KFC Dumps Pepsi for Coca-Cola at 3,700 US Restaurants, Ending Nearly 40-Year Soda Partnership in 2027
KFC will replace Pepsi with Coca-Cola products at its 3,700 U.S. restaurants starting in January 2027, ending a nearly 40-year partnership. The switch is part of KFC's broader modernization effort, according to KFC U.S. President Catherine Tan-Gillespie. Coca-Cola aims to enhance customer experience and drive growth, while PepsiCo will retain its international beverage partnership with KFC.
How this was made
The 30-second read
Why it matters
The deal reshapes the competitive balance in the U.S. fountain‑drink market, potentially affecting sales, margins, and brand exposure for both beverage giants.
Market read
The partnership shift is a notable corporate action for two of the world’s largest soft‑drink makers, with potential stock impact and sector‑wide implications.
What to watch
PepsiCo retains international KFC partnership and other restaurant accounts; Coca‑Cola may face integration costs.
Background
KFC, owned by Yum! Brands, is ending its long‑standing U.S. soda partnership with PepsiCo and will switch to Coca‑Cola products starting in 2027.
Ticker impact
PepsiCo loses its 40-year exclusive beverage partnership with KFC in the U.S., removing a major fast‑food channel.
likely pressure as the market prices in lost sales from KFC contract
The contract represented a sizable, long‑standing outlet; its loss is material for PepsiCo's beverage segment.
Coca‑Cola secures a new exclusive fountain partnership with KFC across roughly 3,700 U.S. locations starting 2027.
likely upside as investors price in incremental volume from KFC locations
KFC is a major quick‑service chain; the new partnership expands Coca‑Cola's distribution footprint.
Market effects
Beverage sector sees a shift in market share between the two largest soft‑drink makers.
U.S. fast‑food beverage landscape changes, affecting domestic sales volumes.
Highlights competitive dynamics between Coca‑Cola and PepsiCo worldwide.
Counterpoint
The contract may be less material than perceived if KFC's overall beverage spend is modest relative to each company's total revenue.
Key entities
- companyKFC
Fast‑food chain owned by Yum! Brands, subject of the partnership change.
- companyPepsiCo
Current U.S. beverage partner of KFC, losing the contract.
- companyCoca‑Cola
New U.S. beverage partner for KFC.
