PepsiCo cuts products, lowers prices after pressure from activist investor

Core Viewpoint - PepsiCo is eliminating hundreds of products from its shelves as part of a strategy to cut costs and streamline its product lineup, following discussions with activist investor Elliott Investment Management [1][4]. Group 1: Product Reduction and Strategy - The company plans to reduce nearly 20% of its SKUs (stock keeping units) sold in the U.S. by early 2026, having already closed three manufacturing plants and shut down some manufacturing lines this year [2]. - PepsiCo aims to offer more affordable price options to stimulate growth and improve the purchase frequency of its mainstream brands, while also focusing on launching products that meet consumer needs, such as those made without artificial colors and flavors [3]. Group 2: Investor Engagement and Recommendations - Elliott Investment Management, which holds a $4 billion stake in PepsiCo, has urged the company to consider selling or outsourcing its complex bottling operations and to cut back on unnecessary drink variations to streamline operations [4][6]. - The investor believes that these measures will help boost profits, streamline operations, and free up capital for reinvestment in the company's strongest areas [7]. Group 3: Financial Outlook - PepsiCo expects sales from its core business to grow between 2% and 4% for all of 2026, with an anticipation to hit the higher end of that range in the second half of the year [13]. - The company also expects its profit margins to grow by at least one percentage point over the next three years due to cost savings and improved operational efficiency [15].