The local Coke representative, however, denied the request, knowing full well Coke was the most popular soda in the country and not one to be pushed around by its customers. Frustrated, Hatcher told the representative he’d purchased his last case of Coca-Cola, and vowed to develop his own brand. After months spent tinkering in the basement of Hatcher Grocery, Claud came up with Royal Crown Ginger Ale, an effervescent alternative to Coke’s caramel-colored (and formerly cocaine-laced) bestseller. The drink, with its regal-sounding name, proved quite popular, and soon Hatcher and his father ditched the grocery gig to become full-time soda bottlers. Claud’s next development was Chero-Cola, a cherry-flavored cola that would grow the company into a legitimate soda maker and, inevitably, put him in direct competition with the brand he used to sell.
In the early 1900s, like today, Coca-Cola was far and away the most profitable soda company in the United States. And with that success came numerous imitators eager to cash in on the market it had created. According to Tristan Donovan, author of Fizz: How Soda Shook Up the World , these included knockoffs like Candy-Cola, Kos-Kola, and Coke-Ola. There was even a cola called Klu Ko Kolo, made to attract those suddenly interested in the Ku Klux Klan after the group was featured in D.W. To maintain its dominance in the industry, the company began suing these imitators for trademark infringement. Over the next three decades, Coca-Cola sued more than 500 copycat manufacturers, according to Donovan, and won more often than not. Caught in the crosshairs were Claud Hatcher and Chero-Cola, which Coke argued could not use the term “cola” in its name. Hatcher fought the lawsuit, and continued to fight it for several years while simultaneously building Chero-Cola’s distribution to more than 700 franchise bottlers. His soda was no mere imitator, Hatcher would claim time and again, and he would not be bullied out of business. In 1923, a judge ruled in Coca-Cola’s favor, saying that Chero-Cola was in violation of Coke’s trademark.
That meant Hatcher had to drop “cola” from his company’s name, thereby costing him valuable brand recognition. A drink called “Chero” just didn’t sound the same, and sure enough, Chero sales slipped. After a few years Hatcher changed the company’s name to that of his most popular fruit drink, Nehi (pronounced “knee-high”). The Great Depression put a dent in Nehi’s sales, just as it did for other soda companies. To make matters worse, Claud Hatcher died in 1933, leaving Nehi in the hands of its sales director, H.R. What looked to be a disaster, though, turned out to be just the opportunity the company needed. Immediately after taking over, he jettisoned poor-performing drinks and focused the company’s efforts on top sellers. He also re-introduced Chero-Cola without the cherry flavoring, and under a new name—one that, after two turbulent decades, harkened back to the company’s beginnings. In 1934, Nehi came out with Royal Crown, and over the next several years its sales increased tenfold. The middle of the 20th century brought one win after another for Nehi. In 1944, the courts ruled that Coke did not, in fact, own the word “cola,” thus allowing Royal Crown to become Royal Crown Cola, or RC Cola. With nationwide distribution and sales on the up and up, Nehi shoveled money into print and television ads featuring stars like Bing Crosby, Joan Crawford, Shirley Temple, and Lucille Ball. And this wasn’t just an empty boast: Nehi had staged public taste tests across the country pitting RC against competitors Coke and Pepsi, and declared itself the winner. It was the first time a beverage company had ever done such a promotion. Whether or not the tests were rigged in some way is up for debate; what mattered was that people believed them. Slowly, steadily, RC muscled its way into soda fountains and onto grocery store shelves. To stay top-of-mind with consumers, it continued to innovate. In 1954, it became the first company to nationally distribute soda in aluminum cans. Shortly after, it began selling soda in 16-ounce bottles as an alternative size for thirsty fans. In 1959, Nehi changed its name to match its bestselling product, becoming the Royal Crown Cola Company. But while Royal Crown had made significant progress, it would continue to trail Coke and Pepsi so long as it continued to sell a similar product. In 1952, the founder of a sanitarium in Williamsburg, Brooklyn named Hyman Kirsch invented a sugar-free soda called No-Cal . Available in ginger ale and black cherry, No-Cal was made specifically for patients in Kirsch's sanitarium who were either diabetic or suffering from heart ailments. Kirsch quickly discovered that his drink had a much wider appeal, and along with his son began making other flavors, like chocolate, root beer, and cherry. The two sold No-Cal to local stores and quickly built up a distribution network that extended throughout New York and the northeast.
Since Kirsch wasn’t a businessman, however, he struggled to expand beyond the regional market. He also continued marketing No-Cal mainly toward diabetic customers, further limiting his reach. Kirsch’s success caught the eye of the Royal Crown Cola Company. In the mid '50s, it began secretly developing its own diet soft drink—one that would appeal not just to diabetics, but to an entire nation of increasingly calorie-conscious consumers. While other food and beverage companies continued to push everything sweet, salty, and delicious, RC recognized a budding demand for healthier choices. After a few years RC came out with Diet Rite, a drink that the company believed would be the breakthrough it so desperately needed. Test markets had emphatically confirmed its appeal. One, in South Carolina, saw supermarket managers clamoring for the product. “In Greenville, S.C., where we had been running a poor third behind Coke and Pepsi, we actually had grocery store managers getting into their cars and chasing down RC trucks to get Diet Rite on their shelves,” one RC rep noted.
It wasn’t just that Diet Rite was nearly calorie-free—it’s that it was nearly calorie-free and tasted strikingly similar to the real thing.