Joel Libava
Subway®, the popular sandwich chain, has announced a significant change in its beverage product offerings. Namely, they’re switching to Pepsi® products.
In a new 10-year agreement, Subway is switching from Coca-Cola to PepsiCo as its beverage supplier in U.S. restaurants. The change goes into effect on January 1, 2025.
Subway And Pepsi: Who’s The Real Winner?
This move means that customers will have approximately nine months left to enjoy Coca-Cola products alongside their Subway meals.
The partnership with PepsiCo also extends Subway’s agreement with Frito-Lay, a subsidiary of PepsiCo, through 2030, consolidating the snack and beverage portfolio under one supplier.
That means Pepsi wins big, because starting next year, PepsiCo will be adding a new, massive stream of revenue. And that means more profit for the beverage giant.
The Subway/Pepsi Agreement
Under the new agreement, Subway will offer a wide range of PepsiCo beverages, including Pepsi, Pepsi Zero Sugar, Mountain Dew, Starry, Tropicana, Lipton, Aquafina, and Gatorade.
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Additionally, Subway franchisees will also have the option to offer a wider variety of Gatorade flavors.
Subway emphasizes that this switch is part of its commitment to providing a better guest experience and aligning its beverage offerings with restaurant customer preferences.
While Pepsi is already served at various fast-food chains like Taco Bell, KFC, and Buffalo Wild Wings, Subway’s move puts it on the less-populated side of the soda wars.
That’s because some of the other major fast-food chains like McDonald’s, Chick-fil-A, and Burger King currently serve Coca-Cola products. Subway views the partnership with PepsiCo as a milestone in its journey to become the preferred dining destination in America.
As I said, the transition over to Pepsi in U.S. Subway restaurants will begin in 2025 and roll out gradually over several months.
The United States will join other countries such as Canada, Germany, and the Netherlands, where Subway franchises already offer Pepsi products.
Notably, while smaller chains like Skyline Chili and Culver’s have recently made headlines by switching to Coca-Cola from Pepsi, Subway’s decision marks a significant shift in the opposite direction.
And as I wrote, Pepsi is the real winner here.
Go Pepsi!
P.S. I’m a Pepsi guy. Coke is blech.
About the Author
Joel Libava is The Franchise King® — an independent franchise advisor with 25+ years in the industry, two published books on franchising, and his writing has been featured in The New York Times, Forbes, CNBC, Entrepreneur® Magazine and others. In addition, he wrote exclusively for the U.S. Small Business Administration blog for eight years. He doesn't sell franchises. Instead, Joel helps you figure out if franchise ownership is actually right for you — and if it is, teaches you his powerful, proven-to-work franchise research techniques, so you can make a smart, informed decision on a franchise to own and be your own boss.
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