KFC U.S. Switches Beverage Supplier from PepsiCo to Coca-Cola
KFC U.S. will replace PepsiCo with The Coca-Cola Company as its exclusive beverage supplier across 3,718 restaurants starting in January 2027.
Approximately 3,718 KFC U.S. restaurants will switch their beverage supplier from PepsiCo to The Coca-Cola Company starting in January 2027. The transition is expected to be complete by the spring of 2027, ending a relationship of nearly 40 years that began when PepsiCo acquired the chain in 1986.
Executives described the move as a critical component of the "Kentucky Fried Comeback," a strategy to revitalize the brand and regain customers lost to competitors like Chick-fil-A and Popeyes. The shift follows pressure from activist investor Elliott Investment Management and coincides with diverging fortunes for the beverage giants; Coca-Cola has seen strong volume growth, while PepsiCo has struggled with declining North American drink volumes.
As part of the brand evolution, the chain is expanding its beverage platform to include boba, shakes, and iced coffee, which are currently being tested at the Open House innovation restaurant in Texas. While PepsiCo loses the U.S. KFC account, it retains agreements for KFC's international operations and Taco Bell.
Financial analysts at TD Cowen estimate the deal could generate between $375 million and $560 million in sales for Coca-Cola, providing a 10-20 basis point benefit to the company's total revenue in 2027.
