KFC has reached an agreement to serve Coca-Cola beverages at its approximately 4,000 locations across the United States, ending a longstanding partnership with PepsiCo. The transition is set to begin in January, with all U.S. KFC restaurants expected to offer Coca-Cola products by spring. Notably, international KFC outlets will continue to serve PepsiCo beverages.

This shift marks a significant gain for Coca-Cola, reinforcing its position in the U.S. fountain drink market. Coca-Cola already held contracts with major food chains such as Burger King and McDonald’s, and this addition strengthens its presence further. Beverage consultant John Sicher described the deal as "a big win for Coke," noting that Coca-Cola’s fountain business was already considerably larger than PepsiCo’s.

PepsiCo has faced recent challenges beyond this loss, including difficulties revitalizing its salty snacks division and a weakening position in its North America soda segment. In recent months, PepsiCo has lost several key beverage partnerships. In July, Marriott International announced a switch to Coca-Cola as its beverage provider, and last year Costco Wholesale Corp. also moved from PepsiCo to Coca-Cola at its food courts.

Despite these setbacks for PepsiCo, competition between the two companies remains vigorous. Tim Harms, CEO of Enliven, a company that negotiates beverage contracts, emphasized that the "beverage wars are alive and well." He pointed out that PepsiCo regained the Subway contract from Coca-Cola earlier in 2024, demonstrating the ongoing rivalry in securing major food-service deals.

Harms also suggested that KFC’s switch to Coca-Cola may be part of Yum Brands’ broader strategy to rejuvenate the chicken chain’s performance in the U.S. market, using the beverage category as a tool to support that effort.

Market data from Cir-cana indicates that Coca-Cola held approximately 44 percent of the carbonated soft drink market in the United States over the last year, while PepsiCo’s share stood at nearly 26 percent. The KFC transition underscores Coca-Cola’s continued dominance in the sector as the two companies maintain aggressive competition for key partnerships.