Burger King In Talks With Coke, May End Ties With Pepsi: Report

If Burger King formalises the deal then the top two global burger chains in India, other being McDonald's, will be aligned with Coca-cola
Burger King
Burger King

Burger King is in advanced negotiations to sign a deal with Coca-Cola as its exclusive beverages partner. Consequently, the second largest burger chain in India may break off its near 10-year relationship with rival Pepsico.

The alignment with Coca-Cola is expected to be formalised and announced by the end of next quarter, officials aware of the matter told ET.

Burger King has been associated with PepsiCo since it came to India in 2014. If the potential deal is formalised, the top two global burger chains in the country, McDonald's and Burger King, will be aligned with Coca-Cola.

"Coca-Cola has been escalating its 'Coke with meals' platform aggressively and has 15% stake in food delivery platform Thrive, which competes with Swiggy and Zomato, with a base of more than 14,000 restaurants. Such an association directly benefits both restaurants and the beverage maker, and was among the reasons that clinched the deal with Coca-Cola," one of the executives said.

"Top-rung engagement with PepsiCo was also limited," another of the executives cited above, said.

Burger King is aligned to Coca-Cola in many world markets, but in India, the US-based fast-food chain has been in an exclusive partnership with PepsiCo since it came to India.

Yum! Brands-owned KFC and Pizza Hut, operated in India by two franchise partners Devyani International and Sapphire Foods, have exclusive partnerships to serve rival PepsiCo's beverages in India.

The potential deal will give Coca-Cola immediate traction and access to serve at more than 391 stores of Burger King and its coffee and beverage sub-brand BK Cafe in India. In addition to soft drinks Coke, Thums Up and Sprite, Coca-Cola sells Minute Maid juice and Georgia coffee.

Exclusive partnerships such as these with large food services chains are key accounts which can drive significant incremental sales in out-of-home and delivery channels.

Coca-Cola India had acquired the stake in Thrive, owned by Hashtag Loyalty, in April this year, in what was its first investment in a startup in India.

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