Companies
Coca-Cola jumps after winning KFC's U.S. drinks deal
Coca-Cola shares jumped 2.1% to a 52-week high after KFC chose the company as its U.S. drinks supplier, ending a decades-long partnership with PepsiCo.
Quick Read
- Coca-Cola stock rose 2.1% to $93.90, a 52-week high, after KFC named it the chain's U.S. beverage partner.
- The switch away from PepsiCo begins in January 2027 and covers U.S. restaurants only.
- PepsiCo, which recently lowered its fiscal 2026 earnings outlook, loses a long-standing customer but has renewed deals with Taco Bell and KFC's international locations.
What happened to Coca-Cola's shares?
Coca-Cola (NYSE: KO) shares jumped 2.1% on Friday to close at $93.90. That is the stock's 52-week high, the highest price in the past year. The shares had ended the previous session at $92.00.
Why it matters: PepsiCo (Nasdaq: PEP) shares also rose 2.4%, closing at $131.49. Both stocks gained while the broader market fell. The S&P 500 slid 1.1%. A fund tracking consumer staples, the makers of everyday goods such as food and drinks, rose 1.1%.
What did KFC announce?
KFC, owned by Yum! Brands (NYSE: YUM), named Coca-Cola its new U.S. beverage partner. The agreement covers every KFC restaurant in the U.S. It ends a relationship with PepsiCo that goes back decades.
KFC said the switch begins in January 2027. KFC expects Coca-Cola drinks at all U.S. locations by that spring. KFC restaurants outside the U.S. will continue to serve PepsiCo drinks.
KFC tied the change to its turnaround plan, which it calls the Kentucky Fried Comeback. The chain wants to win back customers from rivals such as Chick-fil-A and Popeyes. KFC U.S. President Catherine Tan-Gillespie said the partnership opens room for new drinks and better restaurant operations.
Why does the loss matter for PepsiCo?
PepsiCo once owned KFC and spun it off in 1997. It stayed a key drinks supplier to Yum Brands after that.
The loss comes at a weak moment. PepsiCo's North American soda business trails the wider category. The company recently lowered its fiscal 2026 earnings outlook as profit margins in North America stayed under pressure. Activist investor Elliott Investment Management is also pressing PepsiCo to shed weaker assets.
Jay Woods, chief market strategist at Freedom Capital Markets, said losing a customer as visible as KFC could further hurt PepsiCo's image. PepsiCo shares remain 22.9% below their 52-week high of $170.49.
What could offset the setback, and what comes next?
What’s next: PepsiCo has renewed drinks deals with Taco Bell and with KFC's international restaurants, according to reports. In 2024 it also won a long-term deal with Subway, replacing Coca-Cola at the chain's U.S. locations.
The next scheduled checkpoint is Coca-Cola's quarterly report on Oct. 27. That report may not reflect the KFC deal, because the switch has not started yet.
For readers
What it could mean for you: The deal reaches people who own Coca-Cola or PepsiCo shares directly. A single stock carries company news in full, with no other holdings to soften it. For Coca-Cola, the contract adds a high-profile restaurant customer from January 2027. For PepsiCo, it removes one. The company is already cutting costs and facing pressure from an activist investor. Any effect on either company's sales may not show up until the switch is complete, and later results could show how much the change matters.
Questions and answers
Is KFC dropping Pepsi?
In the U.S., yes. KFC named Coca-Cola its new U.S. beverage partner. KFC restaurants outside the U.S. will continue serving PepsiCo drinks.
When will KFC start serving Coca-Cola?
KFC said the transition begins in January 2027. The chain expects Coca-Cola drinks at all U.S. KFC restaurants by that spring.
Does PepsiCo still supply Taco Bell?
Yes. PepsiCo has renewed its drinks agreement with Taco Bell, according to reports. It also renewed its deal with KFC's international restaurants.
The numbers
| Coca-Cola (KO) price | $93.90 |
|---|---|
| Coca-Cola (KO) change | +2.07% |
| Coca-Cola (KO) 52-week high | $93.90 |
| PepsiCo (PEP) price | $131.49 |
| PepsiCo (PEP) change | +2.42% |
| PepsiCo (PEP) 52-week high | $170.49 |
| S&P 500 change | −1.09% |
| 10-year Treasury yield | 5.09% |
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