Subway Sips A New Partnership: PepsiCo To Quench Thirst Across US Locations In Major Beverage Shift

Author: Shivani Kumaresan | March 19, 2024 11:35am

PepsiCo Inc. (NASDAQ:PEP) has secured a deal to supply beverages at all Subway sandwich shops across the U.S., beginning January 1, 2025.

Under the new 10-year agreement, Subway restaurants will offer an assortment of beverages from the PepsiCo beverages portfolio, such as Pepsi, Pepsi Zero Sugar, MTN DEW, Starry, Tropicana, Lipton, Aquafina, and Gatorade. 

Subway franchisees will also have the option to offer a larger selection of Gatorade beverages.

The move has ousted rival Coca-Cola Company (NYSE:KO) as the primary drink provider, according to a report from Bloomberg.

Coca-Cola brands such as Sprite and Diet Coke will gradually vanish from Subway beginning January 2025, taking months to fully transition across the chain’s franchisee-owned restaurants, the report noted.

“Together, we’re elevating the consumer experience with dynamic beverage and snack offerings — including those that appeal to a broad spectrum of consumers — bringing new flavors to Subway fans in a powerful way,” said Anne Fink, President, PepsiCo Global Foodservice.

PepsiCo is also the current Subway beverage provider in several regions worldwide, including Canada, Germany, the Nordics, and the Netherlands, among others.

Subway, boasting approximately 20,000 U.S. restaurants and nearly 37,000 worldwide, extends its collaboration with PepsiCo’s snack division, Frito-Lay, ensuring snack provision until 2030.

The move brings the brand’s U.S. snack and beverage portfolio together under one supplier.

In August 2023, Subway agreed to be acquired by affiliates of private equity firm Roark Capital. 

Price Action: PEP shares are trading higher by 0.35% at $171.87 on the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image: Shutterstock/ Memories Over Mocha

Posted In: KO PEP