75.8 million. Coca-Cola had survived once again.
Coca-Cola wasn't the only soda company to buck the trend for decline in the Depression. Another success story was the lemon-lime drink 7Up. Its creator Charles Leiper Grigg was born in 1868 in a log cabin in Price’s Branch, a tiny hamlet in Montgomery County, Missouri, with a population of just twenty-five people. As a child Griggs became obsessed by mail-order catalogs and the array of wonderful goods on offer within their appealing pages. He was still obsessing about catalogs at the age of twenty-two when he wrote to a St. Louis mail-order company to tell them that their catalog wasn't up to scratch and explained how it could be improved. “If you think you can do better, come to St Louis and do it,” the firm replied. So he did.
Grigg spent the next three decades working in various St. Louis companies. In 1918, he ended up as an advertising executive for Whistle Orange Soda, the creation of local businessman Vess Jones. But Grigg didn't get along with his new boss, so in 1919 he walked and started work on an orange soda of his own. He obtained funding for the new company from his friend Edmund Ridgway, who had made his fortune investing in mining. In 1920, Grigg launched Howdy—a lightly carbonated but very sweet orange-flavored soda. Although Griggs and Ridgway had built a network of nearly four hundred bottlers by the mid-1920s, Howdy struggled, overshadowed by the rapid rise of Orange Crush, a rival orange soda from Chicago. Orange Crush was booming on the back of doctors recommending orange juice as a source of vitamin C, because the soda contained orange juice rather than the essential oils of the fruit’s peel that were used in Howdy. Grigg found his beverage under attack from rivals for its lack of juice, and new laws forced him to label Howdy an orange-flavored drink rather than an orange drink. He hated the obsession with juice and pulp, and he refused to change Howdy’s formula “simply in order to line up with a pseudo-consumerist notion that the addition of orange juice makes a better product.”