How Coke took over Pepsi’s grip on KFC

By the Editorial Team · Tuesday, October 20, 2026

KFC has ended its long-standing partnership with PepsiCo and chosen Coca-Cola to supply beverages at over 3,000 U.S. locations following a competitive evaluation process. This switch not only challenges Pepsi’s presence in fast food but also aligns with KFC’s strategy to modernize its menu and enhance customer appeal through new drink offerings.

KFC has selected Coca-Cola to supply beverages at more than 3,000 of its U.S. restaurants, ending a decades-long partnership with PepsiCo. The decision, confirmed publicly on Thursday, marks a significant shift in the fast-food chain’s beverage strategy.

The change comes as KFC’s 10-year contract with Pepsi nears expiration. To determine its next partner, KFC held a two-day evaluation at Yum Brands’ headquarters in Plano, Texas, where executives and franchisees sampled soft drinks from both Coca-Cola and PepsiCo. Each company presented proposals focusing on how they could help KFC increase drink sales and enhance customer engagement.

While both bids were financially competitive, Coca-Cola distinguished itself by promising stronger future sales growth potential. Pepsi emphasized its longstanding relationship with KFC and outlined plans to innovate with crafted beverages such as iced tea and lemonade. Despite these efforts, KFC ultimately awarded the contract to Coca-Cola.

KFC’s U.S. President, Catherine Tan-Gillespie, described the beverage transition as a key element in the chain’s broader effort to modernize its menu and support franchisee businesses. She highlighted the partnership with Coca-Cola as an opportunity to introduce new offerings that reflect changing consumer tastes and bolster customer appeal.

The logistics of switching from Pepsi to Coca-Cola present a considerable challenge. Pepsi currently owns the thousands of beverage fountains across KFC locations, which will need to be removed and replaced with Coca-Cola equipment. The shift also requires altering the service lines inside kitchens and dining areas, prompting a carefully managed transition over the coming months.

The move has drawn mixed reactions from franchisees. Tabassum Mumtaz, a Texas-based operator with approximately 100 KFC restaurants, called the switch a “bold step” and voiced support for the change.

For Pepsi, losing KFC is a notable setback amid a broader decline in its beverage business. KFC was once part of PepsiCo’s portfolio, and the fast-food chain remains an important customer. The transition may disappoint some consumers accustomed to Pepsi brands like Mountain Dew Sweet Lightning, which has been a popular offering at KFC locations.

Pepsi has not disclosed detailed plans following the loss of KFC but has indicated it will maintain efforts to engage with its customer base.

The beverage provider change reflects ongoing competition among soft drink companies to capture market share within the fast-food industry. Coca-Cola already dominates about 70 percent of U.S. carbonated fountain sales and supplies key KFC competitors, including Wingstop and Popeyes. By securing KFC’s business, Coca-Cola strengthens its footprint in the highly competitive quick-service restaurant segment.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.