Elliott Pushes For Overhaul At PepsiCo After Falling Behind Rivals

PepsiCo

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(RTTNews) - PepsiCo is facing intensifying pressure after activist investor Elliott Management disclosed a $4 billion stake in the company, calling for sweeping changes to revive growth.

The move comes as the soft drink maker slips further behind Coca-Cola and even Dr Pepper in the U.S. soda market, sparking concerns over its long-term competitiveness.

In a letter to PepsiCo's board, Elliott warned that the company has reached "a critical inflection point" and urged leadership to streamline operations, shed underperforming brands, and consider refranchising its bottling network, a strategy that Coca-Cola has successfully pursued.

The firm argued PepsiCo's struggles are "self-inflicted," citing both its declining beverage sales and recent stumbles at Frito-Lay, once a reliable growth engine.

Elliott believes its proposals could unlock at least 50 percent upside for PepsiCo's stock, which has fallen 15 percent over the past year. Shares briefly surged more than 5 percent Tuesday following news of Elliott's involvement, before settling about 2.4 percent higher.

PepsiCo said it "maintains an active and productive dialogue with shareholders" and will review Elliott's recommendations within the framework of its current strategy, which includes cost cuts, plant closures, and efforts to improve marketing efficiency.

The showdown highlights broader turbulence in the food and beverage industry, where inflation, shifting consumer preferences, and the rise of weight-loss drugs have pressured sales.

With competitors such as Dr Pepper gaining ground through aggressive marketing and novel flavors, Elliott is betting that bold restructuring could restore PepsiCo's standing as a global leader.