KFC to switch to Coca-Cola beverages in U.S. restaurants for the first time in decades
Quick Look
- KFC's U.S. restaurants will switch from PepsiCo to Coca-Cola beverages by the end of Q1 2027, ending a decades-long partnership dating back to 1986.
- The move, announced by KFC U.S.
- President Catherine Tan-Gillespie, aims to win back customers lost to rivals like Chick-fil-A and Popeyes by innovating drink offerings.
AI-generated summary
Why It Matters
KFC's U.S. restaurants have served PepsiCo beverages since 1986, when Pepsi acquired the chain. Although Pepsi later spun off KFC into Yum Brands, the beverage partnership continued. The change reflects KFC's effort to compete with rivals like Chick-fil-A and Popeyes by refreshing its offerings.
KFC's U.S. restaurants will ditch PepsiCo and switch to Coca-Cola beverages next year, marking the first time in decades that the Yum Brands chain has changed its drink supplier, the restaurant company said Thursday.
Some of KFC's international markets serve Coke products, but the chain's U.S. restaurants have stuck with PepsiCo drinks ever since Pepsi bought KFC in 1986. Pepsi later spun off KFC, along with sister chains Pizza Hut and Taco Bell — but even as the combined Yum Brands, the company stayed loyal to its previous owner.
The change comes as KFC aims to win back U.S. diners, who have ditched the fried chicken chain for rivals like Chick-fil-A or Popeyes.
"This decision is a critical step in the Kentucky Fried Comeback," KFC U.S. President Catherine 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."
For many fast-food chains, beverages have become a critical way to attract consumers. A number of restaurants, like McDonald's and Taco Bell, have broadened their drink offerings with options like refreshers or "dirty soda." Coke told CNBC earlier this year that the company has helped many of its restaurant partners create new drinks.
KFC expects to be pouring Coke beverages in all of its U.S. restaurants by the end of the first quarter of 2027, Tan-Gillespie said.
Tan-Gillespie also said that Pepsi remains an important partner for KFC's parent company and the chain's international markets.
For decades, Coke and Pepsi have tussled over important restaurant partners, which represent both a sales opportunity and the chance to grow the visibility of their beverage brands.
It is unusual for large restaurant chains to switch beverage providers, but not unprecedented. In 2024, Pepsi poached Subway, the largest U.S. restaurant chain by number of locations, from Coke.
What to Watch
AI outlook — possibilities, not facts
KFC will introduce new Coca-Cola-based beverage innovations in its U.S. restaurants by mid-2027
Likely · Within months
PepsiCo will seek to compensate for the lost KFC U.S. contract by pursuing other restaurant chain partnerships
Possible · Within months
Open Questions
- What specific Coca-Cola products will KFC offer in its U.S. restaurants?
- Will the beverage switch affect pricing or menu structure at KFC U.S. locations?
- How will franchisees respond to the operational changes required for the supplier transition?
