PepsiCo Inc. has sealed an exclusive agreement to supply beverages to all Subway sandwich outlets, displacing its long-standing rival, Coca-Cola Co.
Under the terms of the newly inked 10-year deal, Subway will exclusively serve PepsiCo’s array of products, including popular choices like Mountain Dew sodas, Tropicana juices, and Gatorade sports drinks, starting with the announcement made on Tuesday.
Coca-Cola’s iconic brands such as Sprite, Fanta, and Diet Coke will gradually vanish from Subway’s beverage offerings, with the phase-out set to commence in January 2025. This transition is expected to span several months across Subway’s vast network of franchisee-operated restaurants.
Acknowledging the end of their long-standing partnership, Coca-Cola stated, “We are committed to serving Subway through the end of this year.” The beverage giant had been supplying drinks to Subway’s US restaurants for nearly two decades, making Subway its largest US fountain by the number of locations, according to Beverage Digest.
Subway, boasting approximately 20,000 establishments in the US and nearly 37,000 worldwide, also announced an extension of its existing agreement with Frito-Lay, PepsiCo’s snack-food division, ensuring the provision of chips and snacks at its outlets through 2030. PepsiCo has been supplying beverages to Subway outlets in various regions outside the US.
This development comes amidst Subway’s ongoing acquisition negotiations with the Atlanta-based private equity firm Roark Capital Group, valued at nearly $10 billion. However, the deal is currently pending approval from the Federal Trade Commission, as reported by Politico.