Subway to Replace Coca-Cola, Pens New Deal With Pepsi-Co

On Tuesday, sandwich chain Subway announced it had reached a deal with Pepsi-Co, making Pepsi-Co the exclusive beverage provider in all US restaurants starting Jan. 1, 2025.

Under the 10-year deal, PepsiCo brands such as Pepsi, Mountain Dew, Starry (formerly Sierra Mist), and Gatorade will be sold.

Subway Welcomes Pepsi-Co as New Beverage Provider

In a press release, Subway said the new agreement underscores its commitment to delivering better food and a better guest experience. This includes ensuring the brand's beverage offerings align with guest preferences across demographics.

By 2025, all US Subway restaurants will stop serving Coca-Cola products, including Sprite, Fanta, and Diet Coke.

Doug Fry, President of Subway, North America, said that the partnership with Pepsi-Co is an exciting milestone in their journey to become America's favorite place to eat, drink, and work.

He continued that it is a win-win for everyone as it brings their guests a delicious suite of beverage and snack choices, driving additional consideration of these menu items while providing cost-effective, streamlined solutions to their franchisees.

Pepsi-Co supplies beverages to Subway in several countries, including Germany and Canada.

Furthermore, Subway announced that it will be continuing to supply chips and snacks at its locations through 2030 by expanding its collaboration with Frito-Lay, a snack food subsidiary of PepsiCo.

Subway had 19,573 outlets in the US and around 37,000 sites worldwide as of January 2024.

Subway Editorial Imagery — CRYSTAL RIVER, FLORIDA—DECEMBER 19: This image gallery includes images of Subway restaurant interior and exterior, sandwiches, sandwich artists, other menu items, and lifestyle on December 19, 2023, in Crystal River, Florida. (Photo: Gerardo Mora/Getty Images for Subway)

Subway Seals New International Development Deal

On Tuesday, Subway, keeping its global expansion strategy, announced that it had inked a deal with McWin Capital Partners to take over the brand's management in some European regions.

McWin, a major investor in the European food service business, will manage 400 restaurants in France, the Czech Republic, Luxembourg, and Belgium. It also secured new master franchise agreements in every nation to open an additional 600 stores over the next decade.

This move is anticipated to greatly expand Subway's global reach and more than double its footprint in France and Luxembourg. As Subway rebuilds its foreign growth pipeline, this partnership represents another major agreement.

Subway suffered while other big businesses prospered abroad in the years preceding the pandemic. Between 2018 and 2022, the chain closed over 2,000 locations abroad, contributing significantly to Subway's decline in popularity as the world's largest restaurant chain by unit count.

Now, it is ranked third, behind Starbucks and McDonald's.

Under CEO John Chidsey, the company has resumed international unit growth throughout the last two years, thanks to master franchise agreements in key markets.

Subway Chief Expansion Officer Mike Kehoe stated that the most recent agreement will mark another significant milestone in Subway's plans to strategically expand its international presence and allow it to accelerate development in a key region.