Subway remains one of the premier fast-food chains in the United States. The company has served Coca-Cola products since it signed a 15-year deal with the soft drinks giant back in 2003. When the deal ended, Subway began serving PepsiCo products again. Pepsi was especially prominent in international markets like Canada, Germany, and the Netherlands. Meanwhile, Subway’s United States menu features Coca-Cola products like Diet Coke, Sprite, Vitamin Water, and Dasani.
This year, Subway signed a 10-year deal with PepsiCo that will begin in 2025. The deal will see subway serve the brand’s beverages like Mountain Dew, Gatorade, and Aquafina. Customers can expect to see the introduction of Pepsi products on January 1, 2025. This roll-out will occur in all U.S. locations over several months.
Subway has said that the decision to switch brands was based on “guest preferences across demographics”. It expects the change to “provide additional value to franchisees, including all new beverage equipment provided to restaurants”.
PepsiCo unveiled its fourth quarter (Q4) and full—year fiscal 2023 earnings on February 9, 2024. In Q4 FY2023, the company delivered organic revenue growth of 4.5% compared to the previous year. Meanwhile, PepsiCo reported organic revenue growth of 9.5% for the full year.
Shares is trading in favourable value territory compared to its industry peers with a price-to-earnings ratio of 26. It offers quarterly dividend of $1.27 per share. That represents a 2.9% yield at the time of this writing.
