KFC to Switch U.S. Stores' Soda from Pepsi to Coca-Cola After 40 Years

[Financial News]  U.S. chicken franchise KFC is ending its decades-long beverage partnership with PepsiCo and will make a sweeping switch to Coca-Cola products starting next year.  This is the first change in decades to the beverage supplier for KFC's U.S. restaurants, which are part of parent company Yum Brands.
According to CNBC and other international media on the 15th local time, KFC has decided to switch the beverage supplier for all its U.S. restaurants from PepsiCo to Coca-Cola.
Some KFC locations overseas have already served Coca-Cola, but U.S. restaurants have served only Pepsi beverages since Pepsi acquired KFC in 1986. At the time, KFC was Coca-Cola's second-largest customer, after McDonald's. Even after Pepsi spun off KFC, Pizza Hut and Taco Bell, leading to the establishment of Yum Brands, KFC in the United States remained loyal to its former owner, Pepsi.
KFC's decision is part of a strategy to win back U.S. consumers it has lost to chicken fast-food rivals such as Chick-fil-A and Popeyes.
In a memo to franchise owners and employees, KFC U.S. President Katherine Tan-Gillespie said, "This decision is a decisive step toward 'Kentucky Fried Comeback.'" She emphasized, "The new beverage lineup we will introduce with Coca-Cola as our new partner will provide a platform to innovate our menu and appeal to consumers with changing tastes."
KFC plans to complete the installation of Coca-Cola beverage systems at all its U.S. restaurants by the end of the first quarter of 2027.
Beverages have recently emerged as a key draw for customers in the fast-food industry. Major franchises such as McDonald's and Taco Bell are expanding their distinctive beverage menus, and KFC has also unveiled a new lineup, including iced coffee and shakes, at its innovation restaurant in McKinney, Texas.
It is uncommon for a major fast-food chain to change beverage suppliers, but the battle between beverage giants to win partnerships has recently intensified. In 2024, Pepsi won Subway, the U.S. chain with the most locations, away from Coca-Cola. Coca-Cola, meanwhile, has struck back in recent years, signing up major Pepsi customers one after another, including Culver's, Arby's, Panda Express and now KFC.
Tan-Gillespie said, "PepsiCo will remain an important partner for Yum Brands and KFC in international markets," while indicating that partnerships with other brands would continue, including Taco Bell's signature drink, Mountain Dew Baja Blast.
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