KFC picks Coca-Cola as US soda supplier, ditches longtime partner PepsiCo

Business Recorder reported that Coca-Cola will be the beverage partner for KFC's US stores, ending a relationship with PepsiCo of roughly four decades. The fast-food chain signed the deal on Thursday, and Coca-Cola products are due at its 3,718 US locations by spring 2027. The Wall Street Journal first broke the news, drawing on sources familiar with the situation.

Losing KFC may set back PepsiCo's effort to revive soda sales in the US, while its snacks arm faces high prices and demand for healthier products. Its CEO Ramon Laguarta said earlier this month that the company needed more time than planned to restore growth and margins. Activist investor Elliott Investment Management, which disclosed a stake last year, has pressed PepsiCo to sell underperforming assets and strengthen North American results.

PepsiCo said it recently renewed agreements with Yum Brands covering Taco Bell and KFC International stores, and the Taco Bell pact runs for 10 years. Financial details of the Coca-Cola partnership have not been made public. Jay Woods of Freedom Capital Markets called it a bad look for PepsiCo, adding that his firm holds Coca-Cola shares.