KFC Ditches PepsiCo For Coca-Cola After Nearly 40 Years
Synopsis
KFC is switching from PepsiCo to Coca-Cola across its US restaurants, marking a major change in the fast-food beverage business.
What Happened
KFC has replaced longtime drink partner PepsiCo with Coca-Cola. The agreement asks for Coca-Cola beverages to be rolled out at KFC’s 3,718 locations across the U.S. by spring 2027. The terms of the deal were not disclosed by either company.
The selected choice might concern PepsiCo, which is previously attempting to make improvements to its soda income in America. The fast-food giant is under pressure as well, from rising prices for the ingredients used to make its snacks and changing consumer preferences, more people are looking for healthier food options. PepsiCo still partners with Taco Bell and KFC’s international eateries, while its remaining beverage partnerships include Subway, Jersey Mike’s Subs.
Why It Matters
Losing major customers like KFC is a big hit for PepsiCo. It already faces pressure from investor Elliott Investment Management both to see better performance in North America and to rethink underperforming businesses.
The deal gives Coca-Cola another significant fast-food partner. The KFC deal would be another major boost for its restaurant business on top of already supplying drinks to McDonald’s and Wendy’s.
The Founder Angle
A long-term business does not guarantee a long-term customer. Companies will again need to prove their value and how they can provide advantage to their customers.
For founders, it is a simple lesson: Never, Never put too many eggs in one big customer witch. Loss of one large customer hurts revenues but there are other customers, established business relationships that mitigate that risk to some degree.
The 60-Second Takeaway
Examine how reliant your business is on its largest customer. That means if one customer is going to get your company in hot water, start establishing rapport with new customers before you have to!
The Inspirepreneur Question
If your business is going to last in the long run, what are you more loyal to; the people or the better opportunities?
Source: Reuters
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
