KFC U.S. switches beverage partnership to Coca-Cola
Yum! Brands Inc., the parent company of KFC, is reportedly close to finalizing a deal to switch its beverage provider from PepsiCo to Coca-Cola in the United States, according to The Wall Street Journal. The agreement, expected to be announced soon, would see Coca-Cola products taking over KFC's U.S. network from January. This move marks a significant setback for PepsiCo, which has maintained a long-standing supply agreement with Yum!
Brands since the restaurant division spun off in 1997. With KFC operating 3,718 U.S. restaurants, the loss of fountain pouring rights would represent a major setback for PepsiCo, impacting its core food service partner in the quick-service industry. The news sent a swift reaction through Wall Street, with Yum! Brands' shares up by 2.7% and Coca-Cola's up by 0.2%, while PepsiCo's stock dropped by 0.7% as investors assessed the potential loss of a key food service partner.
For Coca-Cola, securing the fountain rights at KFC would bolster its position in the domestic foodservice sector, directly challenging its main competitor.
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