PepsiCo closes Tennessee bottling plant and renews Taco Bell partnership

PepsiCo is closing its bottling plant in Knoxville, Tennessee, a move that will affect 112 employees across manufacturing, maintenance, and warehouse operations. According to a Worker Adjustment and Retraining Notification filing, the company intends to reassign affected staff to nearby facilities and has announced a paid notice period lasting until January 1, 2027.

In a separate strategic development, PepsiCo has renewed its U.S. beverage partnership with Taco Bell through 2036. This extension follows news that KFC, also owned by Yum Brands, plans to switch its U.S. beverage supplier to Coca-Cola. Despite the loss of the KFC account in the United States, PepsiCo remains a key partner for KFC’s international markets.

The company is also navigating financial pressures, including margin compression in its North American beverages business and a slight decline in organic revenue. Consequently, PepsiCo has lowered its 2026 earnings outlook, now projecting core earnings per share growth of 1% to 2%, down from its previous forecast of 4% to 6%.