PepsiCo has renewed its deal to supply drinks to KFC in a clutch of international markets, weeks after losing the fast-food chain’s US business to Coca-Cola.
The agreement retains PepsiCo as KFC’s beverage supplier in Australia, India, the UK, Spain, Germany, France, the Netherlands and Belgium.
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In a statement on Friday (6 November), the drinks giant also pledged support for KFC’s “Gen Z” push through its “portfolio of beverage brands and innovation expertise”.
“As consumer tastes continue to evolve, PepsiCo is moving at the speed of culture, bringing new capabilities and category-leading innovation, to help KFC build a more modern, distinctive, and relevant beverage business around the world,” said Eugene Willemsen, the CEO for PepsiCo’s international beverages business.
The renewal comes as the fried chicken giant swapped PepsiCo for Coca-Cola as its drinks supplier in the US, ending a 40-year-old partnership. The new contract will start next year.
However, sister brand Taco Bell expanded its ties with PepsiCo in October, with a deal that covers the US, Canada, Ireland, Thailand and the UK.
KFC and Taco Bell are both owned by Yum! Brands, which separated from PepsiCo as an independent public company in 1997.
PepsiCo’s North American beverage unit reported a 15-basis-point fall in core operating margin during the third quarter amid “volume and channel mix” pressures and high marketing spend.
Net revenue in the division rose 5%, largely because of acquisitions completed last year.
However, organic revenue declined “slightly” during the quarter, though PepsiCo pointed that “organic volume trends” it said improved sequentially, helped by “functional hydration” products and flavoured fizzy soft drinks.
Nevertheless, faced with margin pressures in its North America business, the Mountain Dew brand owner reduced its 2026 earnings outlook.
It now expects core earnings per share to rise 1% to 2% this year, compared with its earlier forecast at the “low end” of the 4% to 6% range.
