Fast food chain KFC has signed a deal with Coca-Cola Company to sell the brand’s beverages in its US stores, ending a partnership of about 40 years with PepsiCo Inc.
In a statement released on Thursday, starting from January next year, KFC’s US stores will switch to serving Coca-Cola beverages, with a transition period expected to be completed by next spring, when all stores will fully offer Coca-Cola drinks.
However, KFC’s international stores will continue to serve Pepsi beverages.
For PepsiCo, this is clearly bad news. With 3718 stores in the US, KFC has a history of about 40 years of serving Pepsi drinks to customers.
Moreover, KFC is not the only recent partner PepsiCo has lost. In July of this year, Coca-Cola Company announced an agreement with Marriott International Inc. to become the beverage supplier, replacing PepsiCo. Last year, retail giant Costco announced that its food courts would no longer serve Pepsi drinks, but would switch to offering Coca-Cola beverages.
Coca-Cola Company’s partners in the fast food industry also include Burger King, McDonald’s, and Wendy’s.
However, a spokesperson for PepsiCo told Reuters that Yum! Brands Inc., the parent company of KFC, had just renewed an agreement with PepsiCo to continue supplying Pepsi drinks to KFC’s international stores and to Taco Bell, which is under the Yum! Brands umbrella, in a ten-year deal.
Furthermore, PepsiCo has beverage partnership agreements with the sandwich chain Subway and Jersey Mike’s Subs. PepsiCo also provides fountain drinks for Pizza Hut.
On Thursday, PepsiCo’s stock price fell 0.7% in New York trading. Meanwhile, Coca-Cola Company’s stock price rose by 0.2%, and Yum! Brands Inc.’s stock price climbed by 2.8%.
(Reference: Reuters reports)