After a Good but Mixed 2025, PepsiCo Cutting Prices

The sales and profits were pretty good, but the big news from PepsiCo’s full-year financial report – at least for general consumption – was talk of price cuts. Some news source said snack prices would be lowered by up to 15%, although company officials would not confirm that in a conference call.

That aside for a moment, sales were a hair shy of $94 billion, up 2.3% from 2024. Net income was $8.295 billion, a hair down from 2024’s record $9.626 billion – a tough act to follow. Volume declines in North America offset any overseas unit gains.

Foods North America volume was down 1%, Beverages North America fell 4%. Foods in Europe, Middle East & Africa and Latin America also saw volume declines. The only segment to see a volume increase was Asia Pacific Foods, up 4%.

The solution: price cuts. “We have … implemented sharper affordability initiatives at PepsiCo Foods North America to improve competitiveness and the purchase frequency of our brands,” said Chairman and CEO Ramon Laguarta in explaining the results to financial analysts. “Productivity savings will help fund these commercial plans in fiscal 2026.

“Following extensive consumer feedback around affordability limitations and subsequent market tests on sharper price points during the second half of 2025, we have begun offering greater affordability on certain packages of iconic brands, such as Lay’s, Tostitos, Doritos and Cheetos. These initiatives aim to improve the purchase frequency of our brands with consumers.”

But when pressed by a financial analyst if at least some of the cuts were 15%, as reported, Laguarta dodged. We couldn’t quite trace that figure back to its source, although several media reported the 15% figure without saying where it came from.

Laguarta also said the company is “continuing to refresh the existing portfolio and introducing a strong pipeline of innovative products. Specifically, we are restaging four global brands – Lay’s, Tostitos, Gatorade and Quaker – focusing on quality preference, refreshed visuals and marketing and simpler ingredients.

“We are also introducing an expansive slate of innovation with emerging and functional offerings – with a focus on hydration, whole grains, fewer artificial ingredients, protein and fiber.”

PepsiCo, like other food & beverage processors, has raised prices several times in recent years, first due to the Covid-19 pandemic and in the past two years due to increased ingredient costs.

Some of the company’s plans for 2026 also result from the influence of Elliott Management Investment, which took a $4 billion stake in the company last year and pressured the company to reduce its product portfolio and make key brands more affordable.