PepsiCo Slashes Prices on Chips, Eyes Healthier Options/ Newslooks/ WASHINGTON/ J. Mansour/ morning Edition/ PepsiCo will reduce prices on popular snacks like Lay’s and Doritos after demand slipped due to inflation-driven hikes. The company also plans to introduce healthier product lines to attract younger, cost-conscious consumers. CEO Ramon Laguarta says affordability is now a top priority.
PepsiCo Price Cuts Quick Looks
- PepsiCo will lower prices on Lay’s, Doritos, Cheetos, and Tostitos in 2026.
- CEO Ramon Laguarta says affordability is now a major friction point for consumers.
- Price hikes boosted Q4 revenue but led to falling snack and beverage volumes.
- North American beverage volume dropped 4%; snack volume fell 1%.
- PepsiCo earned $2.26 per share in Q4, beating Wall Street estimates.
- Company testing showed that price reductions helped boost sales volume.
- Plans include trimming 20% of product offerings per deal with Elliott Investment.
- PepsiCo will expand health-conscious lines: Gatorade Lower Sugar, Simply NKD snacks.
- Lay’s chips made with avocado and olive oils will debut soon.
- Functional products like Pepsi Prebiotic and Doritos Protein sold out rapidly.
- Shares rose 2.5% Tuesday following earnings and strategic announcements.
Deep Look: PepsiCo to Cut Snack Prices as Consumers Demand Affordability
PURCHASE, NY (AP) — In response to waning demand driven by years of price hikes, PepsiCo announced plans to cut prices on its core snack products, including Lay’s, Doritos, Cheetos, and Tostitos, in an effort to win back price-sensitive customers.
Speaking to investors Tuesday, Chairman and CEO Ramon Laguarta acknowledged that affordability has become a major concern for consumers, particularly those in low- and middle-income households. “The biggest friction they have today in our category… is affordability,” Laguarta said during a conference call. “We have been testing multiple ways to give them affordability.”
The shift marks a strategic pivot after PepsiCo relied heavily on price increases to offset rising costs in packaging, ingredients, and logistics. In the fourth quarter alone, the company raised global prices by 4.5%, with a 7% increase in beverage prices in North America and a 1% uptick in snacks.
Despite the price hikes, revenue climbed 5.6% in the October–December quarter to $29.3 billion, exceeding analyst expectations. However, the gains came at a cost: volume slipped as customers sought cheaper alternatives or cut back entirely. Snack volume dropped 1%, while North American beverage volume fell 4%.
Globally, PepsiCo reported a 1% increase in beverage volume but a 2% decline in food volume.
Rebuilding Demand Through Pricing and Simplification
PepsiCo began testing lower prices in selected markets during the second half of 2025. According to Laguarta, early results were positive. “Volume return is pretty good,” he said, suggesting the move is necessary to stabilize growth.
In addition to price cuts, the company plans to streamline its product portfolio, cutting nearly 20% of existing offerings. This initiative is part of a broader strategy negotiated with Elliott Investment Management, which acquired a $4 billion stake in PepsiCo in September and has pushed for changes to improve performance in North America.
Shifting Toward Simpler, Healthier Products
PepsiCo is also adapting to evolving consumer preferences by rolling out products with simpler and healthier ingredients. Among them are:
- Gatorade Lower Sugar
- Simply NKD Cheetos and Doritos (no artificial colors or flavors)
- Lay’s chips made with avocado oil and olive oil
Laguarta emphasized that younger households enjoy PepsiCo’s products but increasingly seek clean-label ingredients and fewer additives.
The company is also capitalizing on growing demand for functional snacks and beverages. Products like Doritos Protein and Pepsi Prebiotic have already proven successful — the latter sold out within 30 hours of its Black Friday debut and is set to launch nationwide in 2026.
Financial Performance and Outlook
PepsiCo’s Q4 adjusted earnings reached $2.26 per share, well ahead of analyst expectations. Net income totaled $2.54 billion, up from $1.52 billion a year earlier.
The announcement of price reductions, product innovations, and strategic restructuring was well received by investors. PepsiCo shares rose 2.5% in Tuesday morning trading.
As 2026 unfolds, PepsiCo’s challenge will be maintaining profitability while balancing affordability, health trends, and product innovation — all under the watchful eye of activist investors and shifting consumer expectations.
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