Beverage and snack giant PepsiCo is set to overhaul its product portfolio, announcing plans to cut prices and streamline its offerings following pressure from activist investor Elliott Investment Management.
The New York-based conglomerate, known for brands such as Cheetos, Tostitos, and its extensive beverage range, intends to eliminate nearly 20 percent of its current product lines by early next year. This strategic move aims to free up capital for increased marketing investment and to deliver enhanced value to consumers, though specific products slated for removal and the extent of price reductions remain undisclosed.
Concurrently, PepsiCo is accelerating the launch of new items featuring simpler, more functional ingredients. Examples include Doritos Protein and the Simply NKD range of Cheetos and Doritos, which are free from artificial flavors or colors. The company also recently introduced a prebiotic version of its signature cola.
These significant changes come after Elliott Investment Management acquired a substantial $4 billion stake in PepsiCo last September. In a letter to the board, Elliott highlighted concerns over the company’s lack of strategic clarity, alongside decelerating growth and eroding profitability within its North American food and beverage divisions.
In a joint statement with PepsiCo Monday, Elliott Partner Marc Steinberg said the firm is confident that PepsiCo can create value for shareholders as it executes on its new plan.
“We appreciate our collaborative engagement with PepsiCo’s management team and the urgency they have demonstrated,” Steinberg said. “We believe the plan announced today to invest in affordability, accelerate innovation and aggressively reduce costs will drive greater revenue and profit growth.”
Elliott said it 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 percent and 4 percent in 2026. The company’s organic revenue rose 1.5 percent 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, with a focus on global leaders who can help it reach its growth and profitability goals.
“We feel encouraged about the actions and initiatives we are implementing with urgency to improve both marketplace and financial performance,” PepsiCo Chairman and CEO Ramon Laguarta said in a statement.
PepsiCo said in February that years of double-digit price increases and changing customer preferences have weakened demand for its drinks and snacks. In July, the company said it was trying to combat perceptions that its products are too expensive by expanding distribution of value brands like Chester’s and Santitas.
