PEPSICO has reached an agreement to become the exclusive provider of beverages at all Subway sandwich shops in the US, replacing rival Coca-Cola as the drink supplier to one of the nation’s largest chains.

Subway announced the new 10-year pact to serve PepsiCo products such as Mountain Dew sodas, Tropicana juices and Gatorade sports drinks on Tuesday (Mar 19).

Coca-Cola brands like Sprite, Fanta and Diet Coke will begin to disappear from the sandwich chain beginning in January 2025, and will take several months to replace across Subway’s network of franchisee-owned restaurants.

“We are committed to serving Subway through the end of this year,” Coca-Cola said in a statement. The beverage giant has served Subway’s US restaurants for nearly 20 years, the company said.

Subway is Coca-Cola’s largest US fountain account by number of locations, according to Beverage Digest.

Subway, which operates about 20,000 restaurants in the US and nearly 37,000 worldwide, said it’s also extending its existing agreement with Frito-Lay, PepsiCo’s snack-food unit, to provide chips and snacks at its restaurants through 2030. PepsiCo already provides beverages at Subway shops in several regions outside the US.

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Subway announced a deal in 2023 to be acquired by the Atlanta-based private equity firm Roark Capital Group for nearly US$10 billion. The deal is pending a Federal Trade Commission investigation, according to Politico.

PepsiCo shares rose 0.7 per cent at 10.02 am in New York. Coca-Cola stock was up 0.2 per cent. BLOOMBERG