As part of a significant cost-cutting review, PepsiCo is streamlining its product offerings by nearly 20% in response to a slowdown in consumer spending and pressure from an activist investor.
“We are optimistic about the initiatives we are implementing to enhance both marketplace and financial performance,” said Ramon Laguarta, Chairman and CEO of PepsiCo.
PepsiCo has faced challenges in North America due to changing consumer preferences for healthier products and better value. The company has experienced slower growth and declining margins in food, as well as market share losses in beverages. To address these issues, PepsiCo is revamping its portfolio with healthier options such as dye-free Cheetos and Doritos, snacks with more protein and fiber, and a prebiotic version of its cola.
The company is reportedly planning layoffs in North America as part of its cost-cutting measures, following the closure of two Frito-Lay facilities in Florida and the termination of 500 positions. PepsiCo has been in discussions with activist investor Elliott Investment Management, who has advocated for changes at the company.
According to Marc Steinberg from Elliott, the announced plan to invest in affordability, innovation, and cost reduction is expected to drive revenue and profit growth. PepsiCo projects organic revenue growth of 2% to 4% in 2026, aiming to achieve the higher end of that range in the second half of the year.
Analyst Robert Moskow noted that Elliott’s involvement has spurred PepsiCo to execute its strategy more urgently, although the company’s growth plans remain consistent overall.