Does Pepsi Own Starbucks?

Pepsi is one of the most famous sodas out there, and PepsiCo has many sub-brands. Meanwhile, Starbucks is the largest coffee chain and sells a lot of drinks.

You may wonder if Starbucks is part of the PepsiCo brand. Whether you prefer Pepsi or a Starbucks coffee, consider if the brands are connected.

Does PepsiCo Include Starbucks?

PepsiCo doesn’t include Starbucks as a sub-brand. However, the two companies work together under the North American Coffee Partnership (NACP). They launched the first Ready-to-Drink Frappuccino over two decades ago.

The partnership has allowed Starbucks to reach a 97% market share of the Ready-to-Drink category for coffee. Without the partnership, you may not be able to get Starbucks from your grocery store drinks aisle.

Pepsi and Starbucks Partnership

Pepsi and Starbucks formed a partnership in 1994. Under the partnership, Starbucks advises PepsiCo, and PepsiCo manufactures Starbucks Ready-to-Drink (RTD) coffee. They distribute the coffee and some select energy drinks to popular grocery stores.

Does Pepsi Own Starbucks

In 2016, the partnership became a $2+ billion business. It held 97% of the RTD market share and 76% of the market share for RTD coffee, coffee energy, and chilled coffee drinks.

They started off by offering bottles of Frappuccinos to grocery store customers. Since then, they’ve added energy drinks, Refresher beverages, iced coffee, and more.

What Is the Ready-to-Drink Category?

The Ready-to-Drink category refers to coffees and other Starbucks beverages that you can buy straight from the grocery store. Now, many grocery stores have a Starbucks inside, but this is different.

You can find RTD coffee usually around the milk and other chilled beverages. Unlike other coffee that you buy at the store, you don’t have to make the coffee yourself.

Instead, you grab a bottle or can like you’d grab a soda or another drink. Then, you can walk out of the grocery store sipping on some Starbucks.

Pros and Cons of RTD Coffee

Before you head to the store to buy RTD coffee, consider the pros and cons. This category is growing, and it offers benefits. However, there are problems you should know about as well.

Quick and Convenient

One of the most significant advantages of RTD coffee is the convenience. You can go to a grocery store and get some coffee. That’s particularly nice if you already need to buy groceries or other items from the store.

You’ll only have to wait in one checkout line. Because even if your grocery store has a Starbucks shop, you have to buy from there separately.

Grocery Rewards

Buying RTD coffee also allows you to access grocery rewards. If you’re a member of a loyalty program, you may be able to get a lower price when the RTD coffee goes on sale.

Many stores also offer rewards and discounts after you purchase enough stuff. So you could get a coupon for $5 off, for example. Then, you can use the money to purchase RTD coffee, and those coupons won’t work at your local Starbucks.

Potentially Expensive

Unfortunately, RTD coffee can get expensive. The coffee itself may cost about the same as a serving you’d buy from Starbucks directly. It could cost less, so you might think you’re saving money.

However, the convenience of RTD coffee can also affect your wallet. You may end up buying RTD coffee as often as you’ve gone to Starbucks or more often. Over time, you might spend a lot more money than if you bought coffee you could make at home.

Not Every Drink

Starbucks sells a lot of RTD coffee. However, you may not be able to find all of the drinks they sell on your grocery store shelves. This is particularly true of seasonal and other specialty drinks as well as teas and certain Refreshers.

The Refreshers flavors aren’t always the same in the RTD grocery section as at your local Starbucks coffee shop. So if you’re looking for something specific, it may not be available in a bottle.

Coca-Cola and Dunkin Donuts Partnership

About 20 years after PepsiCo and Starbucks partnered up, so did Coca-Cola and Dunkin Donuts. Now, Coca-Cola makes, distributes, and sells Dunkin Donuts RTD coffee in many popular grocery stores.

Just like the other partnership, this one doesn’t mean that Coca-Cola owns Dunkin Donuts. Both are separate brands and businesses that work together to increase sales and revenue.

Of course, the Starbucks drinks are vastly more popular, at least as of a few years ago. More recently, Dunkin Donuts drinks have become more popular. But Starbucks RTD coffee still reigns supreme.

Final Thoughts

Pepsi may not own Starbucks, but the two brands work together very well. If they hadn’t joined forces, we wouldn’t have gotten a line of Ready-to-Drink coffee from Starbucks. Be sure to review your store’s selection near the other chilled drinks the next time you shop for groceries.