KFC Ends 40 Years With Pepsi and Switches to Coca Cola

A 40 year pairing comes off the menu

KFC said this week that its US restaurants will switch from PepsiCo products to Coca Cola starting in January, ending a pairing that has lasted about 40 years. Morning Brew frames the move as a real loss for Pepsi in the long running cola wars, and as one piece of a larger comeback attempt by the chicken chain.

The history makes the split sting. Pepsi bought KFC in 1986 and owned the chain for more than a decade, then spun off its restaurant businesses, including Taco Bell and Pizza Hut, in 1997 into the company that later became Yum Brands. Pepsi kept pouring the drinks long after the ownership ended. Now the fountain belongs to the rival.

Why a chicken chain cares this much about soda

KFC US President Catherine Tan Gillespie told employees and franchisees, in a letter obtained by CNBC, that Coke products will help the chain innovate, meet changing tastes, and give customers more reasons to choose KFC. Morning Brew points to younger customers in particular, who want inventive and customizable drinks such as refreshers and dirty sodas.

The need is plain in the rankings. KFC has fallen from first in US sales in 2012 to fifth overall in 2026, according to research firm Technomic. A chain in that position does not change a 40 year supplier for novelty. It changes because every part of the menu has to pull customers back in, including the cup in the drive thru window.

The cola wars scoreboard right now

Morning Brew lays out a tough stretch for Pepsi before this news even landed:

• Coke holds about 44 percent of the US carbonated soda market, compared with about 26 percent for Pepsi, per Circana
• Pepsi stock is down double digits in the past year, and healthier habits plus GLP 1 drugs have hurt its North American salty snack business
• Coke has recently won Culvers, Arbys, Panda Express, Marriott hotels, and the Costco food court away from Pepsi
• Pepsi is not empty handed: it took Subway from Coke last year, and it will keep supplying KFC restaurants in multiple overseas markets

What smaller brands should steal from this story

The lesson is not about soda. It is about auditing the familiar parts of your offer that nobody has questioned in years. KFC treated its drink menu as a growth lever, not a tradition. Independent restaurants, venues, and creators can do the same audit on their own menus, merch tables, booking pages, and content formats.

Ask which parts of your business customers actually choose you for, and which parts are just habit left over from an older version of the brand. Then put your energy, your photos, and your video behind the parts that give people a fresh reason to come back. A comeback rarely starts with a total reinvention. It usually starts with one visible change that tells the market the brand is awake again.