PepsiCo is preparing for one of its largest shake-ups in years, announcing plans to pull hundreds of products from U.S. shelves by early 2026 after months of pressure from an activist investor demanding a leaner, more efficient company.
According to FOX Business, the food and beverage giant — known for household names such as Doritos, Gatorade, Cheetos, Fritos and Aquafina — confirmed Monday it will eliminate nearly 20% of its U.S. SKUs, trimming down sizes, flavors and packaging variations across its lineup.
Entire brands won’t disappear, but the sprawling catalog of options consumers see on store shelves will shrink.
The update follows a broader internal restructuring that has already seen PepsiCo close three manufacturing facilities and shut down multiple production lines this year.
The company said the goal is to reduce complexity, cut costs and make room for products that meet shifting customer preferences. It also plans to introduce more affordable price points to boost “purchase frequency of our mainstream brands,” while accelerating launches of items made with more protein, fiber, whole grains and without artificial colors or flavors.
These sweeping moves come as part of PepsiCo’s negotiations with Elliott Investment Management, which revealed a massive $4 billion stake in the company in September. Elliott blasted PepsiCo for underperforming, noting the company has been trading near decade-low valuation levels and trailing key competitor Coca-Cola in sales.
In a letter to PepsiCo, Elliott urged executives to consider selling or outsourcing the company’s expensive bottling operations — a strategy Coca-Cola already uses. It also pressed PepsiCo to slash unnecessary beverage variations, streamline its food business by lowering costs to match current sales trends and sell off underperforming or non-essential units.
Elliott partner Marc Steinberg praised PepsiCo’s early steps, saying the company has shown “urgency” in tackling the issues.
“We appreciate our collaborative engagement with PepsiCo’s management team and the urgency they have demonstrated,” Steinberg said. He expressed confidence that the mix of lower costs, simplified product lines and new pricing strategies “will drive greater revenue and profit growth,” adding that the firm expects “substantial value for shareholders.”
PepsiCo CEO Ramon Laguarta echoed the optimism. He said the reshaped business will allow PepsiCo to accelerate organic revenue growth, unlock record productivity savings and expand operating margins beginning in 2026.
For next year, PepsiCo expects its core business sales to grow between 2% and 4%, aiming for the higher end of that range in the second half of 2026. The company also anticipates that acquisitions and divestitures completed in 2025 will help fuel that growth.
By tightening operations and redirecting savings, PepsiCo projects its profit margins will climb by at least one percentage point over the next three years — a target it says is achievable with its new, slimmed-down structure.
