PepsiCo to cut prices, eliminate products as part of a deal with an activist investor

Core Viewpoint - PepsiCo is implementing a strategic plan to cut prices and reduce its product offerings by nearly 20% in response to pressure from Elliott Investment Management, aiming to enhance marketing investments and consumer value [1][3]. Group 1: Strategic Changes - The company plans to eliminate approximately 20% of its product offerings by early next year to streamline its portfolio [1]. - PepsiCo intends to accelerate the introduction of new products with simpler and more functional ingredients, such as Doritos Protein and Simply NKD Cheetos and Doritos, which are free from artificial flavors or colors [2]. - The company is also reviewing its supply chain and making changes to its board to align with growth and profitability objectives [5]. Group 2: Financial Performance and Projections - PepsiCo's organic revenue is projected to grow between 2% and 4% by 2026, following a 1.5% increase in organic revenue during the first nine months of the current year [5]. - The company has acknowledged that years of double-digit price increases and shifting customer preferences have negatively impacted demand for its products [7]. Group 3: Investor Engagement - Elliott Investment Management, which acquired a $4 billion stake in PepsiCo, has expressed confidence in the company's ability to create shareholder value through the new strategic plan [3][4]. - The firm emphasized the importance of investing in affordability, accelerating innovation, and aggressively reducing costs to drive revenue and profit growth [4].