A view of a KFC restaurant in Vallejo, California.
Justin Sullivan | Getty Images
KFC's U.S. restaurants will ditch PepsiCo and switch to Coca-Cola beverages next year, marking the first time in decades that the Yum Brands chain has changed its drink supplier, the restaurant company said Thursday.
Some of KFC's international markets serve Coke products, but the chain's U.S. restaurants have stuck with PepsiCo drinks ever since Pepsi bought KFC in 1986. Pepsi later spun off KFC, along with sister chains Pizza Hut and Taco Bell — but even as the combined Yum Brands, the company stayed loyal to its previous owner.
The change comes as KFC aims to win back U.S. diners, who have ditched the fried chicken chain for rivals like Chick-fil-A or Popeyes.
"This decision is a critical step in the Kentucky Fried Comeback," KFC U.S. President Catherine Tan-Gillespie wrote in a memo to franchisees and employees obtained by CNBC. "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."
Beverage cups stacked inside a Yum! Brands Inc. KFC restaurant in Shelbyville, Kentucky, U.S., on Friday, Jan. 29, 2021.
Luke Sharrett | Bloomberg | Getty Images
For many fast-food chains, beverages have become a critical way to attract consumers. A number of restaurants, like McDonald's and Taco Bell, have broadened their drink offerings with options like refreshers or "dirty soda." Coke told CNBC earlier this year that the company has helped many of its restaurant partners create new drinks.
KFC expects to be pouring Coke beverages in all of its U.S. restaurants by the end of the first quarter of 2027, Tan-Gillespie said.
Tan-Gillespie also said that Pepsi remains an important partner for KFC's parent company and the chain's international markets.
For decades, Coke and Pepsi have tussled over important restaurant partners, which represent both a sales opportunity and the chance to grow the visibility of their beverage brands.
It is unusual for large restaurant chains to switch beverage providers, but not unprecedented. In 2024, Pepsi poached Subway, the largest U.S. restaurant chain by number of locations, from Coke.