It's official: Your Subway to come with Coke

Subway India has ended its five-year exclusive deal with beverages maker PepsiCo India to sell its products at the sandwich and salad chain's outlets, and signed up with rival Coca-Cola, executives aware of the development said.

All 570-plus Subway stores in India will now sell only Coca-Cola's soft drinks, juices, coffee, tea and water, one of the executives said.

A Coca-Cola spokesperson confirmed the deal with Subway. "We constantly join forces with different brands," she said in an emailed response to ET's queries.


The sandwich chain has started updating its online ordering app with Coca-Cola drinks, on aggregator platforms such as Swiggy and Zomato.

Subway India and PepsiCo had announced their partnership in 2018.

Exclusive beverage partnerships with large food services chains drive significant sales via out-of-home and delivery channels for companies like PepsiCo and Coca-Cola. While Coca-Cola has an exclusive global partnership with McDonald's, Yum Brands-owned KFC, Pizza Hut and Taco Bell, which are operated in India by Devyani International, Sapphire Foods and Burman Hospitality, respectively, and Jubilant FoodWorks' Domino's Pizza, have exclusive associations with PepsiCo in India.

PepsiCo India vice president George Kovoor told ET that the company does not comment on specific partnerships. "Having said that, we continue to work with industry leaders in critical channels," he said in an emailed response.

Subway India executives remained unavailable for comment. The sandwich chain is operated in India by Culinary Brands, part of private equity company Everstone Group, which also has operating franchise rights for Lavazza coffee and Fresh & Honest Cafes in the country.

According to one of the executives, Subway made the switch on account of a larger brand portfolio and service reach by Coca-Cola.

The American sandwich chain's business has been aligned with Coca-Cola in most large markets. Burger King, too, is learnt to be in advanced negotiations to sign Coca-Cola as its beverages partner. The burger chain has been aligned with PepsiCo in India for almost 10 years.

All large listed quick-services companies in India have retained growth and expansion guidance for this fiscal year, despite some slowing of sales in the past few quarters.

According to credit ratings firm ICRA, the top five players in the domestic QSR industry are expected to add 2,300 stores between FY23 and FY25, with an estimated capital expenditure of ₹5,800 crore.

Other than restaurant chains, multiplexes too are rapidly growing as out-of-home channels for food and beverage companies, since exclusive deals with them ensure a captive consumer market.