100-Year 'Cola War'... Pepsi Seizes the Advantage

Subway, Coca-Cola Contract Expiration
Signed 10-Year Deal with Pepsi
"Decision Based on Customer Preferences"

In the 100-year-long 'Cola War' between Coca-Cola and Pepsi, it appears that Pepsi has recently gained the upper hand. As soon as the contract with Coca-Cola ended, Subway, the world's number one sandwich chain, partnered with Pepsi and announced that starting in 2025, all beverage offerings at its North American locations will be switched entirely to Pepsi products.

On the 19th (local time), Bloomberg reported that PepsiCo, the company behind Pepsi, and Subway have signed a 10-year contract to supply beverages to all Subway stores in North America. Under the new agreement, Subway stores in the U.S. will offer a variety of Pepsi beverages including Pepsi, Pepsi Zero Sugar, Mountain Dew, Tropicana, Lipton, and Gatorade.

Given that Subway has over 37,000 stores in 100 countries, there is a high possibility that beverage offerings will change in countries outside North America as well. It is already known that as the contract with Coca-Cola was nearing expiration, Subway began introducing Pepsi products gradually in stores in Canada, Germany, and the Netherlands.

(Photo by North America Subway Press Release)

The full-scale switch will begin on January 1, 2025.

This change in supplier came after Subway’s 15-year contract with Coca-Cola, signed in 2003, expired. Subway had ended its deal with PepsiCo in 2003 and signed a 15-year contract with Coca-Cola. In other words, the two rival companies have been alternating partnerships with the Subway chain. At that time in 2003, PepsiCo issued a statement criticizing Subway’s deal with Coca-Cola, saying, "This contract had nothing to do with cola quality or service," and suggested that "Coca-Cola likely offered an excessively generous deal."

Subway’s decision to change brands this time drew more attention as it was based on customer preference. In a related press release, Subway stated, “The decision was based on guest preferences across demographics.” This implied that tastes are gradually shifting from Coca-Cola to Pepsi.

Douglas Fry, President of Subway North America, positively evaluated the partnership with PepsiCo, saying, "This will be an exciting milestone in Subway’s journey to be a great place to eat, drink, and work," and added, "PepsiCo offers franchisees cost-effective and efficient solutions." Ann Pink, President of PepsiCo Global Foodservice, also said, “We are enhancing the consumer experience with a variety of beverages and snack products,” and promised, “We will deliver new flavors to Subway fans in a powerful way.”

Meanwhile, Coca-Cola, which has supplied beverages to Subway stores for about 20 years, issued a brief statement saying, “We will do our best to provide services scheduled through the end of this year.”