New investor prods PepsiCo to cut prices, eliminate some products

PepsiCo plans to cut prices and eliminate some of its products under a deal with a new $4 billion investor announced Monday.

The Purchase, New York-based company, which makes Cheetos, Tostitos and other Frito-Lay products as well as beverages, said it will cut nearly 20% of its product offerings by early next year. 

PepsiCo is making the changes after prodding from Elliott Investment Management, who took a $4 billion stake in the company in September. In a letter to PepsiCo’s board, Elliott said the company was being hurt by years of double-digit price increases. 

Elliott said changing customer preferences combined with a lack of strategic clarity and decelerating growth was eroding profitability in its North American food and beverage businesses.

PepsiCo said it also plans to accelerate the introduction of new offerings with simpler and more functional ingredients, including Doritos Protein and Simply NKD Cheetos and Doritos, which contain no artificial flavors or colors. 

The company also recently introduced a prebiotic version of its signature cola.

PepsiCo shares were flat in after-hours trading Monday.