Taco Bell keeps PepsiCo for 11 years as KFC moves to Coca-Cola

Taco Bell has renewed its U.S. beverage partnership with PepsiCo for 11 years, through 2036. The October 22 deal covers participating Taco Bell, Taco Bell Cantina and Live Más Café locations. It came one week after fellow Yum! Brands chain KFC announced a U.S. switch to Coca-Cola beginning in January 2027. KFC is leaving a roughly 40-year U.S. relationship with Pepsi, Nation’s Restaurant News reported.

For Taco Bell operators, the renewal means the named PepsiCo lineup continues at participating restaurants. In the renewal announcement, PepsiCo says the companies have worked together on Taco Bell’s Refresca platform. Separately, Taco Bell plans to put two horchata Refrescas on menus nationwide in December; neither release assigns PepsiCo a role in those specific flavors.

A deal with a product pipeline#

Pepsi, Pepsi Zero Sugar, Mountain Dew, Starry and the Taco Bell exclusives Baja Blast and Baja Midnight will remain in the participating U.S. portfolio, according to the joint announcement. PepsiCo will also continue supplying Taco Bell in Canada, the United Kingdom, Ireland and Thailand. The U.S. announcement does not promise every listed drink at every restaurant.

Baja Blast is the best-known example of their collaboration. They also cite their work on Doritos Locos Tacos. For the next phase, the partners name crafted, functional and energy beverages as development areas, including energy drinks the companies say could appeal to younger customers during morning and afternoon visits. No launch date or restaurant requirements for a future energy drink are specified.

Refrescas offer a closer view of the work already in motion. In a separate October 15 Café update, Taco Bell said its Strawberry Horchata and Vanilla Spiced Horchata Refrescas, along with a new Vanilla Spiced Horchata Freeze, are scheduled to reach national menus for a limited time on December 10. Two of the Café's Refrescas are moving beyond that format; the Freeze is a newly announced national item, not one of the Café's Chiller or Cold Brew drinks.

Taco Bell has set a $5 billion beverage-sales goal for 2030 and uses its Live Más Cafés to try new flavors and formats. On October 15, the company reported 39 Café locations and about 1.3 million drinks sold since the concept launched. The scheduled Refresca launch shows how two Café drinks are planned to reach the broader system; their national sales have yet to be measured.

What operators can tell so far#

The two announcements give owners different levels of rollout detail. Coca-Cola and KFC name a January 2027 start and say Coke products are expected across all 3,600 U.S. KFC restaurants by spring 2027. The Taco Bell-PepsiCo renewal covers participating Taco Bell formats but gives no U.S. store count for the renewed agreement or timetable for future crafted, functional or energy drinks. That leaves Taco Bell owners with product direction and an agreement end year, but no comparable public measure of how broadly new drinks will reach the system. The December 10 menu plan covers three limited-time items; it is not a schedule for the PepsiCo agreement.

The renewal announcement also does not disclose syrup pricing, rebates, equipment contributions or co-marketing support. Its effect on a Taco Bell franchisee's costs remains unknown.