The company has unveiled its plans and initiatives that aim to accelerate organic revenue growth, deliver record productivity savings and improve core operating margin
PepsiCo is preparing a review of its North America supply chain and would aggressively cut costs to drive growth after weeks of discussions with activist investor Elliott Investment Management, Reuters reported.
In September, Elliott disclosed a USD 4 billion stake in PepsiCo and pressed the company to take steps such as refranchising or spinning off its bottling operations, along with evaluating the sale of non-core assets in its food portfolio. Reuters reported that the company is also looking to slash costs by reducing around 20 per cent of its stock-keeping units (SKUs) in the United States by early next year.
“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. 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,” said Ramon Laguarta, Chairman and Chief Executive Officer (CEO) of PepsiCo.
The company stated that it expects full-year 2026 organic revenue growth to range between two and four per cent and expect to deliver the high end of that range during the second half of 2026. In addition, acquisitions net of divestitures that occurred in 2025 are expected to contribute one percentage point to reported net revenue growth in 2026.
In addition to the aggressive cost reduction actions being taken at PepsiCo Foods North America, the company also intend to advance and accelerate its global productivity initiatives through more automation, digitalisation and simplification initiatives. Improving the marketplace competitiveness and financial performance of PepsiCo Foods North America includes 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, the company said.
“We appreciate our collaborative engagement with PepsiCo’s management team and the urgency they have demonstrated. 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,” said Marc Steinberg, Partner at Elliott.
