Subway Goes with Coke

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Subway Goes with Coke

NEW YORK -- Subway is shifting its global beverage business to Coca-Cola, according to a report in The Atlanta Journal-Constitution. Coke announced the news internally on Wednesday. Until now, most Subway outlets have served Pepsi products; Coke has supplied only about 15 percent of the chain's beverages.

The Milford, Conn.-based Subway has about 14,000 restaurants in the United States and 6,000 elsewhere. All will sell Coke drinks after the conversion.

Coke's President and COO Steve Heyer trumpeted the Subway win. He said Coke will provide Subway with fountain drinks and beverages in bottles and cans worldwide, a setup that involves different units of the company, reported The Atlanta Journal-Constitution.

"This is a real win for our system, and I know the entire Coca-Cola family is honored by Subway's vote of confidence," Heyer wrote in a note to employees.
Terms of the deal were not disclosed, but Pepsi said Coke offered an ample amount to win the business.

"We have been Subway's supplier of the year for the past seven years in a row," said Larry Jobbonsky, a Pepsi spokesman. "So it's inconceivable to think this has anything to do with products or service. This is about an incredibly big bag of cash, and we hope Coke's offering the same deal to the rest of their customers," the Atlanta paper quoted Jabbonsky.

"We understand this is an inconceivable loss for Pepsi, but Coke's global presence, service and capabilities carried the day," said Coke spokeswoman Sonya Soutus, according to the news report.