KFC’s U.S. restaurants will begin replacing PepsiCo beverages with Coca-Cola products in January 2027, with the rollout expected to reach all 3,718 locations by spring. The deal ends a beverage relationship that has lasted roughly four decades. KFC and Coca-Cola have not disclosed the contract’s financial terms.
What KFC announced
KFC U.S. said on October 15, 2026, that its beverage partnership will transition from PepsiCo to The Coca-Cola Company in January 2027. Coca-Cola products are expected to be available across the U.S. chain by spring 2027, although individual restaurants may change over at different times during the rollout.
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KFC President Catherine Tan-Gillespie said the agreement is intended to refresh the chain’s menu and beverage platform. “I’m incredibly excited to bring KFC and Coca-Cola together. These are two originals, with deep consumer love,” she said.
Coca-Cola North America Foodservice President Dagmar Boggs said the companies plan to use Coca-Cola’s wider beverage portfolio and product-development capabilities to create food-and-drink pairings and new customer occasions. Neither company published the value, duration or exclusivity terms of the contract.
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When will KFC stop serving Pepsi?
| Milestone | Timing | What it means |
|---|---|---|
| Partnership transition begins | January 2027 | U.S. KFC restaurants start changing beverage equipment, menus and supply arrangements. |
| Expected nationwide availability | Spring 2027 | Coca-Cola products are expected at all 3,718 U.S. KFC locations, according to Reuters. |
| Current status at announcement | October 15, 2026 | The PepsiCo relationship remains in place until the transition starts; KFC has not announced an earlier systemwide switch. |
The announcement concerns KFC’s U.S. restaurants. It does not establish a change for KFC markets outside the United States, where beverage arrangements can be negotiated separately.
Why the change matters in the soda wars
Fountain contracts give beverage companies more than a logo on a menu. A major restaurant chain provides recurring distribution, prominent in-store visibility and opportunities to match drinks with meals. Losing or winning that placement can influence what millions of customers see and order, even when the contract’s economics are private.
Reuters reports that KFC’s U.S. system has 3,718 locations. That footprint makes the switch a meaningful distribution and branding loss for PepsiCo, but the available information does not support a specific estimate of lost revenue or profit.
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- Crisp, bubbly, and endlessly refreshing, this sparkling soda pop delivers classic cola flavor that's always just right
- Perfect for BBQs, pizza nights, or kicking back with friends, Coke is the fizzy drink that fits every occasion
- A carbonated caffeine drink to enjoy chilled for maximum refreshment
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Coca-Cola is using a broad restaurant network to reinforce its foodservice position. In describing its 2026 “And a Coke” campaign, the company said 13 restaurant partners represented approximately $65.95 billion in combined 2024 sales and that Coca-Cola led the U.S. market across more than 500,000 foodservice locations. Those are Coca-Cola-reported figures and describe the scale of its network, not the value of the KFC agreement.
How Pepsi is responding
PepsiCo has been emphasizing Pepsi Zero Sugar, taste testing and away-from-home distribution as it competes for consumers and restaurant placements.
Pepsi Zero Sugar promotion
In a December 3, 2025 release, PepsiCo said its Pepsi Challenge tour reached 34 U.S. markets, involved more than one million consumers and produced a Pepsi Zero Sugar preference above 60% across the company’s U.S. tour markets. PepsiCo also reported 30.8% year-to-date sales growth for Pepsi Zero Sugar in 2025 and said the product had reached more than one million additional households. These figures are company-reported and are not an independent market measurement.
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Pepsi marketing executive Gustavo Reyna said consumers had told the company “loud and clear” that Pepsi Zero Sugar was the best-tasting zero-sugar cola. PepsiCo’s second-quarter 2025 prepared remarks also said its Pepsi trademark gained carbonated-soft-drink and cola market share, while Pepsi Zero Sugar posted strong double-digit volume and net-revenue growth.
More restaurant distribution
PepsiCo’s prepared remarks pointed to expanded distribution through Subway’s more than 20,000 North American locations. That agreement gives Pepsi a substantial away-from-home channel even as KFC moves to Coca-Cola.
Freedom Capital Markets chief market strategist Jay Woods described the KFC loss as “a bad look for PepsiCo” and a potentially important optical setback. His comment addresses investor perception; it does not quantify the financial effect.
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Coca-Cola versus Pepsi: what this deal changes
| Comparison point | Coca-Cola after the KFC transition | PepsiCo after losing KFC |
|---|---|---|
| Restaurant distribution | Expected access to all 3,718 U.S. KFC restaurants by spring 2027, plus Coca-Cola’s reported network of more than 500,000 U.S. foodservice locations. | Retains other restaurant accounts, including Subway’s more than 20,000 North American locations. |
| Contract timing | Transition starts January 2027; nationwide KFC availability is expected by spring 2027. | The roughly four-decade KFC beverage relationship ends as the transition proceeds. |
| Zero-sugar momentum | KFC’s announcement does not identify a specific Coca-Cola retail or fountain SKU. | PepsiCo reports 30.8% year-to-date 2025 sales growth for Pepsi Zero Sugar and preference above 60% in its 2025 Pepsi Challenge tour markets. |
| Menu pairing and innovation | Coca-Cola says it will develop pairings and new customer occasions using its beverage portfolio and innovation capabilities. | PepsiCo’s cited response centers on taste testing, Pepsi Zero Sugar and expanded distribution. |
| Financial terms | Not disclosed. | The value of the departing KFC arrangement is not disclosed. |
Why restaurant chains switch beverage contracts
A chain can change suppliers when a new partner offers a better overall fit across equipment support, product range, marketing, distribution, pricing and menu strategy. Fountain beverages are operationally embedded: restaurants need compatible dispensing equipment, syrup logistics, staff procedures, menu boards and promotional plans. A new contract can therefore reshape the customer-facing beverage lineup as well as the supply relationship.
KFC’s public explanation focuses on refreshing its beverage platform and creating new food-and-drink pairings. The announcement does not say that a particular product, price or performance metric triggered the decision, so claims about the negotiation’s private motivations would be speculation.
Is Pepsi losing the soda wars?
KFC is a visible setback for PepsiCo, especially because it removes a large U.S. restaurant account after decades of partnership. However, one contract cannot establish an overall market winner. PepsiCo is reporting gains for its Pepsi trademark and strong growth for Pepsi Zero Sugar, while Coca-Cola is adding KFC to an already extensive foodservice network.
The clearest conclusion is narrower: Coca-Cola gains KFC’s future U.S. fountain exposure, and PepsiCo must offset that visibility through products such as Pepsi Zero Sugar and other restaurant or retail channels. The companies have not released enough information to calculate how much the KFC change will affect either company’s revenue.
Quick Recap
What customers should expect
- KFC’s U.S. transition begins in January 2027.
- Coca-Cola products are expected throughout the U.S. system by spring 2027.
- Exact Coca-Cola beverages, regional availability and restaurant-by-restaurant changeover dates have not been specified.
- The announcement does not confirm a change at KFC restaurants outside the United States.
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