KFC to switch to Coca-Cola beverages in U.S. restaurants for the first time in decades

KFC will end a nearly 40-year relationship with PepsiCo and switch to Coca-Cola beverages across its U.S. restaurants by the end of the first quarter of 2027, the chain announced Thursday.

The move marks the first time since PepsiCo acquired KFC in 1986 that the Yum Brands chain has changed its drink supplier in the U.S. market. At the time of that 1986 acquisition, KFC held Coca-Cola's second-largest fountain account, trailing only McDonald's. PepsiCo later spun off KFC along with Pizza Hut and Taco Bell, but Yum Brands maintained its Pepsi partnership even after operating independently.

KFC U.S. President Catherine Tan-Gillespie described the switch as "a critical step in the Kentucky Fried Comeback" in a memo to franchisees and employees obtained by CNBC. She said the partnership with Coca-Cola would give the chain "a platform to innovate, meet changing tastes and give customers more reasons to choose us."

The decision reflects KFC's effort to win back U.S. customers who have migrated to competitors like Chick-fil-A and Popeyes. Beverages have emerged as a key way for fast-food chains to differentiate themselves. McDonald's, Taco Bell and others have broadened their drink menus with offerings such as refreshers and "dirty sodas." KFC recently tested new drinks including iced coffees and shakes at an innovation restaurant in McKinney, Texas.

One complication for Taco Bell, another Yum Brands chain: the restaurant's Baja Blast, a Mountain Dew product exclusive to the chain, would not exist without the Pepsi partnership. Tan-Gillespie said Pepsi remains an important partner for Yum Brands and KFC's international operations.

The switch represents a rare but not unprecedented move. Beverage giants Coca-Cola and PepsiCo compete intensely for restaurant partnerships, which offer both sales opportunities and brand visibility. In 2024, PepsiCo poached Subway, the largest U.S. restaurant chain by location count, from Coca-Cola. Coke has recently won over several former Pepsi customers including Culver's, Arby's and Panda Express.