Wendy's has named Coca-Cola its exclusive soda for the next decade, locking Pepsi out just as it had made some inroads with the hamburger chain.
The agreement reached last week should have all Wendy's restaurants serving Coke products within two years, spokesman Denny Lynch said Monday from Wendy's International Inc.'s headquarters in this Columbus suburb.In the past, Wendy's let franchisees choose either Coke or Pepsi products.
"All of our major competitors have exclusive agreements with single soft-drink companies," Lynch said. "We're evening the playing field."
About 85 percent of Wendy's restaurants in the United States already serve Coke products, but the switch will affect 700 to 800 franchises under contract with Pepsi distributors, Lynch said.
The Wall Street Journal reported the agreement Monday.
The move is a major blow to PepsiCo Inc.'s bid to crack Coca-Cola Co.'s dominance in the fountain soft-drinks market, where Coke's 65 percent market share dwarfs Pepsi's 25 percent share.
Officials at Pepsi weren't invited to make a bid. Still they were preparing a "magnificent offer - one that will greatly exceed anything on the table,"the president of Pepsi's fountain-beverage division, Vince Gennaro, told the Journal.
Atlanta-based Coke for years has supplied Wendy's 900 company-owned restaurants in the United States as well as most of its 3,700 franchises. But Pepsi officials had persuaded some franchisees to switch to their products. Just three months ago they touted big wins in Wendy's system as proof that efforts to boost Pepsi's fountain business were paying off.
Terms of the Coke agreement weren't announced, but Wendy's chairman and chief executive, Gordon Teter, said in a letter to franchisees that Coke will pour $42 million into Wendy's national ad campaign in the first year.