PepsiCo, Taco Bell extend drink deal to 2036

PepsiCo and Taco Bell lock in 11-year beverage renewal

PepsiCo has renewed its U.S. beverage partnership with Taco Bell for 11 years, extending the relationship through 2036. The agreement covers participating Taco Bell restaurants, including Taco Bell Cantina and Live Más Cafe locations, and keeps signature PepsiCo beverages such as Mountain Dew Baja Blast and Baja Midnight on menus across these formats.

Under the renewed deal, PepsiCo will also continue to serve as Taco Bell’s beverage partner in Canada, the United Kingdom, Ireland and Thailand. The collaboration in these markets will focus on expanding Mountain Dew Baja Blast internationally and developing localized beverage offerings and market-specific programs.

Mountain Dew Baja Blast has grown into a $1 billion brand, solidifying its role as a key element of the Taco Bell and PepsiCo partnership. The companies plan to build on this momentum by expanding the Baja Blast lineup, including new options such as a limited-time pink lemonade created with singer Olivia Rodrigo.

The renewed collaboration will concentrate on further beverage innovation, with PepsiCo indicating a pipeline that includes crafted, functional and energy drinks. These efforts are intended to broaden Taco Bell’s beverage portfolio, while keeping exclusive offerings like Baja Blast central to the chain’s differentiating features.

Taco Bell is aggressively expanding its beverage sales and is aiming to generate $5 billion in beverage revenue by 2030. The extended partnership with PepsiCo provides a framework for reaching that goal by leveraging existing brands and rolling out new drink concepts across U.S. and selected international restaurants.

In addition to beverages, the companies plan to collaborate on new flavors for Doritos Locos Tacos, which will mark its 15th anniversary in 2027. These menu initiatives link PepsiCo’s snack portfolio with Taco Bell’s food offerings, providing further platforms for co-branded product innovation tied to the beverage lineup.

The Taco Bell renewal comes shortly after KFC, a sister chain, changed beverage suppliers. While KFC moved away, PepsiCo retained a major presence within the same restaurant group through its extended agreement with Taco Bell, including both U.S. and selected international markets.

PepsiCo recently reported a 2% decline in its North America beverage unit during its most recent quarter, and its chief executive said the company is not competing well in soft drinks, including the newly acquired Poppi brand. Against this backdrop, deepening the relationship with Taco Bell, anchored by the billion-dollar Baja Blast brand and new product innovation, positions the partnership as an important component of PepsiCo’s foodservice beverage strategy.