Pepsi and Coke in a newsstand refrigerator in New York April 22, 2005. Buffalo Wild Wings is switching from Coke to Pepsi for is restaurants.
Buffalo Wild Wings says it's switching from Coke to Pepsi, noting that it also plans to tap into PepsiCo snacks such as Doritos to create new menu offerings.
The Minneapolis-based chain, which has more than 975 locations in the U.S., said the switch will take place starting in the new year.
PepsiCo has been working to extend its snacks business through partnerships with restaurant chains. Last year, the company famously teamed up with Taco Bell to create Dorito-flavored taco shells that have since helped the fast-food chain boost its sales.
PepsiCo's Mountain Dew drinks may also be a good fit for Buffalo Wild Wings, which provides customers with TV screens to watch sporting events. The restaurant chain hopes to benefit from Pepsi's tie-ups with the NFL and Major League Baseball.
Buffalo Wild Wings said it would work with PepsiCo on joint marketing initiatives tied to sports and entertainment events, which typically draw in more customers to its sports bars and grills.
The financial terms of the agreement were not disclosed.
It's not the first time a restaurant chain has switched alliances on the beverage front. California Pizza Kitchen, for example, recently said it was switching the other way — from Pepsi to Coke.
"This is a good win by Pepsi but the fountain biz is highly competitive and accounts swing back and forth" when they open up, said John Sicher, publisher of Beverage Digest.
Overall, Coca-Cola Co. still has about 70 percent of the fountain business in the U.S., according to Beverage Digest. Its clients include McDonald's, Burger King and Wendy's.
PepsiCo Inc., meanwhile, has KFC and Pizza Hut, in addition to Taco Bell. All three fast-food chains are owned by Yum Brands Inc., which was spun off from PepsiCo in 1997.
During a recent trip to PepsiCo's food innovation lab, Buffalo Wild Wings CEO Sally Smith told The Associated Press that she was shown several dishes that might be a hit with the chain's customers. For example, Doritos as a crunchy topping for wings or tenders, or even just offering potato chips as a side dish.
Additionally, Smith said she was shown ideas for salad dressings and sandwich and chicken wing sauces that incorporate PepsiCo's sodas, including Mountain Dew.
"I don't think it will be in the next 12 months, but we'll possibly start testing after a year or 18 months," she said, noting that considerable research and planning would be needed.
More broadly, PepsiCo sees the idea of incorporating its snacks into menus as a major opportunity. Pizza Hut, for instance, has also looked at ways to team up with Frito-Lay snacks, according to a representative. Pizza Hut is owned by Yum Brands, which is also the parent company of Taco Bell and KFC.
Over at Taco Bell, Doritos Locos Tacos have been a considerable sales driver, boosting the fortunes of both PepsiCo and Yum. Taco Bell CEO Greg Creed has noted that a major advantage of the Doritos Locos Tacos is that nobody can replicate them — their success is largely tied to the popularity the Doritos brand.
(Reuters contributed to this report)
First published December 12 2013, 7:30 AM