After nearly 40 years, KFC abandons Pepsi for Coca-Cola in the US, but its 1,500-plus African outlets are left out of the deal

American fast-food giant KFC has announced plans to replace PepsiCo beverages with Coca-Cola across its US restaurants, ending a nearly 40-year partnership and becoming the second major company to switch suppliers following Marriott International earlier this year.

KFC announced it will switch from PepsiCo to Coca-Cola beverages in its US restaurants, ending a partnership that began in 1986.

The transition will start in January 2027 and is expected to finish by spring, involving about 3,600 locations across the US.

The new arrangement affects only US KFC outlets, while PepsiCo maintains its supply partnership with KFC internationally, including Africa.

The loss of the KFC US contract poses a significant financial blow to PepsiCo, but analysts believe it remains manageable despite competitive pressures.

Announced on October 15, 2026, the deal covers 3,600 restaurants, with the transition beginning in January 2027 and expected to conclude by spring.

The move marks another development in the rivalry between the two beverage giants, although KFC's African operations remain unaffected.

KFC ends decades-long Pepsi partnership

KFC's relationship with PepsiCo dates back to 1986, when the beverage company acquired the restaurant chain. Although PepsiCo separated its restaurant businesses in 1997, KFC retained Pepsi as its drinks supplier in the United States.

Catherine Tan-Gillespie, president of KFC US, described the switch as part of the company's efforts to modernise its restaurants and strengthen customer engagement.

“I’m incredibly excited to bring KFC and Coca‑Cola together. These are two of the greatest originals, with deep consumer love and a shared belief that the best brands continue to evolve,” she said.

“This partnership is about more than what’s in the cup. It is another important step in our work to evolve KFC, strengthen our restaurants and create a more relevant experience for today’s customers. Coca‑Cola shares our ambition for the future of this brand, and I’m excited about what we can create together.”

Second major company to abandon Pepsi

The announcement follows Marriott International's July 2026 decision to end its 34-year relationship with PepsiCo in favour of a global Coca-Cola agreement.

As previously reported by Business Insider Africa, the deal covers nearly 10,000 hotels worldwide, including properties in Nigeria, South Africa and other African markets.

Under the arrangement, Marriott is introducing Coca-Cola products across guestrooms, restaurants, lounges and event spaces, extending the switch beyond the United States.

According to travel blog View from the Wing, Marriott justified the decision by citing customer preferences, telling its hotels that "The Coca-Cola portfolio is favored by more than 70% of Marriott’s guests."

What the KFC deal means for Africa

Unlike Marriott's global agreement, KFC's latest supplier change applies exclusively to the United States, leaving its extensive African operations unaffected.

According to KFC Africa's inaugural impact report, the company operated 1,573 restaurants across 22 sub-Saharan African countries in 2025, employing more than 40,000 people.

The chain aims to expand to 3,000 outlets by 2035, building on its presence in markets including South Africa, Nigeria, Kenya, Ghana and Uganda.

However, the latest US deal does not affect KFC's African operations, especially as PepsiCo recently renewed its beverage supply arrangements with KFC International, ensuring the partnership continues outside the American market.

PepsiCo faces mounting business challenges

Despite retaining its international partnership with KFC, PepsiCo faces mounting pressure in the US, where the loss of the restaurant chain's beverage contract adds to weakening consumer demand, rising operating costs and sluggish sales growth in North America.

The challenges prompted the company to acknowledge on October 8 that its recovery was taking longer than expected, leading to further cost-cutting measures aimed at improving profitability.

According to Bank of America analysts, losing KFC's US beverage contract could cost PepsiCo $500 million in annual sales, equivalent to about 3% of Pepsi Beverages North America's concentrate sales.

Nevertheless, the two major customer losses differ in scope. While Marriott's switch to Coca-Cola covers its global hotel network, including properties in Africa, KFC's agreement is limited to the US, allowing PepsiCo to maintain its international supply relationship with the fast-food chain.