KFC is ending its nearly four-decade partnership with PepsiCo and switching to Coca-Cola as its beverage supplier across its more than 3,700 U.S. restaurants.
The fried chicken chain announced that the transition will begin in January 2027, with Coca-Cola products expected to be available at all U.S. locations by spring. KFC U.S. President Catherine Tan-Gillespie described the partnership as part of the company’s broader effort to modernize its brand and give customers more reasons to visit its restaurants.
“These are two originals, with deep consumer love,” Tan-Gillespie said. “This partnership is about more than what’s in the cup. It is another step in our work to evolve KFC, strengthen our restaurants, menu offerings and create a more relevant experience for today’s customers.”
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The move ends a partnership that began in 1986, when PepsiCo acquired KFC as part of its expansion into the restaurant business. PepsiCo spun off its restaurant operations in 1997, creating Yum! Brands, KFC’s current parent company. Despite the separation, PepsiCo continued supplying beverages to KFC’s U.S. restaurants for nearly four more decades.
Earlier this month, PepsiCo CEO Ramon Laguarta said the company’s efforts to improve sales growth and profit margins were taking longer than expected. Its snacks business has also faced pressure from consumers who have become more sensitive to prices and are reconsidering their spending.
Although PepsiCo will lose KFC’s U.S. business, the company will retain other major restaurant partnerships. Its beverage agreements with Taco Bell in the United States and KFC in international markets will continue. PepsiCo has a 10-year agreement with Taco Bell, according to Reuters. The company also supplies beverages to restaurant chains including Subway and Jersey Mike’s.
Meanwhile, Coca-Cola has secured beverage partnerships with several restaurant chains that previously served PepsiCo products, including Culver’s, Arby’s and Panda Express. The company also has longstanding partnerships with McDonald’s and Wendy’s.
Coca-Cola’s President of Foodservice and On-Premise, North America, Dagmar Boggs, said the partnership would combine KFC’s food offerings with Coca-Cola’s beverage portfolio and innovation capabilities to create new customer experiences and growth opportunities.
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Fast-food chains are increasingly looking to beverages to attract customers amid intense competition. Many have expanded their menus to include iced coffees, shakes, coolers, refreshers and customized drinks sometimes known as “dirty sodas.”
Jay Woods, chief market strategist at Freedom Capital Markets, said losing a major restaurant partner such as KFC could hurt PepsiCo’s image and add to the challenges facing the company.