KFC switches to Coca-Cola, ending decades-long PepsiCo partnership
The agreement, announced
on October 15, will bring Coca-Cola products to KFC’s 3,718 US locations by
spring 2027. The companies did not disclose the financial terms of the deal.
The move comes at a
challenging time for PepsiCo, which is seeking to revive soda sales in the US
while addressing pressure on its snack business from higher prices and changing
consumer preferences.
PepsiCo CEO Ramon
Laguarta recently acknowledged that efforts to improve growth and profit
margins were taking longer than expected. The company is also facing pressure
from activist investor Elliott Investment Management, which has called for the
sale of underperforming assets and better performance in North America.
KFC’s relationship with
PepsiCo began when the beverage company acquired the fast-food chain to expand
its presence in food and snacks. Although KFC was spun off in 1997, PepsiCo
remained its beverage partner under parent company Yum Brands.
Despite losing the US KFC
business, PepsiCo will retain agreements covering Taco Bell and KFC restaurants
internationally. It also supplies beverages to Subway and Jersey Mike’s Subs.
Coca-Cola already
partners with major restaurant chains, including McDonald’s and Wendy’s,
strengthening its position in the US foodservice market.
