PepsiCo Secures 11-Year Exclusive Taco Bell Beverage Deal Through 2036

Taco Bell extends beverage partnership with PepsiCo

PepsiCo has secured an 11-year exclusive beverage distribution agreement with Taco Bell, keeping the drinks company as the chain’s supplier through 2036. The deal covers the United States, Canada, the United Kingdom, Ireland and Thailand, according to Business Insider Africa. The companies said the renewal was announced on Oct. 22.

Under the agreement, Taco Bell will continue offering PepsiCo-branded beverages, including Mountain Dew Baja Blast. PepsiCo said the arrangement would focus on beverage trends in crafted, functional and energy drinks, including energy offerings aimed at Generation Z consumers.

Contract extends existing food collaboration

PepsiCo and Taco Bell will also continue working on food concepts, including new flavors planned for the Doritos Locos Tacos line, Just-Drinks reported. The published evidence does not provide a purchase price or describe a transaction in which either company paid cash for an asset or share transfer.

KFC’s U.S. switch creates a contrasting outcome

The Taco Bell renewal came shortly after KFC selected Coca-Cola as its main U.S. soda supplier, ending a PepsiCo relationship of about 40 years. An internal KFC memo obtained by CNBC still described Pepsi as an important partner for Yum! Brands and the chain’s international markets, Business Insider Africa reported.

Taco Bell and KFC are both owned by Yum! Brands, which became an independent public company in 1997 after being separated from PepsiCo. The two agreements therefore leave PepsiCo with different outcomes within the same restaurant group: Taco Bell retained PepsiCo through a long-term renewal, while KFC’s U.S. business moved to Coca-Cola.

Taco Bell represented recent growth for Yum! Brands

In Yum! Brands’ latest quarter, which ended in June, Taco Bell’s U.S. same-store sales rose 7%, compared with a 2% increase for KFC, Just-Drinks reported. Those figures describe sales performance at the restaurant chains and do not establish beverage purchasing volumes or revenue under PepsiCo’s contract.

PepsiCo separately faced pressure in its North American beverage business during its third-quarter results. The unit’s core operating margin fell 15 basis points amid volume and channel-mix pressure and higher marketing expenditure, while divisional net revenue rose 5%, mainly because of prior-year acquisitions. Organic revenue declined slightly, and the company reduced its 2026 core earnings-per-share growth forecast to 1% to 2% from the low end of its previous 4% to 6% range. The forecast concerns adjusted core EPS rather than GAAP EPS.

Long-term value and financial terms remain undisclosed

The 11-year term establishes the duration of the supply relationship, but it does not disclose annual revenue, guaranteed purchases, pricing, product volumes or cash proceeds. The reviewed reporting also does not identify a cash payer or cash recipient because no asset or share exchange is described.