KFC Swaps Pepsi for Coca-Cola in Major U.S. Beverage Supplier Shakeup
Fast-food giant KFC is replacing PepsiCo with Coca-Cola as its U.S. beverage supplier after 40 years, aiming to revitalize sales and attract customers back from competitors.
In a major industry shift, fast-food giant KFC is replacing PepsiCo with Coca-Cola as its exclusive beverage supplier in the United States, ending a partnership that lasted for roughly 40 years. According to a CNBC report, the transition is set to take effect next year.
End of an Era and Strategic Relaunch
While some international KFC markets already serve Coca-Cola products, U.S. restaurants had stuck with PepsiCo beverages since PepsiCo acquired KFC back in 1986. Until then, KFC had been Coca-Cola's second-largest fountain drink customer globally, trailing only McDonald's. Although PepsiCo later spun off KFC alongside Pizza Hut and Taco Bell into Yum! Brands, the fried chicken chain continued serving Pepsi products. This beverage overhaul comes as KFC seeks to win back American customers who have increasingly gravitated toward competitors like Chick-fil-A and Popeyes.
"The decision is a crucial step in our journey to return KFC to a growth trajectory," wrote U.S. President Catherine Tan-Gillespie in a memo to franchisees and employees. "Offering new beverages in partnership with a new partner, Coca-Cola, will allow us to innovate, adapt to changing tastes, and give customers more reasons to choose us."
Market Dynamics and Timelines
Beverage partnerships have become a critical tool for fast-food chains looking to drive traffic and boost sales. Numerous chains, including McDonald's and Taco Bell, have expanded their beverage menus to feature fruit drinks, sodas infused with flavored syrups, cream, and specialty milks. KFC recently rolled out a new line of beverages, including coffee and milkshakes, at its Innovation Restaurant, Open House, in Texas.
Tan-Gillespie noted that the company expects to complete the transition to Coca-Cola beverages across all U.S. restaurants by the end of the first quarter of 2027. She added that PepsiCo remains an important partner for KFC's parent company. While switching beverage suppliers is uncommon among major restaurant chains, it is not unprecedented. In 2024, PepsiCo famously secured sandwich giant Subway, which had previously worked exclusively with Coca-Cola.
