- KFC's US restaurants will replace PepsiCo drinks with Coca-Cola products from next year.
- The change ends a relationship dating back to PepsiCo's acquisition of KFC in 1986.
- The switch comes as KFC looks to attract more US diners with a refreshed menu and drinks offering.
KFC is preparing to make a major change to its US menu, but the biggest difference may be in customers' cups rather than on their plates. The fried chicken chain will replace PepsiCo beverages with Coca-Cola products from next year, ending a partnership that has lasted nearly 40 years.
The transition will begin in January 2027, with Coca-Cola drinks expected to be available across all US KFC restaurants by spring. The move marks a significant change for a chain that has served Pepsi products since the drinks company acquired KFC in 1986.
The decision comes as KFC tries to win back American diners amid competition from rivals including Chick-fil-A and Popeyes. The company has been looking at ways to refresh its offering, with beverages becoming an increasingly important part of how fast-food chains attract customers and encourage spending.
"This decision is a critical step in the Kentucky Fried Comeback," KFC US president Catherine Tan-Gillespie said in a memo to franchisees and employees, as reported by CNBC.
She said the new partnership would give the chain more scope to innovate, respond to changing tastes and give customers additional reasons to choose KFC.
A four-decade partnership ends
The KFC-Pepsi relationship began when PepsiCo acquired the restaurant chain in 1986. PepsiCo later spun off KFC, alongside Pizza Hut and Taco Bell, in 1997, but the beverage arrangement continued under Yum Brands, which now owns the three restaurant chains.
The switch applies to KFC's US restaurants. PepsiCo will remain an important partner for Yum Brands internationally, and Taco Bell will continue to serve Pepsi products, including its popular Mountain Dew Baja Blast.
For Coca-Cola, the deal brings another major restaurant brand into its US portfolio. For PepsiCo, losing KFC's US business is a setback in a market where restaurant partnerships help drinks companies secure sales and strengthen brand visibility.
The rivalry between the two beverage groups has shifted over the years. PepsiCo won Subway's US beverage business in 2024, while Coca-Cola has secured other restaurant customers, including Arby's, Culver's and Panda Express.
Drinks become part of the fast-food battle
The KFC deal comes as restaurant chains increasingly look beyond their main dishes to attract customers. McDonald's and Taco Bell have expanded their drinks menus with products such as refreshers and customised beverages, while KFC has been testing iced coffees and shakes at its Open House innovation restaurant in McKinney, Texas.
A broader drinks range could give KFC more options as it works to make its restaurants appealing to customers whose tastes are changing. Coca-Cola's product portfolio may also provide opportunities to develop new beverage offerings, although neither company has disclosed the financial terms of the agreement.
The switch alone is unlikely to determine whether KFC's US comeback succeeds. Food quality, prices, service and the overall restaurant experience will remain important factors in whether diners return.
For customers, the immediate change will be straightforward: Pepsi products will gradually disappear from US KFC outlets as Coca-Cola takes over. For the two drinks companies, however, the agreement represents another shift in a long-running contest for some of America's most recognisable restaurant accounts.
Whether the new partnership helps KFC win back diners will become clearer after the transition begins in 2027.
