Costco is cutting Pepsi from its food court fountain lineup and replacing it with Coca-Cola, in a nationwide switch already underway.
CEO Ron Vachris first announced the move at Costco’s annual shareholder meeting back in January. Coca-Cola confirmed the rollout will reach all U.S. warehouses by fall, according to a statement to Fox Business. The Costco fountain drink carrier is responsible not just for the soda machines and drink syrups, but also the cups, lids, and straws offered in the food court of the warehouse giant.
So how should Costco fans feel—cheered, confused or just carbonated?
In the U.S., Coca-Cola dominates the soft drink market with a 48% share—double Pepsi’s 24%—so Costco may just be giving the people what they want. But they had a pretty good reason for using Pepsi in the first place: the $1.50 hot dog and soda combo meal.
Costco sold 150 million of the hot-dog combo meals last year. The price has been the same since the combo was introduced in 1985 and is sacred to many Costco fans.
In 2013, Pepsi beat out Coca-Cola to take over the fountain drink contract at Costco food courts. At the time, Costco executives said the switch to Pepsi was necessary to maintain the price of the $1.50 hot dog combo, according to CNN.
So the question now is: Will Costco be raising the price of the hot-dog meal?
As Costco co-founder Jim Senigal once said, “If you raise the effing hot dog, I will kill you. Figure it out.”
Die-hard Costco fans might revolt if that happens. They actually did when rumours first spread of a potential hot dog price increase in 2022 (and the MAGA funnels that were promoting this untrue story tried to blame it on Joe Biden).
Meanwhile, Coca-Cola’s sugar sourcing is making headlines of its own. After a very public and awkward miscommunication about U.S. cane sugar in Coca-Cola products, the company announced that it will be releasing a new beverage line made with U.S. cane sugar this fall. They still rejected President Trump’s earlier claims that Coca-Cola agreed to switch to cane sugar in all their products.
While the U.S. does grow a large amount of sugarcane domestically, more than 3 million tons need to be imported every year to keep up with consumer demand, and the Trump Tariffs have been wreaking havoc on a very delicate sugar trade ecosystem. The U.S. has never been self-sufficient for sugar production, so it’s hard to imagine that we’ll magically be able to generate enough sugar for these changes if the foreign trade falls apart.
