PepsiCo Bets On Price Investment To Revive Volumes

PepsiCo has outlined a set of commercial and financial priorities designed to “enhance shareholder value”, including a renewed focus on affordability in its North American foods business, portfolio simplification and an acceleration of productivity initiatives from 2026.

In a strategic update issued on December 8, the group said it is moving to “implement sharper everyday value” through what it described as “a targeted approach on affordable price tiers by brand and channel”, aimed at stimulating growth and improving purchase frequency for its mainstream brands.

The plan also includes an expanded innovation agenda focused on “permissible and functional offerings” that remove artificial colours and flavours, provide simpler ingredients, and add more protein, fibre and whole grains. PepsiCo cited recent introductions of Simply NKD Cheetos and Doritos, a “restaging” of Lay’s and Tostitos, and a planned 2026 launch of Doritos Protein.

On costs and operations, PepsiCo said it has already closed three manufacturing plants and shut several manufacturing lines in 2025, and that it is “in the process of reducing nearly 20 percent of SKUs in the U.S. by early next year”. The company said savings are intended to support “meaningful investments in advertising and marketing and consumer value”.

PepsiCo also said customers “have expressed enthusiasm and support” for its commercial plans, and it expects in-store points of presence to increase during the first half of 2026.

For fiscal 2026, PepsiCo projected organic revenue growth of between 2 percent and 4 percent, and said it expects to deliver the high end of that range in the second half of 2026. It also said acquisitions net of divestitures completed in 2025 are expected to add one percentage point to reported net revenue growth in 2026, with foreign exchange translation expected to contribute an additional one percentage point, implying reported net revenue growth of 4 percent to 6 percent.

The group said it aims to deliver a “record year of productivity savings” in 2026, and expects at least 100 basis points of core operating margin expansion in aggregate over the next three fiscal years. PepsiCo projected core EPS growth of approximately 5 percent to 7 percent in fiscal 2026, or approximately 7 percent to 9 percent excluding the impact of global minimum tax regulations.

The update follows what PepsiCo described as “constructive engagement” with shareholder Elliott Investment Management. Ramon Laguarta, PepsiCo’s chairman and chief executive, said the company is acting “with urgency” and highlighted PepsiCo Foods North America as central to achieving the growth and margin objectives. Elliott partner Marc Steinberg said the investor believes the plan to invest in affordability, accelerate innovation and reduce costs “will drive greater revenue and profit growth”, and added that Elliott welcomed PepsiCo’s commitment to board refreshment.

Separately, PepsiCo said it is reviewing its North America supply chain and go-to-market systems, and intends to provide a comprehensive update to analysts and investors in late 2026.