KFC US 'tastes the feeling' as it switches from Pepsi to Coke

Coca-Cola hopes to "open happiness" at KFC U.S. locations as the official new beverage provider of the chicken chains U.S. restaurants. KFC is switching from PepsiCo to Coca-Cola at 3,718 U.S. restaurants, the company announced, beginning in January and ending a 40-year partnership with the beverage provider. PepsiCo will continue supplying KFC International locations and Taco Bell, two growing parts of parent company Yum Brands' portfolio.

The move comes as restaurant chains increasingly rethink beverage menus to attract younger consumers, drive sales and boost profits through specialty drinks. Through its Kwench beverage platform, KFC has recently introduced its own sparkling lemonades, boba refreshers and shakes at select international locations as it works to revive its brand amid declining sales and restaurant closures. It remains unclear whether the shift to Coca-Cola will have an impact on KFC's Kwench beverage program, and if so, what that impact might look like.

In terms of Taco Bell, PepsiCo's partnership with the Mexican-inspired chain has produced major success, including Mountain Dew Baja Blast, a custom-developed drink that has generated billions of dollars in sales, according to an article in the Wall Street Journal. PepsiCo recently renewed its contract with the chain for another 10 years, according to Reuters.

For PepsiCo, losing KFC U.S. adds to recent account losses, including Marriott hotels, an account Pepsi held for 34 years, and Costco's food court, which sold Pepsi products for a decade. Coca-Cola's new partnership with KFC also underscores the intensifying battle between beverage companies for restaurant distribution as chains look beyond traditional soft drinks to fuel growth. Coca-Cola is the beverage provider for Burger King, Dairy Queen, McDonald's and Wendy's. Meanwhile. Pepsi is still served at Subway, Pizza Hut and Taco Bell.