Pepsi Once Owned KFC and Now the Colonel Just Showed It the Door

Pepsi has poured from Kentucky Fried Chicken fountains for nearly forty years.

That partnership is ending at thousands of American KFC restaurants, and the paperwork is already signed.

The Colonel's company is betting its comeback on a move that would have been unthinkable in 1986.

KFC Signs Coca-Cola for Its American Restaurants

KFC announced that Coca-Cola will become its beverage partner across the United States.

The switch begins in January 2027, with Coke expected at every American KFC by spring.

That covers more than 3,600 restaurants.

KFC locations overseas will keep pouring Pepsi, and neither company disclosed the money involved.

KFC U.S. President Catherine Tan-Gillespie tied the move directly to the chain's turnaround push and talked up fresh drink options for customers.

Pepsi Bought the Colonel's Chicken in 1986

Pepsi built its swagger on the Pepsi Challenge taste tests of the 1970s, the ads that rattled Coke into its New Coke blunder.

PepsiCo bought Kentucky Fried Chicken in 1986, while the cola wars were still front-page news.

Coke had just learned the hard way what happens when you mess with an American classic, and it rushed the original formula back to store shelves within three months.

Pepsi owned KFC, Pizza Hut and Taco Bell before spinning the chains off in 1997 into the company that became Yum! Brands.

Even after the split, Pepsi kept the fountain business.

Now one of those three chains is walking out the door in the United States.

Pepsi still holds Taco Bell under a fresh 10-year deal, and it supplies Pizza Hut, which switched from Coke to Pepsi in 2011 and left the Yum family in 2026.

But losing KFC fits an ugly pattern.

Dunkin' dumped Pepsi for Coke in 2012 after a five-year run.

Pepsi did pry Subway away from Coke in 2024 with a 10-year deal, but that win now looks like the exception.

Coke has poured at McDonald's since 1955, holds Wendy's and has added Culver's, Arby's and Panda Express to its roster.

Pepsi's sandwich-shop wins can't hide that the biggest burger and chicken counters in America increasingly belong to Coke.

Ramon Laguarta's Pepsi Keeps Losing Ground

PepsiCo CEO Ramon Laguarta has admitted the company's recovery is dragging on longer than he planned.

Pepsi trimmed its profit forecast for 2026 and announced another round of belt-tightening as North American margins got squeezed.

Its soda sales in North America are growing slower than the soda market as a whole.

Activist investor Elliott Investment Management has taken a stake and is demanding Pepsi unload its weak businesses and get its house in order at home.

This is the same Pepsi that once thought a Kendall Jenner protest ad was a smart way to sell soda – and yanked it within a day after America laughed it off the air.

Losing a customer it once owned outright is the kind of headline Laguarta can't cost-cut his way out of.

The Colonel Started Over At 65 With a Social Security Check

KFC isn't swapping syrup boxes for the fun of it.

Chick-fil-A and Popeyes have been eating the Colonel's lunch.

KFC has nearly 32,000 restaurants worldwide, but almost nine in ten sit outside the United States.

At home, same-store sales slipped 1% in early 2025, and Tan-Gillespie conceded, "The Colonel would not be happy about our market share."

The chain answered with free buckets of chicken for rewards members and a sterner-looking Colonel on its billboards.

It brought back the $7 Fill Up meal and rolled out fried pickles to win diners back.

Customers haven't given up on the brand – the American Customer Satisfaction Index ranked KFC second among chicken chains in 2025, behind only Chick-fil-A.

KFC even moved its U.S. headquarters out of Louisville to Plano, Texas.

Harland Sanders would understand the gamble.

He fed travelers at a service station in Corbin, Kentucky, for years before he ever sold a franchise.

He started franchising his chicken at 65, bankrolled by a $105 Social Security check.

He sold his interest in the company in 1964 for $2 million, and his face still sells every bucket.

Norman Rockwell painted his portrait in 1973, white suit and string tie and all.

That's the original American comeback story, built on 11 herbs and spices and pure stubbornness.

The company he built is now betting its future on the oldest name in American soda.

Pepsi had nearly forty years to hold its seat at the Colonel's table, and Coke took it.

Sources:

• New York Post, "KFC Signs Coca-Cola on as New Beverage Partner, Ditching PepsiCo," New York Post, October 15, 2026.
• Reuters, "KFC Picks Coca-Cola as US Soda Supplier, Ditches Longtime Partner PepsiCo," Reuters, October 15, 2026.
• Aislinn Murphy, "KFC Launches Bold Nationwide Comeback Plan With Free Chicken Buckets for All Customers," Fox Business, July 14, 2025.
• University of Houston Hilton College, "Colonel Harland Sanders," Hospitality Industry Hall of Honor, University of Houston Hilton College.