KFC Drops Pepsi for Coke After Nearly 40 Years, and Analysts Put $500M in Annual Sales at Stake
KFC will switch from Pepsi to Coca-Cola in US restaurants, starting in January 2027. Bank of America analysts estimate this move could impact $500M in annual sales for Pepsi's North American beverage business, about 3% of its concentrate sales. Coca-Cola aims to expand its reach and brand visibility through this partnership, which KFC says is part of a menu refresh effort.
How this was made
The 30-second read
Why it matters
The switch represents a $500 million annual sales opportunity for Coca‑Cola and a comparable loss for PepsiCo, affecting their North American beverage segments.
Market read
The contract shift could re‑balance sales and market share in the U.S. soft‑drink market, influencing both PepsiCo and Coca‑Cola stock valuations.
What to watch
Potential cost efficiencies for Coca‑Cola and the ability of PepsiCo to replace the lost volume elsewhere.
Background
KFC will replace Pepsi with Coca‑Cola across its U.S. restaurants starting January 2027, ending a 40‑year partnership.
Ticker impact
PepsiCo stands to lose an estimated $500 million in annual sales from KFC’s US beverage contract.
likely downward pressure as the market prices in the $500M sales loss
Analysts estimate the KFC account represents about 3% of Pepsi Beverages North America's concentrate sales.
Coca‑Cola could gain roughly 2.5 % of its North American sales from taking over KFC’s US beverage supply.
potential upside as investors price in incremental sales from the KFC contract
Bank of America analysts estimate the deal could lift Coca‑Cola’s North American sales by about 2.5%.
Market effects
Beverage sector may see a shift in market share between PepsiCo and Coca‑Cola.
U.S. restaurant‑beverage market dynamics could adjust as KFC transitions suppliers.
The contract highlights competitive dynamics in the global soft‑drink industry.
Counterpoint
The impact may be overstated if KFC’s volume is modest relative to overall company sales.
Key entities
- CompanyPepsiCo
Current beverage supplier to KFC in the U.S., stands to lose the contract.
- CompanyCoca‑Cola Company
New beverage supplier to KFC in the U.S., could gain sales from the contract.
- BrandKFC
Fast‑food chain owned by Yum Brands, changing its U.S. beverage partner.
