Subway fans will soon be forced to adjust to a new norm as the company is switching sides in a popular rivalry in the drink industry. The fast-food chain is planning to retire its beloved drink supplier, Coca-Cola (which has served the restaurant for over 20 years), and is replacing it with the supplier’s top competitor, PepsiCo (PEP) .
Customers will only be able to enjoy Coca-Cola drink brands such as Dasani, Diet Coke, Sprite, Fanta, etc, in Subway’s U.S. stores until January 1, 2025. PepsiCo will then bring drinks such as Pepsi, Mountain Dew, Tropicana, Aquafina, Gatorade, etc, to U.S. Subway locations, and it will become the new norm for a whopping 10 years due to a new agreement between the two companies.
Related: Subway makes a major menu change
Subway also announced that it is extending its partnership with Frito-Lay through 2030 which will bring “the brand's U.S. snack and beverage portfolio together under one supplier,” according to a press release.
"It is a win-win for everyone, as it brings a delicious suite of beverage and snack choices to our guests, driving additional consideration of these menu items, while also providing cost-effective, streamlined solutions to our franchisees." said Doug Fry, president of Subway, North America, in the press release.
The recent change in Subway’s U.S. locations may not be the last. The company has been on a "multiyear transformation journey," which began in 2021. As a result, Subway has been revamping its menu over the past few months. One of its most recent major changes include the introduction of Subway Sidekicks on Jan. 22, which is a series of 12-inch snacks that include a footlong chocolate chip cookie, a churro and an Auntie Anne's Pretzel.
Subway also debuted “freshly sliced meats” in its U.S. locations in July last year, where it introduced four new deli-style sandwiches.
The recent switch to PepsiCo by Subway also comes after Jefferies analyst Kaumil Gajrawala predicted in November last year that PepsiCo’s shares will rise by 20% this year, and that its market value could increase to roughly $279 billion, dethroning Coca-Cola as the top beverage company in the U.S.
Gajrawala claimed in an analyst note that PepsiCo’s recent growth is the result of the company’s “hefty investments over the last half decade.”
The last time PepsiCo was able to surpass Coca-Cola’s market value was in 2006, which was the first time it did so in its over 100-year rivalry. PepsiCo’s stock declined by over 30% that year.
