PepsiCo is rolling out major changes to stay ahead of mounting pressures ranging from inflation and new regulations to the rise of GLP-1 drugs and consumers’ growing appetite for healthier options.
In its Q4 earnings call on Tuesday, the food and beverage giant announced price cuts of up to 15% on some of its most well-known brands, including Lay’s, Cheetos and Tostitos.
PepsiCo said the price cuts will roll out this week in time for the Super Bowl, which for many viewers is just as much about the food as the football game.
The move is among a wide range of changes the company is making this year, including broadening its better-for-you product portfolio, eliminating about one-fifth of SKUs and introducing portion‑controlled formats to make its snacks and beverages more accessible to value‑ and health‑conscious shoppers.
PepsiCo Chairman and CEO Ramon Laguarta called the price cuts a “surgical investment” where the company sees the “biggest friction” on price.
PepsiCo reimagined
The price cuts follow prominent activist investor Elliott Investment Management’s purchase of $4 billion in PepsiCo stock in September, a position that made the hedge fund one of PepsiCo’s largest investors.
The hedge fund has criticized the company’s performance and entered PepsiCo with a range of proposed reforms, such as expanding categories with the greatest potential for growth, increasing marketing spending on those brands, acquiring high-performing adjacent brands and divesting non-core and underperforming food assets, among others.
In early 2025, PepsiCo reported its fifth quarter of back-to-back volume losses, which included a 3% quarterly volume decline in Frito-Lay North America. That prompted PepsiCo to “right-size” the brand, according to Laguarta, which involved closing manufacturing plants in California, Florida and New York and laying off some 7,000 workers.
On Tuesday, PepsiCo beat consensus earnings expectations by 0.44%, reporting $2.26 per share on revenue of $29.34 billion, according to Earnings Whispers.
Laguarta said the price cuts were funded in part by the right-sizing at Frito-Lay. The company expects Frito-Lay to grow volume, net revenue and operating margin in 2026. He said the brand overhauls will continue across PepsiCo over the course of the year.
“We’re starting the year with Lay’s and Tostitos – those are multibillion-dollar brands for us,” he said. “And then later in the year, we’re going to have big relaunches of Gatorade and Quaker Oats – two big, big brands, obviously, for us that are more on the sweet spot of growth of the categories.”
International holds steady
PepsiCo’s rollercoaster ride with its North American business is buttressed by its steadier international business.
Markets outside of the US have seen mid-single-digit growth for the last 19 consecutive quarters, Laguarta said. “We’re seeing good performance in some of our larger markets,” he added, highlighting growth in China, South Africa and the Middle East.
“Internationally, we’re seeing different parts of the world behaving differently, but we’re optimistic about Mexico,” he said.
Western Europe’s market was weaker and Brazil was neutral for PepsiCo, Laguarta said, adding that the company’s “acceleration comes mostly from our North America businesses.”
Acceleration at PepsiCo
Acquisitions drove much of PepsiCo’s acceleration in 2025, according to Laguarta.
Key deals PepsiCo has struck over the last year include the purchase of better-for-you Mexican-American snack company Siete Foods in January 2025 for $1.2 billion and prebiotic soda company Poppi in March for $300 million.
“We’re committed to transforming our portfolio to include more positive choices that meet consumer demand for convenient and delicious products,” Steven Williams, former CEO of PepsiCo North America, said in 2025. “We love the Siete brand for the same reason so many loyal consumers do and are dedicated to preserving its special attributes while making the brand more widely available and accessible on a broader scale.”
PepsiCo also restructured its energy drink strategy in 2025 with the expansion of its distribution partnership with Celsius Holdings. The deal involved PepsiCo purchasing $585 million in Celsius Holdings, increasing its ownership stake in the energy drink company to 11%.
The returns on those and other investments are expected to begin paying off over the next five months, according to PepsiCo.
“Those acquisitions are in high-growth segments of the category – that’s why we did it,” he said. “They’ve been integrated very well into our distribution systems, and we’re getting additional return on those brands, so they’ll continue to grow, and there will be an acceleration of the portfolio in the second half [of 2026].”
PepsiCo also is expanding its better-for-you options with its flagship Pepsi brand, launching Pepsi Prebiotic Cola in July. The drink contains half the sugar and calories of a 12-ounce can of Coca-Cola’s Simply Pop Prebiotic soda.
Innovation and GLP-1
Laguarta said the company is optimistic about the opportunities posed by the rise of GLP-1 drugs, noting, “There are more opportunities than threats, but there are both.”
PepsiCo is experimenting with portion control strategies and innovations in functional foods and beverages, he said.
“If you think about our portfolio in the US, 70% plus of our food business is already in single-serve, right? So, we’re investing in single-serve capacity,” he said.
He added that the relaunch of Quaker Oats will include products that prioritize fiber and whole grains.
On demand: Healthy snacking trends
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