How a beloved Los Angeles soda shop stood up to Pepsi

When I arrive at Galco’s Old World Grocery, the last thing I expect owner John Nese to talk about is the future. After all, in its current format, Galco’s has been around Los Angeles’ Highland Park neighborhood since 1955, and in one form or another, the grocery store dates back to when the city was a sleepy border town in 1897.

Nese is excitable, bubbling with energy on what seems to be a pretty typical Thursday for the store. A few people wander in, wander out. They look straight ahead, into the aisles, and notice lots and lots of soda. More soda than they’re used to. More soda than they might be comfortable with, even if they’re people who love soda, because all of it comes from unfamiliar labels. Which is what John Nese and Galco’s Old World Grocery has become known for in the last two decades: selling sodas from around the world.

Nese wants to talk about gentrification and how its high costs are changing Highland Park.

“There are more homeless people in Highland Park right now than there’s ever been, because people can’t afford to live in Los Angeles,” he says. “It’s a huge cost in human-ness.”

Nese knows the costs of Angeleno gentrification deeply: he grew up in Chavez Ravine, where his father herded goats before the city infamously removed all denizens in order to build Dodger Stadium. Chavez Ravine was mostly Mexican, but Nese remembers his Italian family fitting in perfectly: his mother would go next door to learn how to cook enchiladas, while she would teach spaghetti to anyone willing to listen. He never realized his family was poor until people told him he was, but it never fazed him: “How many kids do you know who could ride an oil well?” he asks.

Galco’s had a long life as an Italian grocery, one that started to wane with other independent groceries around 15 years ago.

“I can tell you what happened here in California,” Nese says. Larger chains started buying up distribution chains outright and putting the squeeze on Galco’s and other markets. “The independents were capped on supermarket pricing and they could never compete more than any other independent.”

How a Beloved Los Angeles Soda Shop Stood Up to Pepsi 3For soda, Nese says, “when they re-opened the distribution network, the cost per case was 15 dollars more. So all of a sudden, the prices in the supermarkets soared, but there was no cap. There was nothing to judge what was expensive.”

The result?

“We couldn’t compete. It was cheaper for me to go to a supermarket and buy one can off the shelves than it was to get a case delivered here,” he reveals. “The manufacturers would call, and want to sell us all this stuff, and I just couldn’t afford to buy it. So we were sitting around, and then this Pepsi-Cola rep walks in one day. He says, ‘I’m going to give you the best buy you’re ever gonna get on a pallet of Pepsi cans. I’m only gonna charge you $5.59 a case.’ Remember, this was 15 years ago. I asked him how much profit I could make on a pallet like that. He said 30 dollars. I told him thanks, but no thanks—I’ll point my customers down the street to where they can buy Pepsi at the supermarket for cheap.”

The salesman didn’t take kindly to this. He came back with Pepsi higher ups, who cased the store. They never said a word, but their actions spoke volumes to Nese. He’d have to play by their rules, even if that meant he’d go out of business. If Nese had agreed to their prices, he knew that they would just force them upon other independent businesses.

“Nuts to that,” he says. “It took me two weeks to figure it out. A light bulb went off. You know, John, you should be happy you own your shelf space, and Pepsi doesn’t, and you can sell anything you want. So I went out and found 25 brands of little sodas.”

It was a risk, betting on unknown and older brands. But curiosity got the better of customers: What was in those glass bottles? What did cane sugar taste like? Soon, the biggest problem turned out to be that people felt overwhelmed with options.

“There’s so much choice,” Nese says. “It’s not that you’re overwhelmed, you’re just not used to having a choice for yourself. Coke and Pepsi buy all the shelf space. You can only buy what they want to sell you, so you’re bought and paid for. For me, it’s personally aggravating. And that’s why we have Freedom of Choice,” he says, alluding to the painted sign hanging above us.

Nese fell into soda accidentally. He didn’t even drink them as a child. But the freedom he has found in the wake of a bullying from Pepsi has sprung into a philosophy that defines his entire business.

“Once upon a time, there were 3,500 soda manufacturers in the United States,” he says, talking about mint soda, cucumber soda, and sodas with the flavor of rose petals. “Have you ever noticed that Coke and Pepsi don’t create anything? They buy little guys and shrink their lines from 25 sodas to two. If it doesn’t sell a million cases, forget it.”

On the off chance a customer can’t find a soda of their choosing, Galco’s provides them the opportunity to make their own. Rows of cane sugar syrups line the back wall, along with bottles and caps and a dispenser of carbonated water.

“Whatever you can think of, you can make!” Nese says.

He warns that this is not a happy-go-lucky enterprise.

“You have to live with your mistakes,” he says. “I had a kid come in last week and make a soda. He comes up to me and says, ‘I don’t like it. Can I dump it out?’ I say, ‘Yeah! As long as you pay for it.’ I asked him what type of soda he was trying to make, and he said he didn’t know, he was just pumping syrups in at random. ‘Next time,’ I said, ‘put some thought into it and it’ll be really good.’”

So very carefully, I go with two flavors: green apple and marshmallow. I can say without hesitation that it was the best damn soda I’ve ever had in my life.

Photo credit: Salvador Ochoa

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