The Journal. - McDonald’s and Coke's Marriage Might Need a Refresher

Episode Date: June 25, 2026

For 70 years, McDonald’s and Coca-Cola have teamed up as fast food juggernauts. WSJ’s Heather Haddon and Laura Cooper explore how changing consumer tastes and increasing competition are challenging their iconic brand partnership. Imani Moise hosts. Further Listening: - McDonald’s Wants To Offer Quality And Value. Can It Do Both? - 'It Came out of Nowhere': The Rise of Dr Pepper - KFC Got Fried in the Chicken Wars. Can It Come Back? Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, it's Ryan. Our colleague of Mani Moise is here to guest host today's episode. Here it is. McDonald's and Coca-Cola are two of the world's most recognizable brands. And their success has been, in part, due to their more than 70-year collaboration. It all began in an Illinois parking lot in 1955. So Wadi Pratt was a salesman at Coca-Cola, and he was looking to develop new business for the company. and he met with a new franchise restaurant CEO named Ray Kroc. Our colleague Heather Hadden covers restaurants. And he found Ray Kroc outside of a restaurant he had just opened in the Chicago suburbs. And they struck up a friendship and a business relationship that would span for decades and decades.

McDonald's was basically a startup back then. This was the first location east of the Mississippi. But Crock had plans to go bigger. One thing Ray Croc was really known for is uniformity and consistency in his restaurants. So he wanted to pick suppliers that could scale as much as his ambitions for the company. So he was seeing this very small restaurant chain that he had just embarked on as one day operating restaurants all over the country. And so he wanted products that he could serve in these restaurants all over the country. and they wanted to be uniform, whether that was ketchup or cola.

So in the parking lot that day, Wadi Pratt had a pitch. Coke should be the signature drink at McDonald's. Croc liked the idea. And so he decided that Coca-Cola, the regular Coke, would be the beverage of choice in his McDonald's restaurants. Striking a storied handshake agreement to just marry, these two brands, you know. So it's really very all-American, the story. That's our colleague Laura Cooper. She covers the beverage industry.

So while this, you know, started out as Coca-Cola, it's grown to involve, for instance, Sprite and all kinds of different drinks over the years. The partnership has helped make both brands into American icons. But the relationship is having issues. because McDonald's is no longer content planning all of its drinks around Coke. Tastes are changing. People are looking for things other than just soda at McDonald's.

Welcome to The Journal, our show about money, business, and power. I'm Imani-Mauiz. It's Thursday, June 25th. Coming up on the show, for 70 years, Coke and McDonald's have been joined at the sip. But customers are thirsty for something new. Back in the 50s, when McDonald's and Coca-Cola first went into business together, brand partnerships weren't really a thing.

Fast food was in its infancy then, so there really wasn't big national chains like we know today. You know, there was regional burger players. There was regional restaurants. Ray Kroc wanted deals with national suppliers to keep things simple and cheap. And it also meant that the quality and what you could expect at a McDonald's was uniform all over the country as it grew. and clearly McDonald's has grown and grown. And since that fateful parking lot handshake, one of its longest standing suppliers has been Coca-Cola. The company has been part of McDonald's DNA

as the chain has grown to become a global franchise. Remember those old-fashioned fountain glasses made famous by Coca-Cola? Well, right now, you can take home one of those classic glasses for 29 cents when you buy a medium-sized Coke at McDonald's. You know, for Coke, McDonald's really helped it expand all over the world because McDonald's had a lot of these existing relationships and existing franchisees in other countries. McDonald's helped introduce Coke products to Russia

as a restaurant expanded there. It became a huge market for Coca-Cola. Well, it's been 14 years in the making, and today, finally, McDonald's threw open the doors to its first restaurant in Moscow. And make no mistake, this was an event of major gastronomic proportions. Coke took it very seriously. They also created their own division within Coca-Cola called TMD, the McDonald's division,

which is a separate division within Coca-Cola that just deals with McDonald's. So it shows you how important the McDonald's account is. Together, the two companies created the value meal. And the idea that a McDonald's burger wouldn't be complete without an ice-cold Coke. They became a really key partner in developing the extra value meals that we all know that McDonald's and now many other chains offer. So that's order of our golden fries plus a large Coke for just 39 cents more. Try a triple cheeseburger with fries and a Coke and an extra value meal. So that's a sandwich or chicken nuggets and fries and a beverage.

These were novelties in the 1990s when they first started expanding across McDonald's restaurants. And you would get all that for. an affordable price, cheaper than buying all these items a la carte. These meal deals boosted sales for both companies. Here are your eight Big Macs, ten fries, and your Coca-Cola classic. You must really be hungry. Nope, just lucky. One in eight...

Coke was on the TV screen for so long for McDonald's ads and generating sales in those restaurants and for McDonald's to have this, you know, key partnership expanded its line of products. Coke products aren't the only drinks on the mandatory. menu at McDonald's. Dr. Pepper got a spot on the fountains, and some locations even briefly experimented with selling bottled Pepsi products. But Coke has always been king. Look who's got the new taste of Coke. Big Mac has to wait for you. So McDonald's brought Coke to the world, and Coke brought customers to McDonald's for a drink they couldn't get anywhere

else, literally, because Coke at McDonald's is unique. They have worked really hard to make Coke the best tasting in all of the McDonald's restaurants. A lot of people say that if you get a McDonald's Coke, it's crisper than if you were to get it anywhere else. So they put a lot of time and effort into that. Have you ever had a Coke at McDonald's and thought there was something kind of different about it? That's not just in your head. McDonald's says the water they use for Coke is filtered in a specific way. It's also chilled to a particular temperature, and the syrup concentration is special too.

The regular Coca-Cola syrup is trucked to McDonald's restaurants and it is siphoned off in a hose, which means it's never housed in plastic containers, which both sides say, you know, that keeps the quality and the taste far superior than you'd get in other restaurants or what you'd get off the shelf. That sounds like a lot of effort for a soft drink. Has it paid off for the companies? They would say so, yes. So McDonald's is the biggest restaurant that Coke has among its customers. Insiders talk about the McDonald's Coca-Cola collab as greater than the sum of its parts. There is an expression that you can hear within these companies that one plus one is greater than two,

or one plus one is three. And I think that does reflect that. That they view their work together has better themselves beyond just what they would be independently. They share data, they have this team within Coke that's just devoted to McDonald's business, that they just get more out of this work together than they would by themselves. It's been a 70-year marriage. But customers changing tastes are starting to complicate their relationship, specifically the demand for more drink options.

And competitors are cashing in. Taco Bell's Mountain Dew Baja Blast, a custom collaboration with Pepsi, now brings in a billion dollars a year. Fruity Refresher drinks at Starbucks are a $2 billion brand. You know, anyone who has gone to a Starbucks in the last decade knows this is the way things are going. There's more cold foam, there's more boba, there's macha in beverages. You know, there's just all kinds of variants of beverages today. And traditional soda just isn't enough.

So it's really just been an explosion in these different kinds of chains, offering. all kinds of drinks. And beverages are easy money for restaurants, right? Yeah, beverages are big business. I mean, beverages have some good margins. I think that they can bring people in and make more money for companies. And so it's definitely an important category for restaurants.

McDonald's estimates the global market for drinks has grown to be worth about $100 billion. And the company wants a bigger piece of that. McDonald's franchisees and executives for a long time now have been asking for more options. They've been asking for different things that they can provide in their restaurants. I think there was just kind of a sense that the Coke range had stalled out a bit. And that has meant that McDonald's has had to look around and say, we need to offer something different than just Coke for our consumers.

After the break, McDonald's explores opening up its relationship with Coca-Cola. Things are changing for McDonald's and Coke. One former McDonald's franchisee who worked closely with Coca-Cola, told Heather, quote, Coke gets the message that we want more from them. And Coke has offered McDonald's some new options over the years. One of the things that Coke pointed to in their arsenal of innovation was these freestyle machines, which you might have seen if you've gone to a movie theater.

And a lot of hotels have them where you could mix all different kind of flavors together, you know, just punching buttons. And McDonald's did try it. McDonald's franchisees did test them in their restaurants, and they just did not perform in ways that they hoped. A lot of people found them cumbersome and expensive, so they didn't embrace it. McDonald's also tried offering bottled Coke brands, like Monster Energy and vitamin water. And then those bottled beverage tests, they also just didn't do as well. You know, it wasn't the same level of quality and freshness as those fountain beverages, and it was harder for people to know they were there. You know, when you're going through a drive-through, it's just not the same as knowing what's on the

fountains at McDonald's restaurants. Offering Coke products in new ways wasn't quite cutting it. So McDonald's tried something really different. McDonald's had a very short-lived restaurant concept called Cosmix, which is started in 2023, and this was going to be a new kind of spin-off concept that would be more oriented to these younger consumers looking for treats and snacks and drinks and pick-me-ups, particularly in the afternoon, which is what McDonald's is really trying to compete for. More afternoon customers, younger customers. At Cosmix, drinks were the star.

And not everything on the menu came from Coca-Cola. And so it offered, you know, some snacks and donuts, but what I was really geared towards is beverages. And so they had some frappets, they had a chur-chiller, popping boba drinks. And some of these drinks Coke was involved in, but others, they weren't. Eventually, McDonald's pulled a plug on Cosmix. But what worked was the drinks. They added six new options to regular McDonald's menus earlier this year. There was three refreshers that include freeze-dried fruit in them,

and then a sprite drink, a dirty Dr. Pepper, and then I believe it was a high sea drink. And these had cold foam in them, and you could customize the drinks to a limited degree. These last three are part of the dirty soda drink trend. So maybe for the uninitiated, what is a dirty soda? A dirty soda is essentially if you were to take a soda and put different syrups and juices and things in it.

So for instance, I had one recently that was like, I think it was Pepsi. Cratie, cream, and wild cherry. And McDonald's is doing that with different sodas, but namely Sprite. Heather tried some of them. So I went to the headquarters, and me and a lot of influencers were there to try these drinks. I met McDonald's global headquarters to taste refreshers, dirty sodas, and other cold beverages that the chain is rolling out to U.S. restaurant soon.

The drinks are, yeah, very brightly. They're very sweet. McDonald's just came out with some new fun drinks, so let's try them. Do you guys know that McDonald's came out with new refreshers? I like this better than Starbucks. I know. I know. The cold foam ones have a richness to them, and I think this is exactly what the company wants.

They want something that looks new and fresh and exciting and hope will trend on TikTok and social media. Beyond these new dirty sodas, McDonald's also has a whole new partnership in the works. A deal with Red Bull, which is not owned by Coke. Coke says it respects McDonald's decision. In August, we know through our reporting that they're going to start these Red Bull-infused drinks. They're going to have syrups in them and other mix-ins.

I do think when the Red Bull drinks come out, that will be a real splash. Because Red Bull is a big name. It has a lot of currency, including among younger consumers. And this is a real first. this brand partnering. So big deal for both of those companies. Instead of selling fast food with a drink on the side, with these new offerings,

McDonald's is flipping the script, focusing on selling drinks first. McDonald's would love to have new customers coming to their restaurants for these beverages, and they even served us what they believe customers will order with these drinks. So this is more for a snacking opportunity. So you get a drink, maybe you get McNuggets,

Maybe you get fries, maybe you get a cheeseburger, but you're not getting a whole big Mac meal with these drinks. And so they think this is going to encourage new customers, you know, coming in for these snacks and drinks, say, in the afternoon. But they also want to give their existing customers options. So do you think Ray Kroc would approve? Well, Ray Kroc's biggest motto was they want to be where customers are. If there is a big movement of customers towards something,

they want to offer it and they want to offer it, and they want to offer it bigger and better than anyone else. McDonald's says it's still deeply committed to its long-standing partnership with Coke, and that it's been central to their success. Coke has said the partnership remains, quote, fantastic, and they're still collaborating with McDonald's on some of the new drinks. Both say there's no trouble in paradise.

They're just evolving in a changing market. And what's interesting is Coke seems to recognize this, too. I was at the Restaurant Association trade show and spent a lot of time at the Coke booth trying new drinks that they were offering and there was a rainbow energy drink they were offering. They were, you know, had shakes, all kinds of TikTok-friendly pinks and oranges in their beverages.

They had Boba. So, and I think Coke, you know, in talking to them at that trade show, the executives there acknowledged that they need to be offering new options and try to do something for their customers, who are restaurant chains in part to keep people excited. That's all for today, Thursday, June 25th. The Journal is a co-production of Spotify

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