Background: PepsiCo is the food and drinks giant behind Pepsi and plenty of other household snack brands. Pepsi first hit the scene in the 1890s, originally marketed as a drink that could boost energy and aid digestion. Since then, it's been competing with Coca-Cola in one of the longest-running rivalries in the beverage business.

What happened: The Cola Wars just took another turn, and Pepsi's taking the hit. KFC is replacing Pepsi fountain drinks with Coca-Cola at its US stores starting in 2027. The big switch ends a partnership that's lasted more than 40 years. Sounds like the Colonel is officially switching sides...    

What else: Pepsi is already trailing Coke in the US soda market, holding 8.1% market share compared with Coke's 18.5%. The KFC switch also comes after Pepsi was taken out of Costco food courts in 2025 and Marriott's hotel partnership more recently. And losing another major partner could mean PepsiCo's brand equity takes a hit.

What's the key learning?

💡 Brand equity is the value a company gets from building a strong reputation. Businesses build brand equity through creating recognisable products... and their partnerships with other trusted brands.    

💡 Partnering with a big name can boost your brand, but losing it can hurt just as much. For PepsiCo, KFC has been a major source of brand exposure. Every customer walking out with a KFC drink has also been carrying a PepsiCo logo. Now, they'll be taking home a cup with the logo of Pepsi's biggest competitor.

💡 A hit to brand reputation can shake investor confidence, too. PepsiCo's stock is down around 10% this year and fell 0.7% on the day KFC announced the switch. With one of the world's most recognisable fast-food chains dropping Pepsi, investors may already be nervous about what this means for the brands value.