Grocery store shelves are brimming with familiar snacks today, but by mid-2026, nearly one in five products from PepsiCo’s vast lineup will disappear, reshaping aisles nationwide.
PepsiCo confirmed its largest product reduction in modern history, cutting almost 20% of its offerings amid declining sales and consumer backlash. This overhaul responds to pressure from activist investor Elliott Investment Management, which acquired a $4 billion stake in September 2024.
The Catalyst from Wall Street
Elliott’s involvement marked a turning point. Partner Marc Steinberg criticized PepsiCo for strategic confusion, stalled growth, and profit erosion in North America. On December 9, 2024, the company announced major changes: price reductions, product cuts, factory closures, and board refreshes. These steps align directly with Elliott’s demands, including a review of the North American supply chain and the appointment of new directors focused on global growth.
Years of Missteps Exposed
PepsiCo’s troubles stemmed from aggressive pricing. The company imposed double-digit increases year after year, assuming demand for brands like Pepsi, Lay’s, and Frito-Lay would hold. Instead, organic revenue growth fell to 1.5% over the nine months leading up to early 2025, the slowest pace in recent years. Pepsi-Cola dropped to fourth in market share, trailing Coke, Dr Pepper, and Sprite. Consumers, squeezed by costs, shifted to cheaper options or skipped snacks entirely.
In February 2025, PepsiCo acknowledged that its pricing strategy had eroded demand. By July, it expanded value-oriented brands like Chester’s and Santitas to counter perceptions of its products as unaffordable luxuries.
The Product Shakeout Begins
Details on specific cuts remain undisclosed, but the scope is vast. PepsiCo maintains thousands of stock-keeping units (SKUs) across its Frito-Lay, Gatorade, Quaker, and Tropicana brands, as well as various beverages, which vary by size, flavor, and packaging. Analysts project hundreds or thousands of niche flavors, limited editions, and regional items will go, prioritizing simplicity.
Three factories closed in 2025, with more production lines idled. The company plans to accelerate automation, digitize its supply chain, and achieve record productivity savings in 2026. These efficiencies come at a cost: job reductions in the U.S. and Canada as operations are streamlined.
Affordability Takes Center Stage
Starting in 2026, PepsiCo will deliver sharper everyday value and enhanced affordability on core brands. Specific reductions were not detailed, but the company assured noticeable improvements on shelves. This echoes moves by retailers like Target, which rolled back prices on 3,000 grocery items amid widespread household budget strains.
New products emphasize simple, functional ingredients, such as Doritos Protein, prebiotic Pepsi-Cola, and the Simply NKD line of Cheetos and Doritos, which are free from artificial flavors and colors. These launches aim to address past complaints about over-processing while rebuilding consumer trust.
Outlook and Industry Ripples
PepsiCo forecasts 2% to 4% organic revenue growth in 2026, targeting the upper end only in the second half—modest compared to past dominance and barely outpacing inflation. Elliott expressed satisfaction with the urgency but signaled ongoing oversight.
The changes signal broader shifts in packaged goods. Rivals like Mondelez and Coca-Cola, which relied on pricing for growth, now face similar consumer resistance. Grocery aisles are expected to offer fewer choices and tighter assortments by summer 2026, balancing value demands with lingering costs for premium items. Retail analysts note the challenge: shoppers crave affordability yet resist reduced variety.
For families, the human impact lingers—fewer familiar options for budgeted purchases, job losses from closures, and a delayed corporate response to years of price sensitivity. PepsiCo’s success hinges on proving it can restore loyalty; failure could invite intensified investor pressure, including board battles or portfolio sales. The overhaul tests whether the snack giant can adapt to an era where every dollar counts, potentially setting the pace for the industry’s pivot to volume over margins.
Sources:
PepsiCo Announces Priorities to Enhance Shareholder Value and Provides Preliminary 2026 Financial Outlook — PepsiCo press release
PepsiCo to cut prices, eliminate products as part of a deal with an activist investor — AP News
PepsiCo Will Cut Prices And Drop 20% Of Its Products In U.S. — Forbes
PepsiCo to cut prices, eliminate products as part of a deal with an activist investor — ABC News (syndicated AP)