PepsiCo Strikes Back After KFC Loss, Locks In Taco Bell Beverage Deal Through 2036

Key takeaways

• PepsiCo’s 11‑year extension with Taco Bell locks in a key revenue stream and counters Coca‑Cola’s recent KFC win, boosting short‑term stock sentiment.
• 11‑year term through 2036
• 3,600 U.S. KFC restaurants affected by Coca‑Cola deal
• PepsiCo shares up 2.65% to $136.18

What happened

PepsiCo (NASDAQ: PEP) extended its U.S. beverage partnership with Yum! Brands (NYSE: YUM) for Taco Bell through 2036, covering 11 years and all Taco Bell, Taco Bell Cantina and Live Más Café locations. The deal includes Pepsi, Pepsi Zero Sugar, Mountain Dew, Starry, and the exclusive Mountain Dew Baja Blast and Baja Midnight, plus new crafted, functional and energy drinks aimed at Gen Z. The extension comes a week after Coca‑Cola (NYSE: KO) won the KFC supply contract, ending PepsiCo’s nearly…

Why it matters

The renewal secures PepsiCo’s presence in a major fast‑food franchise for over a decade, providing steady revenue and brand exposure amid declining North American beverage growth. It also signals PepsiCo’s strategy to focus on high‑margin, younger‑consumer products while countering Coca‑Cola’s recent win at KFC. The…

Short-term and longer-term

Short-term. Over the next few days, watch for short‑term price swings as traders digest the 11‑year extension and the KFC loss.

Longer-term. In the coming months, the Taco Bell partnership will be a key driver of PepsiCo’s North American beverage revenue.