KFC said the transition to Coca-Cola products will begin in January 2027, with full availability expected across all U.S. locations by spring of that year.
- KFC U.S. President Catherine Tan-Gillespie described the deal as part of efforts to strengthen restaurants, update the menu, and make the experience more relevant.
- According to WSJ, PepsiCo will still supply many markets for KFC International and also Taco Bell.
- Coca-Cola and PepsiCo remain intense rivals in the global beverage market, with Coca-Cola holding an edge in recent sales performance.
Shares of PepsiCo (PEP) slipped 1% on Thursday after KFC U.S. announced a new exclusive beverage partnership with The Coca-Cola Company, effectively ending its long relationship with PepsiCo in the country.
KFC said the transition to Coca-Cola products will begin in January 2027, with full availability expected across all U.S. locations by spring of that year.
KFC’s Rationale For Fizz Switch
The companies plan to develop food-and-drink pairings, expand beverage choices, and support more customer occasions ranging from family meals to snacks. Coca-Cola’s distribution and innovation capabilities will also help KFC restaurants nationwide.
KFC U.S. President Catherine Tan-Gillespie described the deal as part of efforts to strengthen restaurants, update the menu, and make the experience more relevant. Dagmar Boggs, president of foodservice and on-premise for Coca-Cola in North America, said the first U.S. pairing of the two brands creates opportunities for more refreshing visits and growth.
The announcement fits into KFC’s ongoing “Kentucky Fried Comeback” strategy to evolve its beverage platform and give customers more reasons to visit. The chain has already tested new drinks, including iced coffees, boba, and shakes, at its Open House innovation restaurant in McKinney, Texas. Officials framed the Coca-Cola switch as another step toward matching changing consumer preferences.
PepsiCo Will Continue To Serve Taco Bell, KFC In Locations Outside The US
The new partnership was first reported by The Wall Street Journal. According to the report, PepsiCo will still supply many markets for KFC International and also Taco Bell. Both KFC and Taco Bell are divisions within Yum Brands (YUM).
Coca-Cola and PepsiCo remain intense rivals in the global beverage market, with Coca-Cola holding an edge in recent performance. Coca-Cola has delivered stronger organic revenue and volume growth, higher margins, and consistent share gains in carbonated soft drinks, while PepsiCo has faced slower North American beverage trends.
How Did PEP And KO Retail Traders React?
On Stocktwits, retail sentiment around PEP stock fell from bullish to bearish territory over the past 24 hours, while retail chatter fell from high to low levels.
Meanwhile, sentiment around KO fell from bullish to neutral territory, accompanied by high message volume.
A Stocktwits user expressed disappointment about PepsiCo losing a major restaurant brand.
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Another highlighted that Costco has also officially switched its food court soda fountains to Coca-Cola from Pepsi starting last year.
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While PEP stock has dropped 11% year-to-date, KO has gained 32%.
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