Just days after KFC announced it was ending its nearly 40-year relationship with PepsiCo, another major fast-food chain has made the opposite decision.
Taco Bell is extending its partnership with the beverage giant for another 11 years, securing the future of its popular Mountain Dew Baja Blast and other PepsiCo beverages through 2036.
The agreement, announced Oct. 22, covers participating Taco Bell restaurants, Taco Bell Cantina locations, and its expanding Live Más Café concept across the United States.
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“What makes this partnership special is how we bring together Taco Bell’s connection to culture with PepsiCo’s consumer insights, culinary capabilities and beverage expertise to create what’s next,” said Anne Fink, president, PepsiCo Global Away from Home.
“We’re excited about what we can build together over the next 11 years.”
But the deal goes beyond keeping familiar sodas on Taco Bell’s menu. PepsiCo and Taco Bell are planning additional specialty drinks, energy beverages, and food innovations as the restaurant chain seeks to attract customers throughout the day.
For Baja Blast fans, the agreement offers long-term continuity at a time when another Mountain Dew restaurant-exclusive flavor faces an uncertain future.
Taco Bell secures Mountain Dew Baja Blast through 2036
Under the renewed partnership, customers will continue to see Pepsi, Pepsi Zero Sugar, Mountain Dew, Starry, Mountain Dew Baja Blast, and Baja Midnight at participating locations.
Baja Blast, which debuted at Taco Bell in 2004, has become one of the most recognizable products associated with the chain.
The tropical-lime-flavored beverage has since grown into a billion-dollar brand, according to PepsiCo.
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Its popularity also generated numerous spin-offs, including Baja Blast Gelato, limited-time pink Baja Blast beverages, and other specialty offerings.
In August 2025, Taco Bell introduced Mountain Dew Baja Midnight, a permanent flavor combining Baja Blast’s signature tropical-lime taste with passion fruit.
The renewed agreement protects the relationship that made these products popular; however, Baja Blast is not a Taco Bell exclusive product.
After years of restaurant exclusivity and limited retail releases, PepsiCo expanded the original flavor to year-round grocery and convenience-store sales in 2024.
Baja Midnight, however, remains a Taco Bell-exclusive offering.
Taco Bell is preparing more beverages and new menu items
The two retailers now plan to develop more crafted drinks, functional beverages, and energy offerings, with particular attention to younger consumers and morning and afternoon visits.
PepsiCo said the next phase will build on innovations such as Taco Bell’s Refrescas, a line of specialty beverages featuring fruit-inspired flavors.
The collaboration is also expanding beyond drinks.
Doritos Locos Tacos, introduced in 2012 through Taco Bell’s partnership with PepsiCo’s Doritos brand, will celebrate its 15th anniversary in 2027.
PepsiCo confirmed that new flavors are planned, although the companies have not announced specific products or launch dates.
The partnership also extends internationally, with PepsiCo continuing as Taco Bell’s beverage partner in Canada, the United Kingdom, Ireland, and Thailand.
The companies also intend to develop additional drinks tailored to these markets.
Taco Bell has more new drinks arriving in December
The agreement comes as Taco Bell aggressively expands its beverage business through Live Más Café, a concept that offers specialty coffees, frozen drinks, Refrescas, and other beverages.
As TheStreet previously reported, Taco Bell introduced its first permanent Cold Brew lineup at Live Más Café locations earlier this year.
The concept has since grown to 39 locations and has sold approximately 1.3 million beverages since its launch, according to an Oct. 15 Taco Bell announcement.
That same announcement introduced four horchata-inspired beverages at Live Más Café, including a Purple Horchata Chiller, Chocolate Horchata Cold Brew Float, and two flavored Refrescas.
Three additional nationwide offerings are scheduled for Dec. 10, when participating Taco Bell restaurants will begin serving Strawberry Horchata Refresca, Vanilla Spiced Horchata Refresca, and Vanilla Spiced Horchata Freeze for a limited time.
Taco Bell is also expanding Live Más Café into additional locations in Indiana, Southern California, and Las Vegas.
The chain has set a goal of generating $5 billion in beverage sales by 2030.
The renewed PepsiCo partnership gives Taco Bell an established beverage supplier and product-development partner as it pursues this ambition.
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KFC is switching to Coca-Cola instead
Taco Bell’s decision stands in contrast to KFC, even though both restaurant chains are owned by Yum! Brands.
On Oct. 15, KFC confirmed a new U.S. partnership with Coca-Cola, ending its domestic relationship with PepsiCo that began in 1986.
Coca-Cola products will begin appearing at KFC restaurants in January 2027, with the transition expected to reach all 3,600 U.S. locations by spring.
The change also affects Mountain Dew Sweet Lightning, a peach-and-honey-flavored soda developed specifically for KFC in 2019.
As TheStreet previously reported, PepsiCo confirmed that Sweet Lightning will remain available at KFC through Dec. 31, 2026.
The company has indicated it intends to find other ways for fans to enjoy the beverage but has not disclosed how or where it might return.
That creates a notable difference between the two Mountain Dew flavors: Baja Blast has a secure restaurant partnership and an established retail presence, while Sweet Lightning’s future remains unresolved.
PepsiCo faces mounting competition in soft drinks
The Taco Bell agreement also comes at a difficult time for PepsiCo’s North American beverage business.
During its third-quarter earnings call, CEO Ramon Laguarta acknowledged that the company was struggling to compete in the carbonated soft drink market.
“We are not competing well in soft drinks,” Laguarta said, while outlining plans to increase investment and improve execution.
As TheStreet reported in its coverage of PepsiCo’s plant closures, North American beverage volume declined 2% during the quarter, despite reported revenue growth.
As such, maintaining a recognizable restaurant partnership gives PepsiCo an important platform for introducing new products to consumers.
And for Taco Bell customers, the good news is that Baja Blast is staying, with more drinks and flavors planned in the years ahead.
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