PepsiCo plans to lower prices and phase out some products under a deal with activist investors announced Monday.
The New York-based company, which makes Cheetos, Tostitos and other Frito-Lay products as well as beverages, said it will cut nearly 20% of its product offerings early next year. PepsiCo said it would use the savings to invest in marketing and improving consumer value. It did not reveal which products would be reduced in price or by how much.
PepsiCo said it also plans to accelerate the launch of new products with simpler ingredients and more powerful functions, including Doritos Protein and Simply NKD Cheetos and Doritos, which contain no artificial flavors or colors. The company also recently launched a prebiotic version of its iconic cola.
PepsiCo made the changes at the urging of Elliott Investment Management, which acquired a $4 billion stake in the company in September. Elliott said in a letter to PepsiCo’s board that the company was hurt by a lack of strategic clarity, slower growth and declining profitability in its North American food and beverage business.
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 executes its new plan.
“We appreciate our partnership with PepsiCo’s management team and the sense of urgency they have demonstrated,” Steinberg said. “We believe the plans announced today to invest in affordability, accelerate innovation and aggressively reduce costs will drive greater growth in revenue and profits.”
Elliott said it plans to continue working closely with the company.
PepsiCo shares were unchanged in after-hours trading Monday.
PepsiCo said it expects organic revenue to grow 2% to 4% in 2026. The company’s organic revenue grew 1.5%. 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 its growth and profitability goals.
“We are encouraged by the actions and initiatives we have implemented with urgency to improve our market 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 changes in customer preferences have weakened demand for its drinks and snacks. In July, the company said it was trying to counter the perception that its products were too expensive by expanding distribution of value brands such as Chester’s and Santitas.
