Subway Switches to PepsiCo Beverages in the US After Franchisee Group Lifts Objections
Subway and PepsiCo: A New Partnership
Subway is moving forward with a switch to PepsiCo Inc. beverages in the US, following a major franchisee group dropping its opposition to the terms of the agreement. According to Anne Fink, president of global foodservice at PepsiCo, "We are ready to go." While there are still some holdouts among Subway franchisees, it is "not a material number."
The Background
In March, Subway announced that it would be serving PepsiCo beverages, ending a long-standing relationship with Coca-Cola Co. With over 20,000 stores, Subway has more US locations than any other restaurant chain. The partnership marks a significant win for PepsiCo, which makes popular brands like Mountain Dew and Starry.
Franchisee Group Lifts Objections
The North American Association of Subway Franchisees, which represents about half of Subway’s stores, initially advised members not to sign the agreement due to a section that the association objected to. However, in October, this section was removed, and the organization stopped advising against signing the agreement, according to Bill Mathis, the group’s chair.
What’s in the Agreement?
Under the agreement, which begins on January 1, Subway will offer PepsiCo beverages, including Pepsi, Pepsi Zero Sugar, and Gatorade. This marks a significant shift from the chain’s previous beverage provider, Coca-Cola.
Growth Opportunities for PepsiCo
Foodservice is an opportunity for growth for PepsiCo, according to Fink. "My job is to make sure it’s growing faster than the rest of the company," she said, referring to the segment.
Conclusion
Subway’s switch to PepsiCo beverages marks a significant development in the fast-food industry. With the partnership, PepsiCo is expected to benefit from the widespread reach and popularity of Subway’s brand.
Frequently Asked Questions
Q: Why did the North American Association of Subway Franchisees initially object to the agreement?
A: The association objected to a specific section of the agreement, which was later removed.
Q: What are the terms of the agreement between Subway and PepsiCo?
A: The agreement will see Subway offer PepsiCo beverages, including Pepsi, Pepsi Zero Sugar, and Gatorade.
Q: How many Subway locations will be affected by the switch?
A: Over 20,000 Subway stores in the US will be impacted by the partnership.
