KFC is ending one of fast food's longest-running beverage partnerships in the US, choosing Coca-Cola over Pepsi after nearly four decades of association with PepsiCo.
The transition is expected to reach all KFC restaurants across the country by spring, giving Coca-Cola another major restaurant chain as it competes with its longtime rival.
KFC says the agreement supports its broader business revival. The company plans to expand its beverage menu, introduce new drink options and create more opportunities to pair food with beverages.
The move could also help the fried chicken chain attract customers at different times of the day, according to Inc. reports.
The decision carries symbolic significance because PepsiCo acquired KFC in 1986. Although PepsiCo separated its restaurant businesses in 1997, creating the company now known as Yum Brands, Pepsi remained KFC's beverage partner for decades.
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For Coca-Cola, the deal adds to a series of recent partnership wins, including agreements involving Costco, Marriott and Culver's. Coke already supplies KFC outlets in several international markets, including Indonesia and Malaysia, making the US transition an expansion of an existing relationship.
The financial stakes extend beyond which soft drink customers order. Restaurant industry consultants say fountain beverages are among fast-food chains' most profitable products because syrup costs relatively little per serving.
Securing an agreement across thousands of locations can therefore offer substantial commercial value.
The change is also a setback for Pepsi, which loses a longstanding customer with strong brand recognition. Coca-Cola, meanwhile, gains a high-profile partnership that once belonged to its chief competitor.
However, the switch may not automatically translate into sustained growth for KFC. Past beverage changes at chains such as Culver's and Panda Express reportedly generated modest increases in customer visits during the initial months, but those gains later faded.
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That makes the agreement part of a larger brand strategy rather than a guaranteed way to boost foot traffic. KFC will need its broader menu and customer experience initiatives to deliver lasting results.
Ultimately, Coca-Cola has secured a major win in the cola rivalry, but the switch's ability to attract more customers to KFC will depend on how diners respond.
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