PepsiCo to cut prices, eliminate products as part of a deal with an activist investor
PepsiCo plans to cut prices and eliminate some of its products as part of a deal with a company activist investor It was announced Monday.
The Purchase, New York-based company, which makes drinks along with Cheetos, Tostitos and other Frito-Lay products, said it will cut about 20% of its product offerings early next year. PepsiCo said it will use the savings to invest in marketing and increase value to consumers. It was not announced which products or by how much the price reduction will be made.
PepsiCo also said it plans to accelerate the introduction of new offerings with simpler, more functional ingredients, such as Doritos Protein and Simply NKD Cheetos and Doritos without artificial flavors or colors. The company also recently introduced a prebiotic version of its signature cola.
PepsiCo is making these changes at the urging of Elliott Investment Management, which bought a $4 billion stake in the company in September. In a letter to PepsiCo’s board of directors, Elliott said the company has suffered from a lack of strategic clarity, slowing growth and eroding profitability across its North American food and beverage businesses.
Elliott Partner Marc Steinberg said in a joint statement with PepsiCo on Monday that the firm is confident PepsiCo can create value for shareholders as it implements its new plan.
“We appreciate our collaboration with PepsiCo’s management team and their urgency,” Steinberg said. “We believe the plan announced today to invest in affordability, accelerate innovation and aggressively reduce costs will deliver further revenue and profit growth.”
Elliott said he plans to continue working closely with the company.
PepsiCo shares were flat in after-hours trading Monday.
PepsiCo said it expects organic revenue to grow between 2% and 4% in 2026. The company’s organic revenue increased by 1.5%. the first nine months of this year.
PepsiCo also said it plans to review its supply chain and continue to make changes to its board of directors, focusing on global leaders who can help it achieve growth and profitability goals.
“We feel encouraged by the actions and initiatives we are immediately implementing to improve both market and financial performance,” PepsiCo Chairman and CEO Ramon Laguarta said in a statement.
PepsiCo said in february Years of double-digit price increases and changing customer preferences have weakened demand for beverages and snacks. in julyThe company said it is trying to combat the perception that its products are too expensive by expanding distribution of value brands like Chester’s and Santitas.
