KFC Breaks Up With Pepsi After 40 Years, and Coca-Cola Already Has a Toast Ready

After nearly 40 years of pouring PepsiCo into its cups, KFC announced this week that it is switching its U.S. beverage partner to Coca-Cola, starting in January 2027 and rolling out to all of KFC's roughly 3,700 U.S. restaurants by next spring. KFC U.S. President Catherine Tan-Gillespie framed the swap as more than a drink order, telling employees and franchisees the move is meant to "innovate, meet changing tastes, and give customers more reasons to choose us." Coca-Cola's Dagmar Boggs, president of foodservice and on-premise for North America, called it bringing "Coca-Cola and KFC together across the U.S. for the first time."

The timing is not subtle. KFC has slid from the top U.S. chicken chain in 2012 to fifth place in 2026, per research firm Technomic, and the brand's "comeback plan" has already leaned on refreshed marketing, new value deals, and returning menu items to stop the bleeding. Younger customers, KFC says, want the kind of customizable refreshers and dirty sodas that have become Coca-Cola's specialty, and PepsiCo has been losing ground on that front: its stock is down double digits over the past year, GLP-1 drugs have dented its North American snack business, and it now holds about 26% of the U.S. carbonated soda market to Coca-Cola's 44%, per Circana.

This isn't Coca-Cola's first poach, either. It has already pulled Culver's, Arby's, Panda Express, Marriott hotels, and the Costco food court away from Pepsi, though PepsiCo clawed back some ground by signing Subway last year. KFC and Pepsi had been paired since Pepsi bought the chain outright in 1986, before spinning its restaurant businesses off in 1997 into what became Yum! Brands. PepsiCo keeps the overseas business, but in its biggest market, the Colonel just picked a new drinking buddy.

Source: Nation's Restaurant News

Kyle Duford, Founder & Editor, BRNDWIRE. More from Kyle →