KFC Dumps Pepsi for Coke After 40 Years, Dealing PepsiCo Another Blow

KFC will pour Coca-Cola products at all 3,600 of its U.S. locations by spring, ending a 40-year run for PepsiCo beverages at the chicken chain. Coca-Cola announced the switch, which starts in January, on its corporate site.

The deal hands Coke another win in the fountain wars — and takes back an account it lost nearly four decades ago.

What did KFC and Coca-Cola say?

"I'm incredibly excited to bring KFC and Coca-Cola together," KFC U.S. president Catherine Tan-Gillespie said in a statement. "These are two of the greatest originals, with deep consumer love and a shared belief that the best brands continue to evolve."

She framed the beverage deal as part of a broader overhaul of the chain. "This partnership is about more than what's in the cup. It is another important step in our work to evolve KFC, strengthen our restaurants and create a more relevant experience for today's customers," Tan-Gillespie said.

Coca-Cola did not disclose financial terms of the agreement.

Why does KFC's history with Pepsi run so deep?

PepsiCo bought KFC in 1986 as part of a push into food that also included Pizza Hut and Taco Bell. The drinks company spun off those restaurant brands into what is now Yum Brands in 1997 — but the fountain contract stayed with Pepsi.

KFC served Coca-Cola before that 1986 sale. When PepsiCo took over, it moved fast. "Most of Kentucky Fried Chicken's outlets serve Coke products from their fountains, but Pepsico will immediately switch the 1,800 company-owned restaurants to its own beverages and will make a big push to get the franchised outlets to switch as well," the New York Times reported at the time.

Now the brand returns to its original supplier. Fast Company has reached out to PepsiCo for comment.

Who else has switched from Pepsi to Coke?

KFC joins a growing list of defections. Over the past couple of years:

• Costco's food court moved to Coca-Cola
• Marriott International signed a strategic beverage agreement with Coca-Cola
• The Indianapolis Motor Speedway dropped PepsiCo for Coca-Cola

The pattern isn't absolute, though. Subway started a 10-year beverage deal with PepsiCo in January 2025 — ending two decades of serving Coca-Cola products at its sandwich shops.

What do the share prices show?

The market has already priced the divergence. Coca-Cola shares (NYSE: KO) are up 31.60% year-to-date, while PepsiCo stock (Nasdaq: PEP) is down 10.55% over the same period — a gap of more than 42 percentage points between the two rivals.

That spread reflects more than fountain contracts, but every lost account compounds the problem. Pouring rights at large chains and venues lock in decades of high-margin syrup volume, and PepsiCo has now ceded KFC, Marriott, Costco's food courts and the Speedway within roughly two years.

PepsiCo still holds Subway for the next decade. Whether it can hold its remaining anchor accounts — or win back lost ones — will shape the next round of the cola war.