PepsiCo and Taco Bell have extended their longstanding partnership through the year 2036, according to an announcement made by PepsiCo. This renewal comes shortly after Taco Bell’s sister company, KFC, revealed it will switch its U.S. beverage provider to Coca-Cola. Such shifts in partnerships between major food chains and beverage suppliers are rare but not unheard of, as these companies often compete to secure exclusive supply deals through various incentives.

KFC's move to Coca-Cola breaks from its longstanding relationship with Pepsi, highlighting Coca-Cola’s recent strengthening position in the soda market. This shift was described as more symbolic of the competitive landscape between the two beverage giants, rather than a widespread industry trend. Despite losing KFC’s U.S. business, PepsiCo remains a crucial partner for Yum Brands, which owns both Taco Bell and KFC, particularly beyond the U.S. market.

PepsiCo’s historical ties with Yum Brands date back to when Pepsi owned the restaurant chains before spinning them off as a separate company in 1997. Taco Bell has leveraged its connection to Pepsi by offering exclusive menu items like the Mountain Dew Baja Blast and Doritos Locos Tacos that incorporate Pepsi products, helping to maintain a unique brand experience for customers. The refreshed contract ensures these Pepsi products will continue to be available at Taco Bell outlets internationally.

The partnership will also extend Pepsi’s beverage presence at Taco Bell’s locations outside the United States, including markets such as Canada, the United Kingdom, Ireland, and Thailand. Despite KFC’s recent change in U.S. supplier, PepsiCo continues to play a prominent role for Yum Brands globally. This renewal underscores Pepsi’s ongoing importance in the fast food industry’s beverage supply landscape amid stiff competition with Coca-Cola.