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TheStreet Open House

Pepsi's Got a Lot to Give in Fast-Food Offerings

Stocks in this article: BKW BWLD KO MCD PEP YUM

NEW YORK (TheStreet) -- PepsiCo (PEP - Get Report) has been runner-up to Coca-Cola (KO) for quite some time. Pepsi trails Coke in retail-beverage sales and fountain-beverage sales in restaurants. However, Pepsi continues to see robust sales in its snack foods business and has found new ways to capture sales in restaurants.

Pepsi's North American foods unit continues to be a growth segment for a company that has suffered a dipping share of the beverage market and a decline in carbonated beverage sales. Taco Bell, which features Pepsi beverages in its restaurants, has had success with its Doritos taco brands. From March 2012 to August 2013, Taco Bell sold more than 600 million Doritos tacos. Since then, two additional flavors have been introduced, helping boost same-store sales for Taco Bell.

The latest Pepsi food launch was presented in a Super Bowl commercial for Subway. Pepsi's Frito-Lay brand got some extended exposure as a key ingredient in the Fritos Chicken Enchilada sandwich, available at Subway restaurants for a limited time. The sandwich features "big flavor with a lot of crunch" and is the latest example of Pepsi expanding its restaurant offerings with innovative menu items.

Coke is the fountain-beverage provider for Subway stores, but Pepsi has found a way inside the restaurants through food, which Coca-Cola simply can't offer.

The next chain to see a Pepsi food product may soon be Buffalo Wild Wings (BWLD). Beginning in January, Buffalo Wild Wings made the switch from Coca-Cola to Pepsi for beverages. The move was seen as a possible way to tap into Pepsi's strong partnership with the NFL. TheStreet's Brittany Umar has suggested that Buffalo Wild Wings might, like Taco Bell, use its deal to experiment with food offerings that feature Pepsi-branded items.

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