KFC will replace PepsiCo with Coca-Cola as its beverage supplier for U.S. restaurants starting in January 2027, ending a relationship dating back to 1986.
KFC, a subsidiary of Yum Brands, announced on October 15, 2026, that it will switch its beverage supplier from PepsiCo to Coca-Cola for its U.S. restaurants. The transition is scheduled to begin in January 2027, with Coca-Cola products expected to be available in all U.S. locations by the end of the first quarter of 2027, according to Catherine Tan-Gillespie, President of KFC U.S.
This move marks the first time in decades that KFC’s U.S. restaurants have changed their drink supplier. The chain has served PepsiCo beverages since PepsiCo acquired KFC in 1986. At the time of the acquisition, KFC was Coca-Cola’s second-largest fountain account, trailing only McDonald’s. Although PepsiCo later spun off KFC, Pizza Hut, and Taco Bell into Yum Brands, the restaurant company maintained its loyalty to its former owner for beverage supply in the U.S. market.
While some international KFC markets already serve Coca-Cola products, the U.S. network has remained with PepsiCo. Tan-Gillespie noted that PepsiCo remains an important partner for Yum Brands and will continue to supply beverages to KFC’s international markets.
The switch is part of a broader strategy to attract U.S. diners who have shifted to competitors such as Chick-fil-A and Popeyes. "This decision is a critical step in the Kentucky Fried Comeback," Tan-Gillespie wrote in a memo to franchisees and employees obtained by CNBC. "A new beverage offering, with a new partner in Coca-Cola, gives us a platform to innovate, meet changing tastes and give customers more reasons to choose us."
KFC operates 3,718 U.S. restaurants, according to its website. The company has been testing new beverage options, including iced coffees, boba, and shakes, at its Open House innovation restaurant in McKinney, Texas. Dagmar Boggs, President of Foodservice & On-Premise, North America, at The Coca-Cola Company, stated that the agreement brings the two brands together across the U.S. for the first time.
The beverage industry has seen significant shifts in restaurant partnerships in recent years. In 2024, PepsiCo secured Subway as a customer, while Coca-Cola has gained former PepsiCo partners including Culver’s, Arby’s, and Panda Express.
Following the announcement, Yum Brands shares advanced 2.7%, while Coca-Cola shares edged up 0.2%. PepsiCo shares slid 0.7% as investors assessed the loss of a core food service partner.
The switch represents a significant competitive victory for Coca-Cola in the domestic foodservice segment and a notable loss for PepsiCo, which had held the U.S. fountain rights for KFC for nearly 40 years. For KFC, the partnership aims to modernize its menu and improve customer relevance in a crowded fast-food market. The move highlights the ongoing battle between the two beverage giants for visibility and sales volume through major restaurant chains.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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