Pepsi is one of the most well-known sodas out there, and PepsiCo has many sub-brands. Starbucks is now the largest coffee chain and sells many drinks.
You may be wondering if Starbucks is part of the PepsiCo brand. Whether you prefer Pepsi or a Starbucks coffee, consider whether the brands are connected.
Does PepsiCo include Starbucks?
PepsiCo does not include Starbucks as a sub-brand. However, the two companies work together under the North American Coffee Partnership (NACP). Over two decades ago, they launched the first ready-to-drink Frappuccino.
The partnership has enabled Starbucks to achieve a 97% market share in the ready-to-drink coffee category. Without the partnership, you may not be able to get Starbucks from your grocery store’s beverage aisle.
Partnership between Pepsi and Starbucks
Pepsi and Starbucks partnered in 1994. As part of the partnership, Starbucks will advise PepsiCo, and PepsiCo will manufacture Starbucks Ready-to-Drink (RTD) coffee. They distribute the coffee and some select energy drinks to popular grocery stores.
In 2016, the partnership grew into a $2 billion+ deal. It held 97% of the RTD market share and 76% of the market share for RTD coffee, coffee energy and chilled coffee beverages.
They started out offering bottles of Frappuccinos to grocery store customers. Since then, they’ve added energy drinks, soft drinks, iced coffee, and more.
What is the ready-to-drink category?
The ready-to-drink category refers to coffee and other Starbucks beverages that you can purchase directly from the grocery store. Now many grocery stores have a Starbucks inside, but this is different.
You can usually find RTD coffee near milk and other chilled beverages. Unlike other coffee you buy in the store, you don’t have to prepare the coffee yourself.
Instead, you grab a bottle or can as if you were grabbing a soda or other beverage. Then you can walk out of the grocery store and sip on 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 offering benefits. However, there are also issues that you should be aware of.
Fast and convenient
One of the key benefits of RTD coffee is convenience. You can go to a grocery store and get a coffee. This is especially nice if you already need to buy groceries or other items from the store.
You only have to queue at a cash register. Because even if your grocery store has a Starbucks store, you still have to shop there separately.
food bonuses
You can also access food rewards by purchasing RTD coffee. If you are a member of a loyalty program you may receive a lower price when RTD coffee goes on sale.
Many stores also offer bonuses and discounts after you purchase enough items. For example, you could get a $5 off coupon. Then you can use the money to buy RTD coffee and these coupons will not work at your local Starbucks.
Potentially expensive
Unfortunately, RTD coffee can get expensive. The coffee itself can cost about the same as a serving you would buy directly from Starbucks. It might cost less, so you might think you’re saving money.
However, the convenience of RTD coffee can also hit your wallet. You end up buying RTD coffee as many times as you’ve been to Starbucks, or more. Over time, you may end up spending a lot more than you would if you were buying coffee that you could brew at home.
Not every drink
Starbucks sells a lot of RTD coffee. However, you may not be able to find all the drinks they sell on your grocery shelves. This applies in particular to seasonal and other beverage specialties as well as teas and certain soft drinks.
Refresher flavors aren’t always the same in the RTD grocery department as they are in your local Starbucks coffee shop. So if you’re looking for something specific, it might not be available in a bottle.
Partnership between Coca-Cola and Dunkin Donuts
About 20 years after PepsiCo and Starbucks partnered, so did Coca-Cola and Dunkin Donuts. Now, Coca-Cola manufactures, distributes and sells Dunkin Donuts RTD coffee in many popular grocery stores.
Like the other partnership, this one does not mean that Coca-Cola owns Dunkin Donuts. Both are separate brands and companies that work together to increase sales and revenue.
Of course, Starbucks drinks are far more popular, at least for the past few years. More recently, Dunkin Donuts drinks have become increasingly popular. But Starbucks RTD coffee still comes first.
Final Thoughts
Pepsi may not own Starbucks, but the two brands work very well together. If they hadn’t teamed up, we wouldn’t have gotten ready-to-drink coffee from Starbucks. Next time you’re grocery shopping, be sure to check your store’s selection near the other chilled drinks.
