KFC drops Pepsi for Coca-Cola in the US, ending 40-year partnership

KFC US will end its 40-year partnership with PepsiCo (PEP) in 2027, switching to Coca-Cola (KO). The change affects 3,718 US locations, with no impact on China. KFC cites innovation as a key factor. PepsiCo retains agreements with other Yum! Brands (YUM) units. Coca-Cola shares rose, while PepsiCo's fell.

KFC (Yum Brands) will end its 40-year partnership with PepsiCo, switching to Coca-Cola for beverages in 4,000 U.S. locations by spring 2027. Coca-Cola has recently won similar contracts with Costco and Marriott. PepsiCo shares fell 0.7%, Coca-Cola rose 0.2%, and Yum Brands gained 2.8% on the news.

KFC (Yum! Brands) will switch its U.S. beverage provider from PepsiCo to Coca-Cola starting January. The change affects 3,718 locations. Yum! Brands shares rose 2.7%, Coca-Cola gained 0.2%, and PepsiCo dropped 0.7% on the news.

Yum Brands (YUM) announced a partnership with Coca-Cola (KO) to become the exclusive beverage provider for KFC U.S. locations starting January 2027. YUM offers a 2.0% dividend yield, a 35% payout ratio, and a 7.6% 3-year dividend growth rate. The stock is trading below its GF Value™ of $169.85, indicating an 11.4% margin of safety. YUM's GF Score™ is 83, reflecting strong business quality and financial health.

KFC U.S. will switch from PepsiCo to Coca-Cola beverages by Q1 2027, aiming to attract diners and innovate offerings. The change marks the first U.S. supplier shift in decades, with KFC citing evolving consumer tastes. Pepsi remains a partner internationally. Coca-Cola has helped other chains expand drink menus.

KFC, a unit of Yum! Brands (YUM), is finalizing a deal to switch its U.S. beverage provider from PepsiCo (PEP) to Coca-Cola (KO) starting January. KFC operates 3,718 U.S. restaurants. YUM shares rose 2.7%, KO up 0.2%, and PEP down 0.7% on the news, according to the Wall Street Journal.