Burger King, India’s second-largest burger chain, is currently engaged in advanced discussions to establish an exclusive beverage partnership with Coca-Cola, signaling the end of its nearly decade-long association with rival PepsiCo, according to sources familiar with the matter.
The executives stated that the formal announcement of the partnership with Coca-Cola is anticipated to be made by the conclusion of the next quarter.
Burger King has maintained its affiliation with PepsiCo since its inception in India in 2014. Upon the finalization of the prospective agreement, both of India’s leading global burger chains, McDonald’s and Burger King, will be in partnership 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.
At the time of press, emails seeking comments from spokespersons of Coca-Cola, PepsiCo, and the private equity company operating Burger King through Everstone remained unaddressed.
While Burger King has formed partnerships with Coca-Cola in numerous global markets, it has maintained an exclusive affiliation with PepsiCo since its inception in India, diverging from its usual worldwide practice.
KFC and Pizza Hut, both owned by Yum! Brands, operate in India through two franchise partners, Devyani International and Sapphire Foods. They have exclusive agreements to serve PepsiCo’s beverages, even though Burger King is shifting towards Coca-Cola in India.
If finalized, this prospective agreement will grant Coca-Cola immediate access to a network of over 391 Burger King stores and its coffee and beverage sub-brand, BK Cafe, throughout India. In addition to offering soft drinks such as Coke, Thums Up, and Sprite, Coca-Cola also markets Minute Maid juices and Georgia coffee.
Exclusive partnerships like these with prominent food service chains represent critical accounts capable of generating substantial additional sales in both out-of-home and delivery channels.
In April of this year, Coca-Cola India acquired a stake in Thrive, a company owned by Hashtag Loyalty, marking its initial investment in an Indian startup.