PepsiCo (PEP) drops 1.61% amid Elliott push for strategic overhaul and soda market challenges

PepsiCo (PEP) fell 1.61% on Monday, marking its third consecutive day of declines with a cumulative drop of 2.40%. The stock hit a fresh low since August 2025, with an intraday slide of 2.18%, reflecting heightened investor uncertainty amid a challenging strategic environment.

Activist investor Elliott Management has intensified scrutiny on PepsiCo, holding a $4 billion stake and pushing for a strategic overhaul. The firm has criticized the company’s fragmented brand portfolio and waning dominance in the soda market, proposing measures such as refranchising its bottler network—a tactic used by Coca-Cola to boost efficiency. These demands highlight growing pressure on management to prioritize profitability amid shifting consumer trends.

PepsiCo’s beverage division faces mounting challenges as Dr Pepper recently surpassed the company to become the second-largest soda brand in the U.S. This shift is attributed to Dr Pepper’s aggressive marketing, including college football campaigns and innovative flavors. Meanwhile, PepsiCo’s struggles to retain market share underscore broader difficulties in adapting to evolving preferences for health-conscious and premium offerings.

Snack division performance has also deteriorated, with Frito-Lay’s growth stalling amid inflation-driven cost-conscious consumer behavior and the impact of GLP-1 drugs that suppress appetite. These factors have forced PepsiCo to reevaluate pricing and product strategies to remain competitive in a market prioritizing affordability and wellness.

Regulatory and consumer demands for reformulated products add further complexity. Calls to eliminate artificial additives and flavors could require costly adjustments, potentially affecting product appeal. These pressures compound existing operational challenges, testing the company’s ability to balance innovation with cost efficiency.

With a 15% decline over the past year, PepsiCo’s stock reflects investor skepticism about its strategic direction. Upcoming earnings guidance and leadership decisions will be critical in determining whether the company can address these headwinds. The broader food and beverage sector’s consolidation, including rivals’ restructuring efforts, underscores the urgency for PepsiCo to adapt swiftly to maintain relevance in a rapidly evolving market.