Prodded by Activist Investor, Changes Coming to PepsiCo

PepsiCo is slimming down its snack lineup and its costs to placate its powerful new shareholder. The maker of Pepsi, Lay's, and Doritos struck a deal with activist investor Elliott Investment Management that will see it cut expenses across its food and beverage operations, reduce the number of individual products it sells in the US by about 20%, and lower prices on some food items starting next year. CEO Ramon Laguarta framed the move as a response to consumer strain, saying there is "a big reset of affordability" as buyers in the US and other Western markets pull back.

Geekspin flags separate issues: a consumer shift toward "healthier, better-value choices" and a weakening beverage market share, with Pepsi now in fourth place behind Coke, Dr Pepper, and Sprite. It adds that the company is leaning into "better-for-you innovations" in a bid to win those health-conscious consumers with offerings like artificial dye-free Cheetos and Doritos and planned higher protein snacks. Bloomberg notes that in calling for changes, Elliott cited a too-complex brand portfolio and that slimmed-down slice of the beverage business.

The agreement, which the Wall Street Journal reports does not give Elliott a seat on PepsiCo's board, heads off what could have been a protracted and pricey fight with one of Wall Street's most aggressive activist firms. Elliott disclosed its roughly $4 billion stake in PepsiCo in September, making it one of PepsiCo's largest shareholders, and has been in talks with the company since. PepsiCo on Monday also forecast organic revenue growth of 2% to 4% in 2026.