KFC will replace Pepsi with Coca-Cola at its restaurants across the United States, ending a beverage partnership that has lasted about four decades, according to RT.

The Coca-Cola Company and KFC announced the agreement on October 15. The fast-food chain will begin introducing Coca-Cola products to its US drinks menu in January 2027, with the rollout expected to reach all approximately 3,600 US locations by spring 2027.

Why KFC Is Switching to Coca-Cola

KFC has served Pepsi products at its US restaurants since PepsiCo acquired the chain in 1986. Although PepsiCo spun off KFC in 1997, the restaurant chain and its parent company, Yum Brands, continued their relationship with Pepsi.

KFC US President Catherine Tan-Gillespie said the new partnership would support the brand’s efforts to evolve and offer customers a more relevant experience.

The move comes as KFC faces competition from other major US fast-food chains, including Chick-fil-A and Popeyes.

What the Deal Means for PepsiCo

Bank of America analysts estimate that losing KFC could cost PepsiCo around $500 million in annual sales, Reuters reported. The companies have not disclosed the financial terms of the Coca-Cola agreement.

The change applies only to KFC restaurants in the United States. A PepsiCo spokesperson told Reuters that the company had recently renewed agreements covering Taco Bell and KFC’s international locations.

Coca-Cola and PepsiCo have competed for decades to secure beverage deals with major restaurant chains. Newer brands, including Salaam Cola, are also seeking to challenge established players in the global soft drinks market.

In Pakistan, Coca-Cola has maintained a presence for more than seven decades, becoming a familiar part of the country’s consumer culture.