Pepsi Wins the Soda Wars, Replacing Coke at Subway Restaurants
Image Credit - Subway
28 March, 2024

Pepsi Wins the Soda Wars, Replacing Coke at Subway Restaurants

In a major beverage switchup, PepsiCo has signed a 10-year deal to become the exclusive drink provider for all Subway sandwich shops in the United States, replacing long-time partner Coca-Cola.

Pepsi products like Mountain Dew soda, Gatorade drinks, Tropicana juices, and Aquafina water will start being offered at Subway's over 20,000 U.S. restaurant locations from January 1st, 2025 onwards. It will take several months to get all the Subway stores switched over.

"The partnership with PepsiCo is an exciting milestone in our journey," said Doug Fry, president of Subway, North America. "It brings a delicious suite of beverage and snack choices to our guests."

Coca-Cola had been Subway's fountain beverage supplier for nearly 20 years after signing a 15-year contract in 2003. A Coca-Cola representative stated, "We are committed to serving Subway through the end of this year."

The sandwich chain cited "guest preferences across demographics" as a driving factor behind the PepsiCo switch, which is expected to "provide additional value to franchisees" with new beverage equipment.

Along with the new Pepsi drink deal, Subway also renewed its agreement with Frito-Lay until 2030. This allows Subway to keep selling Frito-Lay chips like Ruffles and Baked Lays at its restaurants.

The dramatic move comes as Subway was acquired in 2023 by private equity firm Roark Capital Group for nearly $10 billion, pending FTC approval of the massive deal.

With nearly 37,000 locations worldwide, Subway was previously Coca-Cola's largest U.S. fountain account by number of restaurants according to Beverage Digest data. Now that lucrative business has been snatched up by chief rival PepsiCo.