CEO Ramon Laguarta says affordability push, portfolio pruning and innovation are helping revive demand
Global food and beverage giant PepsiCo is beginning to see results from its recent price reduction strategy, with executives reporting improved performance following a series of cost-cutting and brand repositioning measures.
Speaking after the company’s first-quarter results, CEO Ramon Laguarta said PepsiCo’s focus on productivity and operational efficiency has enabled it to lower prices across key brands while maintaining margins. Over the past year, the company has shut facilities in multiple U.S. states and streamlined its portfolio, cutting nearly 20% of its product offerings.
These savings have been redirected toward making products more affordable. Earlier this year, PepsiCo reduced prices by up to 15% on major snack brands such as Doritos and Cheetos, aiming to bring price-sensitive consumers back into the category.
The move comes amid a challenging macroeconomic environment, where inflation-led price hikes had begun to dampen demand. Laguarta emphasized that while pricing is critical, growth will also depend on innovation, strong execution, and brand investment.
To that end, PepsiCo has been revamping its portfolio with “better-for-you” offerings. This includes launching snacks without artificial dyes, incorporating healthier oils like olive and avocado, and experimenting with functional ingredients such as protein and prebiotics. The company has also announced plans to remove artificial colours from leading Gatorade variants while repositioning the brand toward everyday hydration.
The strategy appears to be yielding early results. PepsiCo reported an 8.5% increase in quarterly revenue to $19.4 billion, while its North American food division—home to brands like Lay’s—posted a 2% rise in volume.
Industry peers, including General Mills and J.M. Smucker, have also introduced price cuts in recent months, signaling a broader shift toward affordability across the packaged food sector.
Analysts have largely welcomed PepsiCo’s moves. TD Cowen noted that its Frito-Lay business is regaining momentum through aggressive commercial strategies and expanded retail presence. However, some caution remains, with Morgan Stanley analysts expressing concerns over the segment’s long-term growth trajectory despite the near-term improvements.