In a dramatic switch for the first time in over a decade, Costco, the very popular wholesaler, is replacing Pepsi products with offerings from Coca-Cola at its food court locations. This represents a return by Costco again to carrying Coca-Cola food court offerings. It replaced it with Pepsi in 2013. Changeovers begin this summer.
A decade-long partnership with Pepsi
In 2013, Costco decided to oust Coca-Cola from its food courts and replace them with PepsiCo products. It was basically a cost-cutting measure that would help keep the price of its famous $1.50 hot dog and soda combo low, a price that has not changed since the 1980s.
The return to Coca-Cola
It was announced by Costco Chief Executive Ron Vachris at the company’s annual shareholder meeting on January 23, 2025. He said, “We will be converting our food court fountain business back over to Coca-Cola.”
This means that Coke, Diet Coke, Coke Zero, Fanta,Sprite, etc. will replace the Pepsi products currently sold in Costco’s food courts. The switch is projected to be fully implemented by summer 2025.
Customer reactions
This has been received with equal applause and irritations among Costco members since the move. Most responded wanting Coca-Cola back because they favor its products for taste over its rival. Others were saddened, perhaps by the loyalty to Pepsi.
Costco Insider supporters from an online poll revealed 87% favored Coca-Cola over Pepsi in support of this change as proposed by the majority perspective of these members.
$1.50 Hot Dog combo relation
Costco has cushioned the blow of the beverage provider switch by assuring that the $1.50 hot dog and soda deal-a mantra for decades as the warehouse food courts have become household names for cheap, satisfying meals-will still retain its price.
Market context
This comes at a time when Coca-Cola has been doing badly in the market. For the third quarter of 2024, it reported a year-over-year operating income decline of 23% and a drop in sales of concentrates by 2%. A renewed partnership with Costco might help Coca-Cola make gains in retail.
Outlook
As Costco makes this huge switch, members will again begin to see Coca-Cola beverages returning to the food courts nationwide. The company is trying to get it all done by summer 2025 so that their favorites can pair up in the food court with favorite Coca-Cola drinks.
