The change ends a loyalty dating to 1986, when Pepsi bought the fried chicken chain. At the time, KFC was Coca-Cola's second-largest fountain account, trailing only McDonald's. Pepsi later spun off KFC along with Pizza Hut and Taco Bell into what became Yum Brands, but the company stayed with its former owner's drinks. The report notes that without Pepsi, Taco Bell would not serve its signature Mountain Dew Baja Blast. Some of KFC's international markets already serve Coke products.
KFC US President Catherine Tan-Gillespie said in a memo to franchisees and employees obtained by CNBC: "This decision is a critical step in the Kentucky Fried Comeback. A new beverage offering, with a new partner in Coca-Cola, gives us a platform to innovate, meet changing tastes and give customers more reasons to choose us."
The switch comes as KFC tries to win back US customers who have drifted to rivals such as Chick-fil-A and Popeyes. Beverages have become a key battleground for fast-food chains, with McDonald's and Taco Bell broadening their drink menus with options like refreshers and "dirty soda". KFC recently unveiled new drinks, including iced coffees and shakes, at its Open House innovation restaurant in Texas. Coke told CNBC earlier this year that it has helped many of its restaurant partners create new drinks.
KFC expects to be pouring Coke beverages in all of its US restaurants by the end of the first quarter of 2027, Tan-Gillespie said. She also said Pepsi remains an important partner for the parent company and for the chain's international markets.
Large restaurant chains rarely switch beverage providers, but it is not unprecedented. In 2024, Pepsi poached Subway, the largest US restaurant chain by number of locations, from Coke. Coca-Cola has in recent years also wooed away Culver's, Arby's and Panda Express. The two beverage giants have tussled over restaurant partners for decades, viewing fountain accounts as both a sales opportunity and a way to grow the visibility of their brands.