PepsiCo is looking to "aggressively" cut costs for its business (and consumers) come 2026.
On Monday evening, the food and beverage titan revealed that its focus going into the new year is affordability and regaining its competitive edge in the marketplace, and it has a three-part plan in place to do so—some of which it has already acted on.
Looking ahead to 2026, the company suggested that bolstering its current lineup with "meaningful" initiatives to address growing consumer demand for "better for you" products would be a key part of its "innovation agenda." As would implementing a new value-oriented approach to make its offers more affordable. The final part would require it to downsize its operations and eliminate "nearly 20 percent" of its stock-keeping units (SKUs) in the U.S., which it has already begun doing.
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“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,” Ramon Laguarta, chairman and CEO of PepsiCo, shared in a Dec. 8 statement. “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.”
PepsiCo's plans to "aggressively reduce" its operating costs this year and "accelerate organic revenue growth, deliver record productivity savings and improve core operating margin" for next year started with shutting down three manufacturing plants and several manufacturing lines, according to the statement shared on Monday. The affected plants were reportedly located in California, Florida, and New York, though many reputable sources say additional layoffs are coming.
Now it's in the process of reviewing SKUs. Since we still don't have a clear picture of how those reductions could pan out, it's hard to say how this particular change may affect shoppers.
The simplest (and saddest) answer would be to completely discontinue certain items, but PepsiCo—the parent company of so many household names, including MUG Root Beer, Lay's, Mountain Dew, Rockstar Energy, Quaker, Rold Gold, SunChips, Miss Vickies, among many others—has not offered any guidance on which products it's looking to cut or whether it will affect entire brands, product lines, or just specific items within some collections.
A spokesperson for PepsiCo was not immediately available for comment.
"We appreciate our collaborative engagement with PepsiCo's management team and the urgency they have demonstrated," said Marc Steinberg, partner at PepsiCo shareholder Elliott Investment Management, who added that the team is confident in these updates. "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.
While the idea of jobs being lost and the disappearance of beloved food and beverage items is certainly one no one wants to face, only time will tell what possibilities may become difficult realities. That said, the idea is for Pepsi to pass along the savings to consumers at the store through lower prices (following a similar move by Target) and invest in new products that align with current snack trends, so going forward, hopefully, more positive updates will come.
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