By Pavlos Christou, Communications & Growth Manager

What KFC’s decision to switch from Pepsi to Coca-Cola in the US reveals about brand positioning, customer experience and the power of strategic partnerships

The relationship between brand perception and commercial partnerships is back in the spotlight. In October 2026, KFC announced that it would end its nearly 40-year beverage partnership with PepsiCo in the United States. Coca-Cola products will begin rolling out across KFC’s approximately 3,600 US restaurants in January 2027, with the transition expected to be complete by spring.

For PepsiCo, the implications extend beyond the immediate commercial impact. The change affects where consumers encounter its products and the experiences they associate with the brand. It also gives Coca-Cola access to a major restaurant network and its customers.

On the surface, this is a commercial decision between multinational companies. From a communications perspective, it raises a broader question: How do strategic partnerships influence the way consumers experience, perceive and ultimately choose a brand?

Brand awareness is only part of the equation

Brand awareness answers a simple question: Do consumers know who you are?

Brand preference asks a more consequential one: When consumers have a choice, why would they choose you?

Advertising can build recognition and shape perceptions. Consumer preferences are also influenced by accessibility, familiarity and repeated product experiences. Strategic partnerships can extend a brand’s presence beyond its own advertising channels and place it in settings where consumers are already making purchasing decisions.

Where, how, and how often consumers encounter a product or service can all shape their perception of a brand.

Why the KFC decision matters beyond sales

The decision needs to be understood in its broader commercial context. KFC has described its new partnership with Coca-Cola as part of its efforts to revitalise its US business, expand its beverage options and enhance the customer experience. The full commercial terms have not been disclosed, and there is no evidence that the decision was driven by shortcomings in Pepsi’s communications or brand positioning.

The change applies only to the United States. PepsiCo remains a beverage partner for KFC internationally, and the companies recently collaborated on KFC x Doritos Loaded, launched across 27 European markets. PepsiCo has also renewed its US partnership with Taco Bell for another 11 years.

These developments show the complexity of strategic partnerships. Agreements of this scale reflect commercial priorities, distribution capabilities, consumer expectations, opportunities for innovation and the organisations’ long-term objectives.

For communications professionals, the lesson is clear: Partnerships can strengthen brand associations, create shared experiences and reinforce market positioning.

When a business decision becomes a communications story

Business decisions rarely exist apart from public perception. The way a company announces a partnership, acquisition, restructuring or change in direction can influence how stakeholders interpret it.

KFC and Coca-Cola presented their agreement as an opportunity for innovation, improved customer experiences and future growth. This framing connects the partnership with KFC’s wider efforts to evolve its offering and strengthen its competitive position.

The announcement may carry different reputational implications for each company. For Coca-Cola, the partnership offers an opportunity to expand its presence and reinforce its position in the US market. For PepsiCo, the loss comes as it works to strengthen its domestic beverage business, while maintaining significant partnerships elsewhere.

A high-profile commercial decision can also shape perceptions of competitive strength, even when its financial significance is limited. The loss of a prominent partnership to a direct competitor may suggest a shift in market momentum, although one announcement cannot tell the full story of either company’s performance.

Communications cannot change the underlying business decision, but they can influence how people understand it.

What the KFC–Coca-Cola deal can teach businesses

Assess what a partnership adds to the customer experience. KFC says the new agreement will support its beverage offer and customer experience. Businesses should ask what a partner will bring to customers, such as greater choice, easier access or product innovation.

Consider the visibility a partnership creates. A restaurant partnership puts a beverage brand in front of customers at the point of purchase. Businesses should weigh that exposure alongside the agreement's commercial value.

Keep the story in proportion. KFC’s decision concerns its US beverage partnership. It does not end PepsiCo’s relationship with KFC internationally or its other restaurant partnerships. When explaining a business change, give audiences enough context to understand its actual scope.