PepsiCo has spent much of this year watching Coca-Cola poach its customers. This week, it had some better news: Yum! Brands' Taco Bell is staying put. The fast-food chain agreed Thursday to extend its beverage partnership with PepsiCo for another 11 years, keeping Pepsi, Mountain Dew, and other drinks flowing at participating U.S. restaurants through 2036.
The agreement follows a rough stretch in the cola wars. Last week, KFC said it would replace PepsiCo beverages with Coke at roughly 3,600 U.S. restaurants starting in January, ending a nearly 40-year relationship. Marriott made a similar switch in July after more than three decades with PepsiCo.
PepsiCo isn't retreating from the fight. The company is investing in technology and developing exclusive products to help its restaurant partners attract customers. For example, PepsiCo worked with Taco Bell to create Mountain Dew Baja Blast, now a billion-dollar brand, and Doritos Locos Tacos.
PepsiCo's sales to restaurants and other venues rose by a mid-single-digit percentage in the third quarter of 2025, and management reported further growth one year later. That's an encouraging sign as the company struggles with weak beverage demand in North America, where volumes fell 2% in the latest quarter.
The Taco Bell renewal isn't a new conquest. But after losing ground to Coca-Cola, defending a prized customer is a victory in itself.
Write to Evie Liu at evie.liu@barrons.com
Last Week
Whiplash
Wall Street was in love with tech again last week...and then fell out of love. The Nasdaq Composite, which was roughed up the week before, was up 2.2% through Wednesday, and then took a tumble.
Musklandia
Another crazy Elon week. Lawmakers want to know: Did Musk help Russia by restricting Ukraine's access to his Starlink network? Musk, who is also pushing a merger of his two companies, Tesla and SpaceX, is facing the possibility of a Democratic takeover of Congress -- and a slew of subpoenas to follow. Is he worried? Well, he has so far sunk $366 million into this election cycle. So, yes.
Sahm's Take
The Fed meets Tuesday/Wednesday; the odds are slim it will vote to raise rates. But the New Century Advisors economic chief and super Substacker Claudia Sahm says board members should act now. Raising rates "reduces the odds" that "upside inflation risks...become reality and force larger hikes later." She adds: "A rate hike is not urgent, but is prudent."
Ticket scam?
In 2015, the Milwaukee Brewers sold "forever tickets" for $1,000. For what? Access to, well, an event like a World Series Brewers game. Hundreds cashed in, but were stuck with lousy seats. The Brewers then gave angry owners those seats and a ticket for a future game. By the way, if you had sunk $1,000 in the S&P 500 in 2015, it would be worth $4,000-plus now.
Next Week
Monday 10/26
This week is the busiest on the third-quarter earnings calendar, with about a?third of S&P 500 index companies slated to report results. Verizon Communications reports on Monday, followed by Boeing, Coca-Cola, and Visa on Tuesday. Alphabet, Ford Motor, GE Vernova, Microsoft, and?T-Mobile US release earnings on?Wednesday, while Amazon.com, Caterpillar, Eli Lilly, Intel, Mastercard, and Merck follow on Thursday. AbbVie, Chevron, and ExxonMobil Holdings report on Friday.
Wednesday 10/28
The Federal Open Market Committee announces its monetary-policy decision. The central bank is expected to keep the federal-funds rate unchanged at 3.75% to 4%, with traders pricing in only a 10% chance of a quarter-point interest-rate hike, according to the CME FedWatch Tool.
Thursday 10/29
The Bureau of Economic Analysis releases the personal consumption expenditures price index for September. Economists forecast a 3.6% year-over-year increase, two-tenths of a percentage point more than in August. The core PCE price index is expected to rise 3.1%, compared with?3% previously.
The Numbers
38.8%
Earnings-per-share growth at the S&P 500 companies reporting so far this earnings season.
$1.48 T
Margin debt, its second-highest level on record, after soaring $26 billion in September.
29
NAHB/Wells Fargo index of home-builder confidence in October, off three points to lowest since 2012.
50%
General Motors' planned cut in design time for new vehicles, from four to five years now, thanks to AI.
Write to editors@barrons.com
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