KFC Is Replacing Pepsi With Coca-Cola at Nearly 3,700 U.S. Restaurants Starting in January 2027

KFC is replacing Pepsi with Coca-Cola at nearly 3,700 U.S. restaurants, ending a beverage partnership that dates back almost four decades.

The companies announced the deal in a joint statement Thursday. The transition will begin in January 2027, with Coca-Cola products expected to be available at all U.S. locations by spring. Financial terms were not disclosed, Reuters reported.

The relationship started when PepsiCo acquired KFC in 1986. PepsiCo spun off its restaurant businesses in 1997, but kept supplying drinks to KFC under its parent company, Yum Brands, according to Reuters.

“I’m incredibly excited to bring KFC and Coca-Cola together,” KFC U.S. President Catherine Tan-Gillespie said in the announcement. She said the partnership would help modernize the chain and improve its restaurants and menu offerings.

What will be in the cup

KFC has not said which Coca-Cola products will replace its current lineup of Pepsi, Mountain Dew, Starry and Aquafina, along with the chain’s own lemonade and iced tea, according to The Wall Street Journal. Coca-Cola’s portfolio includes Sprite, Fanta and Dasani, but the companies have not committed to a specific list.

KFC said the deal could bring new food-and-drink combinations. The chain has been testing drinks such as iced coffees, boba beverages and shakes at its Open House innovation restaurant in McKinney, Texas, according to its announcement.

Dagmar Boggs, Coca-Cola’s president of foodservice and on-premise in North America, said in the announcement that combining KFC’s food with Coca-Cola’s drinks portfolio could create new customer experiences and growth opportunities.

A bad look for PepsiCo

The loss comes as PepsiCo tries to lift soda sales amid rising costs and shifting consumer tastes, Reuters reported, while facing pressure from activist investor Elliott Investment Management to improve its North American business.

KFC is one of the biggest sellers of Pepsi among U.S. restaurant chains, according to The Wall Street Journal. “It’s just a bad look for PepsiCo … when you lose a big-name brand partner like that,” Jay Woods, chief market strategist at Freedom Capital Markets, told Reuters.

PepsiCo is not out of the Yum system entirely. The company will keep supplying drinks to Taco Bell in the U.S. under a 10-year agreement and to KFC restaurants outside the United States, according to Reuters.

For KFC, the move is part of an effort to revive its U.S. business after years of falling sales and restaurant closures, The Wall Street Journal reported. The chain has been expanding beyond chicken buckets into sandwiches, wings and tenders. Coca-Cola already has longstanding deals with McDonald’s and Wendy’s, Reuters reported, making the KFC win another dent in PepsiCo’s restaurant roster.

Reporting based on coverage by USA Today, Reuters and The Wall Street Journal.