How Pepsi fell behind in the cola wars—and then lost KFC
PepsiCo secured an 11-year contract renewal with Taco Bell just days after losing its sister restaurant KFC to rival Coca-Cola in the United States. KFC announced it will replace PepsiCo soft drinks with Coca-Cola products across its 3,700 U.S. restaurants starting in January, ending a 40-year partnership that began when PepsiCo owned the fast-food chain. While KFC accounts for a small portion of overall sales, PepsiCo CEO Ramon Laguarta acknowledged that fixing the company's flagship soda brand is now a priority following years of market share erosion.
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- ✓ KFC announced it will begin replacing PepsiCo soft drinks with Coca-Cola products at its 3,700 U.S. restaurants in January.
- ✓ The partnership between KFC and PepsiCo stretches back 40 years to when PepsiCo owned the fast-food chain before spinning it off in 1997.
- ✓ PepsiCo and Taco Bell renewed their partnership for an 11-year term.
What changed
PepsiCo renewed its supply contract with Taco Bell for 11 years shortly after KFC announced its switch to Coca-Cola.
Live updates
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Pepsi Secures Taco Bell While Losing KFC
PepsiCo secured an 11-year contract renewal with Taco Bell just days after losing its sister restaurant KFC to rival Coca-Cola in the United States. KFC announced it will replace PepsiCo soft drinks with Coca-Cola products across its 3,700 U.S. restaurants starting in January, ending a 40-year partnership that began when PepsiCo owned the fast-food chain. While KFC accounts for a small portion of overall sales, PepsiCo CEO Ramon Laguarta acknowledged that fixing the company's flagship soda brand is now a priority following years of market share erosion.
Why it matters
The loss of KFC highlights a decades-long decline in Pepsi's market position compared to its historic rivalry with Coca-Cola. Decades ago, the two cola giants competed closely with market shares separated by only a couple of points, fueled by cultural advertising campaigns featuring pop stars like Michael Jackson and supermodels. Today, fixing the core soda business remains a key strategic challenge for PepsiCo.
What is confirmed
- KFC announced it will begin replacing PepsiCo soft drinks with Coca-Cola products at its 3,700 U.S. restaurants in January.
- The partnership between KFC and PepsiCo stretches back 40 years to when PepsiCo owned the fast-food chain before spinning it off in 1997.
- PepsiCo and Taco Bell renewed their partnership for an 11-year term.
What to watch next
- The official transition of KFC restaurants to Coca-Cola products in January 2027.
- Further strategic announcements from PepsiCo CEO Ramon Laguarta regarding the core soda business.
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- Business Insider Africa — After KFC switches to Coke, PepsiCo secures 11-year Taco Bell deal as Traoré cracks down on a banned German drink in Burkina Faso
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