Burger King to end long-standing partnership with Pepsi, Nears Deal with Coca-Cola

In a potentially game-changing move in the fast-food industry, Burger King, India’s second-largest burger chain, is reportedly in advanced negotiations to establish an exclusive beverage partnership with Coca-Cola. This development would mark the end of a nearly 10-year association with rival PepsiCo, according to executives familiar with the situation.

The alignment with Coca-Cola is expected to be formalized and publicly announced by the end of the next quarter, providing a significant shake-up in the beverage preferences offered at Burger King outlets across India.

Burger King has maintained a partnership with PepsiCo since its introduction to the Indian market in 2014. However, with the potential deal’s formalization, both of the top global burger chains operating in India, McDonald’s and Burger King, would be exclusively aligned with Coca-Cola.

One of the key factors driving this potential shift is Coca-Cola’s aggressive push into the “Coke with Meals” platform, with a notable 15% stake in the food delivery platform Thrive, which competes with Swiggy and Zomato. Thrive boasts a network of more than 14,000 restaurants, making it a strategic asset for enhancing the synergy between restaurants and beverage makers.

Burger King’s operations in India are overseen by Restaurant Brands Asia, with private equity firm Everstone Capital holding a direct stake in the venture.

While Burger King’s engagement with PepsiCo has been long-standing, some executives suggest that top-level engagement with the beverage giant may have been somewhat limited, contributing to the decision to explore new partnerships.

Efforts to obtain official comments from spokespersons representing Coca-Cola, PepsiCo, and Everstone-operated Burger King have, as of press time, remained unanswered.

In various global markets, Burger King has aligned itself with Coca-Cola. However, in the Indian market, the fast-food giant has exclusively partnered with PepsiCo since its inception.

The potential agreement with Coca-Cola could provide the beverage giant with immediate access to serve its products at more than 391 Burger King outlets, including its coffee and beverage sub-brand, BK Cafe, across India. The offerings may include a range of soft drinks, including Coca-Cola, Thums Up, and Sprite, as well as Minute Maid juice and Georgia coffee.

Exclusive partnerships with major food service chains like Burger King are essential accounts that can significantly boost sales, especially in out-of-home dining and delivery channels. Coca-Cola’s earlier investment in Thrive, owned by Hashtag Loyalty, demonstrated the company’s strategic focus on expanding its presence and influence in the Indian food and beverage market.

This potential shift in partnerships is expected to be closely watched by industry experts and consumers alike, as it could reshape the fast-food landscape in India and influence beverage preferences for patrons of these popular chains.

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