Doritos prices jumped 50% in four years and PepsiCo waited until it lost billions to do something

Key Points:

• Frito-Lay, PepsiCo’s salty snacks division, has cut chip prices by 15% ahead of the Super Bowl after years of price increases led to a $50 billion loss in market value since 2023, as consumers sought more affordable options.
• Despite initially strong revenue growth driven by higher prices during the pandemic, Frito-Lay’s sales declined in 2024, with consumers rejecting steep price hikes like a 50% increase in Doritos prices since 2021.
• Walmart pressured Frito-Lay to reduce prices and cut shelf space, prompting PepsiCo to introduce cheaper multi-packs and new snack variants instead of lowering prices directly, but these measures failed to prevent revenue declines.
• Activist investor Elliott Investment Management acquired a $4 billion stake in PepsiCo in 2023, pushing for more affordable pricing, which led to the December announcement of price cuts and a 20% reduction in product offerings.
• While PepsiCo is attempting to address affordability and competitive pressures through sharper price points and refreshed brands, growth in its North American food segment remains constrained amid ongoing consumer budget challenges.