Coke Fountains Unit Bounces Back With Subway Win

28 November 2003

Coca-Cola's fountains division has bounced back from a difficult few months by stealing Subway Restaurants' global business from arch rival PepsiCo.

Subway has 20,000 outlets worldwide, with more restaurants in the US and Canada than McDonald's. Around 85% of its fountains business was previously held by PepsiCo, making it one of the cola giant's biggest accounts. Coke, which will now handle the whole business, formerly held just 15%.

The win is a welcome boost for Coke's fountains unit after a difficult few months. In May, a former senior executive filed a multimillion-dollar lawsuit against the firm. Although this was eventually settled last month [WAMN: 09-Oct-03], the suit did force Coke to admit that some of its employees had rigged a marketing test [WAMN: 14-Aug-03].

PepsiCo believes Subway's decision to switch suppliers reflects highly generous financial terms offered by Coke.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff