KFC Switches to Coca Cola in the US 2027, Ending Pepsi Deal

KFC Switches to Coca Cola in the US 2027 after nearly four decades with PepsiCo. KFC announced the new U.S. beverage partnership on October 15. The transition begins in January 2027. Coca Cola products are expected across U.S. restaurants by spring. The companies have not released financial terms.

KFC Switches to Coca Cola in the US 2027: What Changes

The move ends a relationship that dates to PepsiCo's acquisition of KFC in 1986. PepsiCo spun off its restaurant business in 1997. It kept supplying drinks to KFC under Yum Brands. Reuters put the chain's U.S. footprint at 3,718 restaurants.

Bank of America analysts estimate the account at about $500 million in annual sales. That is an analyst estimate, not a disclosed price. It equals roughly 3 percent of Pepsi Beverages North America concentrate sales. The rollout is still ahead, so not every restaurant has changed drinks yet.

PepsiCo Restaurant Partnerships Remain in Place

The change does not end every link between the two companies. A PepsiCo spokesperson told Reuters that agreements covering KFC International and Taco Bell were just renewed. The Taco Bell deal runs for 10 years. KFC restaurants outside the United States are not part of this switch.

Jefferies analysts focused on brand exposure and public perception. They asked whether the loss could invite competition for other long standing accounts. That was a view on risk, not proof that other chains plan to switch.

KFC US Restaurant Strategy and Sales Trends

The deal follows a broader effort to refresh KFC. Yum described a strategy launched June 15 built around boneless chicken, beverages, sauces and a new identity. The company wants core elements running across KFC's top 20 markets by the end of 2027.

Results showed mixed trends. KFC worldwide system sales grew 6 percent excluding currency effects in the quarter ended June 30. Same store sales rose 2 percent. Restaurant numbers grew 7 percent. U.S. system sales fell 2 percent in the same period.

KFC Open House in McKinney Texas Tests Drinks

KFC also opened a test restaurant called Open House in McKinney, Texas, on September 26. The menu includes lemonades, boba refreshers and shakes. It also offers brewed coffee and iced lattes. The concept pairs table service with self order kiosks and a mobile pickup lane. KFC did not say every U.S. restaurant will adopt this format.

PepsiCo and Coca Cola Results Before the Switch

PepsiCo reported revenue of $25.274 billion for the 12 weeks ended September 5. That was up 5.6 percent. North American beverage volume fell 2 percent excluding acquisitions and divestitures. CEO Ramon Laguarta said the company is focused on improving North American performance.

Coca Cola reported worldwide revenue up 7 percent to $13.4 billion in its second quarter. North America unit case volume rose 3 percent. Neither company's results include sales from the KFC change, which has not started yet.

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