PepsiCo Gives in to Elliott Management With a New Financial Plan
PepsiCo Inc. today (Dec. 8) announced a plan “to enhance shareholder value,” largely a response to activist investor Elliott Management, which has been applying pressure since amassing a 2% or more stake in the beverage and snacks company.
There were no great revelations nor cataclysmic changes, and most of the review focused on PepsiCo Foods North America, which includes Frito-Lay, Quaker and other non-beverage products.
There was an emphasis throughout on creating “everyday value,” apparently for consumers, and the announcement noted, “We have closed three manufacturing plants and shut several manufacturing lines this year and are in the process of reducing nearly 20 percent of SKUs in the U.S. by early next year.” It also said PepsiCo would look for new board members “with a focus on global leaders.”
The announcement followed a comprehensive review of PepsiCo’s strategic initiatives and plans, all overseen by its board of directors, and included a more optimistic preliminary 2026 financial outlook.
“Today, we are announcing our plans and initiatives that aim to accelerate organic revenue growth, deliver record productivity savings and improve core operating margin – starting in 2026,” said Ramon Laguarta, chairman and CEO. “PepsiCo Foods North America will play a critical role towards achieving these targets and we feel encouraged about the actions and initiatives we are implementing with urgency to improve both marketplace and financial performance.”
The announcement noted the moves “incorporate constructive engagement [from] and is supported by PepsiCo shareholder Elliott Investment Management.”
It was revealed in September that Elliott Management had taken a $4 billion stake – about 2% of all PEP stock – saying PepsiCo is underperforming, particularly against rival Coca-Cola.
“Accelerating organic revenue growth and improving core operating margin expansion are critical to enhancing long-term shareholder value,” said today’s announcement. “To achieve these objectives, we are acting with a high sense of urgency to improve the marketplace competitiveness and financial performance of PepsiCo Foods North America by:
* Implementing sharper everyday value through a targeted approach on affordable price tiers by brand and channel, aimed at stimulating growth and improving the purchase frequency of our mainstream brands.
* Elevating an expansive innovation agenda, with permissible and functional offerings that remove artificial colors and flavors, provide simpler ingredients, and include more protein, fiber and whole grains. This includes the recent introduction of Simply NKD Cheetos and Doritos, the restaging of Lay’s and Tostitos and the 2026 launch of Doritos Protein.
* Aggressively reducing operating costs and improving operational excellence with savings generated to support meaningful investments in advertising and marketing and consumer value [and noted the three plant closings and reduction of SKUs].
“As a result, we expect full-year 2026 organic revenue growth to range between 2 and 4 percent and expect to deliver the high end of that range during the second half of 2026.
“In addition to the aggressive cost reduction actions being taken at PepsiCo Foods North America, we also intend to advance and accelerate our global productivity initiatives through more automation, digitalization and simplification initiatives. We aim to deliver a record year of productivity savings in 2026, benefiting in part from the actions taken in the second half of 2025.
“With these savings and ongoing efforts to operate more efficiently, we expect PepsiCo to deliver at least 100 basis points of core operating margin expansion in aggregate over the next three fiscal years,” it concluded.
“We appreciate our collaborative engagement with PepsiCo’s management team and the urgency they have demonstrated,” said Marc Steinberg, a partner at Elliott. “We believe the plan announced today to invest in affordability, accelerate innovation and aggressively reduce costs will drive greater revenue and profit growth.
“In addition, we welcome the comprehensive review of PepsiCo’s North America supply chain and go-to-market systems, as well as PepsiCo’s commitment to board refreshment,” Steinberg continued. “We are confident that PepsiCo will create substantial value for shareholders as it executes on this plan, and we look forward to continued engagement with the company.”
About the Author
Dave Fusaro
Editor in Chief
Dave Fusaro has served as editor in chief of Food Processing magazine since 2003. Dave has 30 years experience in food & beverage industry journalism and has won several national ASBPE writing awards for his Food Processing stories. Dave has been interviewed on CNN, quoted in national newspapers and he authored a 200-page market research report on the milk industry. Formerly an award-winning newspaper reporter who specialized in business writing, he holds a BA in journalism from Marquette University. Prior to joining Food Processing, Dave was Editor-In-Chief of Dairy Foods and was Managing Editor of Prepared Foods.