Core Viewpoint - PepsiCo, Inc. is viewed as a "defensive" investment amid a U.S. economic slowdown, although its defensive nature is less pronounced than in previous recessions due to high pricing pressures in its Frito-Lay segment [1] Financial Performance - The company is expected to report third-quarter 2025 financial results on October 9, 2025, with an estimated EPS of $2.26 [3] - The analyst has adjusted the organic sales outlook for the IB franchise from a growth of 3% year-over-year to flat, resulting in a total company organic sales forecast reduction from 2% to 1.8% for the third quarter [4] Sales and Market Trends - PepsiCo Foods North America is experiencing sluggish sales as it compares against last summer's promotions, with NielsenIQ data showing little change in sales from previous quarters [5] - Frito-Lay is facing challenging comparisons due to prior July 4 promotions, while premium brands are performing well, contrasting with significant declines in midprice staples like Lay's, Tostitos, and Doritos [6] Stock Performance - As of the latest update, PepsiCo shares are trading at $140.20, reflecting a slight increase of 0.20% [7]

Group 1 - The Dividend Kings achieved a gain of 3.26% in August, outperforming the SPDR S&P 500 ETF Trust (SPY) by 1.21% [1] - In September, SPY has increased by 2.9% [1]

Core Viewpoint - Elliott Management has urged PepsiCo to follow Coca-Cola's lead in divesting its bottling operations, which are crucial to the beverage business [2][3] Group 1: Historical Context of Bottling Operations - The bottling business emerged as a solution to early distribution challenges faced by Coca-Cola, which initially sold only syrup to local soda fountains [4] - By 1919, Coca-Cola's bottling network had expanded to 1,200 plants, significantly increasing syrup revenue [4] - PepsiCo adopted a similar bottling strategy, inspired by Coca-Cola's model, to facilitate its own growth [4] Group 2: Advantages of the Bottling Model - The bottling model allows beverage companies to avoid heavy capital investments in manufacturing and logistics, as these responsibilities are managed by bottlers [5] - Local bottlers can leverage regional resources and market knowledge, accelerating product distribution [5][6] Group 3: International Expansion and Partnerships - Both Coca-Cola and PepsiCo replicated their bottling strategies internationally, forming partnerships with local bottlers to enhance market penetration [6][7] - Coca-Cola's return to China involved collaborations with local firms like COFCO and Swire, while Pepsi initially attempted to maintain full control over its bottling operations [7] Group 4: Tensions Between Companies and Bottlers - There exists a tension between beverage companies and bottlers regarding pricing strategies, as companies prefer a "low-margin, high-volume" approach while bottlers seek higher prices to improve their margins [8] - New product launches often create friction, as bottlers face additional costs for production line adjustments and marketing efforts [8] Group 5: Market Dynamics and Competitive Strategies - The rise of large retail chains like Walmart has shifted the dynamics, with PepsiCo gaining an advantage by negotiating directly with retailers, while Coca-Cola had to reform its bottling network to maintain competitiveness [9][10] - Coca-Cola has restructured its bottling network by acquiring stakes in bottlers and supporting larger regional bottlers, while PepsiCo continues to maintain direct control over its bottling operations [10]

Group 1 - PepsiCo, Inc. (NASDAQ:PEP) is currently trading at $141, showing signs of bottoming out after a decline from $196 two and a half years ago [2] - The company has a 4% yield, which is attracting investors looking for a safe return [1][2] - Elliott Management has taken a significant $4 billion stake in PepsiCo, indicating potential for change and improvement within the company [2] Group 2 - PepsiCo manufactures and distributes a diverse range of products, including beverages, snacks, cereals, dairy, and ready-to-drink items [2] - Despite its current challenges, PepsiCo is still considered a premier growth company, making it a viable option for a diversified portfolio [2]

Core Viewpoint - Elliott Investment Management is advocating for PepsiCo to cut costs and divest low-growth brands, gaining support from some investors, but its call for PepsiCo to emulate Coca-Cola's bottling business split has received less backing [1][2] Group 1: Cost-Cutting and Brand Divestment - Elliott Investment Management is pushing for PepsiCo to reduce costs and divest low-growth brands, a proposal that has garnered support from other investors [1] - The hedge fund has previously disclosed a $4 billion stake in PepsiCo and released a 75-page report detailing suggestions to enhance the company's profitability [2] Group 2: Bottling Business Strategy - Elliott argues that the integrated operating model of PepsiCo North America (PBNA) has been surpassed by Coca-Cola's franchised bottlers, leading to weaknesses in price-pack management, slower regional innovation, and poor in-store execution [1] - The hedge fund suggests that introducing third-party bottlers would create a checks-and-balances mechanism for brand portfolio management [1] - Coca-Cola has successfully completed a global bottling business split, resulting in the formation of independent bottling entities such as Coca-Cola Enterprises, Coca-Cola Europacific Partners, and Coca-Cola FEMSA [1]

The deadline to submit a claim in Poppi soda’s $8.9 million class-action lawsuit is quickly approaching. Most Read from Fast Company Qualifying customers have until this Friday, September 26, to file a claim in the class-action lawsuit against Poppi’s former owner, Vngr Beverage LLC. The suit alleges that the low-sugar, prebiotic soda was “improperly marketed” and labeled as “gut healthy,” a claim that is not scientifically backed, leading customers to purchase products they would not have otherwise. ...

Core Points - The Poppi soda class-action lawsuit involves a claim of improper marketing and labeling against VNGR Beverage, LLC, the former owner of Poppi, alleging that the product was marketed as "gut healthy" without scientific backing [3][4] - The lawsuit has a settlement amount of $8.9 million, with a deadline for eligible customers to file claims by September 26, 2025 [2][6] - PepsiCo, Inc. acquired Poppi for $1.95 billion in May 2023, which adds a significant context to the lawsuit and its implications for the beverage industry [4] Settlement Details - Customers who purchased Poppi beverages between January 23, 2020, and July 18, 2025, are eligible for settlement payments [6] - Settlement payments without proof of purchase can be up to $16 per household, while payments with proof of purchase vary based on the quantity purchased [8][11] - The final approval hearing for the settlement is scheduled for November 20, 2025, and payments will be distributed within 90 days after the settlement is finalized [9]

Core Viewpoint - Some investors in PepsiCo are in favor of activist shareholder Elliott Investment Management's suggestions to cut costs and eliminate underperforming brands like Quaker, but they express caution regarding the proposal to separate the soda maker's bottling network [1] Group 1 - Activist shareholder Elliott Investment Management has proposed cost-cutting measures for PepsiCo [1] - There is support among some investors for the idea of eliminating sleepy brands such as Quaker [1] - Investors are more cautious about the suggestion to hive off PepsiCo's bottling network [1]

Core Viewpoint - Some investors in PepsiCo support Elliott Investment Management's suggestions to cut costs and eliminate underperforming brands, but are cautious about the proposal to separate the bottling network [1][5]. Group 1: Elliott's Proposal - Elliott Investment Management has proposed that PepsiCo should consider spinning off its bottling business to increase margins and simplify operations, similar to a move made by Coca-Cola nearly a decade ago [2][4]. - Elliott has taken a $4 billion stake in PepsiCo and released a report outlining strategies to boost profits, as the company's share price has fallen nearly 20% over the past year, underperforming the S&P consumer staples index [3]. Group 2: Financial Performance - PepsiCo's operating margins were reported at 14% last year, an increase from 13.1% in 2023, while Coca-Cola's margins were significantly higher at 21.2% and 24.7% for the same periods [6][7]. - The North American beverage business of PepsiCo has operating margins trailing Coca-Cola's by as much as 10 percentage points, which could potentially be recovered through refranchising [6]. Group 3: Investor Sentiment - Some long-term investors express concerns that separating the bottling business could be costly and time-consuming, potentially impacting PepsiCo's margins and earnings negatively during the transition [5]. - Ongoing discussions between Elliott and PepsiCo indicate that the company is reviewing the proposals while maintaining an active dialogue with shareholders [6].

Core Viewpoint - The article discusses the lack of positions held by Parkev Tatevosian, CFA, and The Motley Fool in the mentioned stocks, emphasizing their disclosure policy and potential compensation for promoting services [1] Group 1 - Parkev Tatevosian has no position in any of the stocks mentioned [1] - The Motley Fool also has no position in any of the stocks mentioned [1] - The disclosure policy of The Motley Fool is highlighted, indicating transparency in their operations [1]