PepsiCo cuts snacks and drink prices to recapture cost-conscious consumers
Key takeaways
- PepsiCo cut prices by up to 15% on major snack and drink brands to appeal to cost-conscious consumers.
- The move follows consumer pushback and a shift toward cheaper private-label alternatives.
- Despite strong Q4 revenue growth, PepsiCo is responding to declining volumes and affordability concerns.
Snacks and soft drinks giant PepsiCo has cut prices by 15% for certain brands, including Doritos, Lay’s and Cheetos, in response to growing consumer complaints about high prices.
Making the announcement ahead of the largest sporting event in the US this Sunday, the 2026 Super Bowl LX, the company says it will slash prices as early as this week, with some lower-priced products featuring a label advertising the price drop.
The cuts are intended to boost sales volumes and strengthen competitive positioning. They come after PepsiCo agreed with activist investor Elliott Investment Management to cut its US product lineup by 20% and reduce prices on core brands, formalizing a broader restructuring.
As part of the strategy, the company also plans to reduce its workforce across US and Canadian operations, ramp up automation and digitization, and invest savings into lowering prices on core brands.
PepsiCo has already revealed plans to close Frito-Lay plants in Florida, California, and New York as part of this cost-cutting restructuring.
Swapping out brands
PepsiCo’s price reductions come after many consumers turned away from premium brands toward cheaper alternatives, such as retail and store brands.
The company had previously increased prices to cover rising packaging, ingredients, and transportation costs.
Ongoing consumer pressure is reflected in North American beverage volumes falling and weak global snack volumes. In the fourth quarter, PepsiCo increased prices by 4.5% globally, with beverage prices rising by 7% in North America, while some snacks grew by 1%.
Meanwhile, PepsiCo reported higher-than-expected revenue of approximately US$29.3 billion in Q4 2025, a 5.6% year-over-year increase.
Addressing affordability challenges
Responding to the weakened demand for its drinks and snacks, the company released a statement yesterday saying, “PepsiCo is taking a meaningful step to lower the price on many of our most loved snacks by up to nearly 15%... the new suggested retail prices begin rolling out in the US this week. And because retailers ultimately set their retail prices, shoppers may see even greater savings depending on the store.”
PepsiCo stresses that retailers determine their own retail prices, so in‑store prices vary.
“We’ve spent the past year listening closely to consumers, and they’ve told us they’re feeling the strain,” says Rachel Ferdinando, CEO at PepsiCo Foods US.
“Lowering the suggested retail price reflects our commitment to help reduce the pressure where we can, because people shouldn’t have to choose between great taste and staying within their budget.”
