McDonald's: Seventy Years, and the Fountain Is OpeningNarrow moat
Coca-Cola (KO) — moat facet
After seventy years, McDonald's is promoting a beverage brand that isn't Coke for the first time.
The McDonald's relationship has been the single most valuable customer arrangement in the beverage industry for seven decades. McDonald's fountain Coke is a product people believe tastes different, the chain is where a generation forms its default soft drink, and the partnership has been close enough that Coca-Cola engineers the delivery system.
It is loosening. McDonald's has made room in some fountains for Dr Pepper, is adding Red Bull energy drinks, and has built a specialty beverage line including drinks not made by Coca-Cola — the first time it has actively promoted a beverage brand that is not Coke1. Coca-Cola remains the primary partner and helped develop some of the new drinks, which matters: this is a broadening rather than a rupture.
The significance is what it says about exclusivity generally. McDonald's is pursuing beverage growth, examined on its own pages in this collection, and beverage growth means variety — refreshers, energy, flavours — which is precisely the range where Coca-Cola's portfolio is weakest and where its trademark advantage counts for least.
Watch which brands appear on the menus of the other large chains as contracts renew. Fountain exclusivity is worth more than the volume it carries, because it sets defaults. Losing it at one chain is a warning; losing it at several would be a change in what the brand is worth to a buyer.
McDonald's has made room for Dr Pepper in some fountains, is adding Red Bull, and has promoted a non-Coke beverage brand for the first time in seventy years. Coca-Cola remains the primary partner and helped develop some of the new drinks, so this is a broadening rather than a rupture — but exclusivity is the thing that was worth most, and it is what is being given up.
North America holds the fountain business. Operating income falling behind revenue would suggest foodservice partners are extracting better terms.
Source: Coca-Cola Form 10-Q, quarter ended July 3, 2026 ↗- Third-party estimateMcDonald's has made room for Dr Pepper in some fountains, is adding Red Bull, and has promoted a non-Coke beverage brand for the first time, while Coca-Cola remains the primary partner and helped develop some new drinks.Reporting on the McDonald's-Coca-Cola relationship — after seven decades of partnership, McDonald's has made room in some soda fountains for Dr Pepper, is adding Red Bull energy drinks, and has launched a specialty beverage line including drinks not made by Coca-Cola; for the first time McDonald's is actively promoting a drink brand that is not Coke, while Coca-Cola remains the chain's primary beverage partner and helped develop some of the new specialty drinks — 2026 · publ. 2026 · source ↗