PepsiCo (NASDAQ:PEP) executives used the company’s presentation at the Consumer Analyst Group of New York (CAGNY) conference to outline a multi-pronged effort to “play offense” and return to its long-term growth algorithm, emphasizing portfolio changes, stepped-up productivity, and expansion in away-from-home channels.
Management frames a push to accelerate growth
Chairman and CEO Ramon Laguarta said PepsiCo is focusing on two priorities to accelerate net revenue growth: transforming its portfolio through innovation and “restaging” key brands, and building its away-from-home business to reach more locations and occasions. He paired that with a “multi-year acceleration” of productivity designed to create flexibility to invest while also expanding margins.
Restaging major brands and targeting health and functionality
Laguarta said consumer trends including health and wellness, functionality, growing cultural diversity, omnichannel shopping, and increasing consumption outside the home are shaping PepsiCo’s strategy. He said PepsiCo began restaging large brands with Pepsi two years ago—updating packaging and emphasizing non-sugar offerings—and called the effort “extremely successful.”
For 2026, he said PepsiCo is restaging four major brands globally—Lay’s, Tostitos, Gatorade, and Quaker—representing more than $15 billion in total company sales. The initiatives include changes to product messaging and formulations focused on “no artificials,” different cooking methods, and added functionality:
- Lay’s and Tostitos: Emphasis on “simple ingredients,” removing artificial colors and flavors, and introducing alternative oils such as olive and avocado oil. For Tostitos, Laguarta said the company will lean into messaging around how it produces and cooks masa.
- Gatorade: Laguarta said PepsiCo plans to broaden Gatorade beyond sports into everyday hydration needs using “the science of sport,” with solutions in liquids and powders and added functionality. He linked the opportunity to consumer dehydration throughout the day.
- Quaker: A relaunch planned for the second half of the year, positioned around gut health, heart health, energy, and weight management, leveraging Quaker’s trust and nutritional profile.
He also said PepsiCo is pushing reduced sodium offerings, expanding zero sugar, participating in low-sugar segments through brands including Poppi and Pepsi Prebiotic, and launching a Gatorade product with no artificial ingredients and lower sugar. Laguarta added that PepsiCo intends to eliminate artificial colors and flavors across its brands by the end of 2027.
On portion control, Laguarta said 70% of PepsiCo’s U.S. food units are already in single-serve formats, a shift he said occurred over just a few years, and that the company will continue to expand multipacks and portioned options.
Fiber, hydration, protein, and energy highlighted as multi-year opportunities
Laguarta described energy, protein, fiber, and hydration as key growth areas with higher value per consumption. He cited participation in energy through brands including CELSIUS and Alani, and described protein-focused launches including a relaunch of Muscle Milk (including coffee-and-protein offerings) and Doritos protein planned for spring. He also pointed to Propel powders that combine fiber and protein.
Fiber and hydration were positioned as two trends PepsiCo intends to capture “at scale.” Laguarta called fiber the “number one deficiency” in diets and said PepsiCo plans to innovate in fiber and whole grains across its food portfolio. On hydration, he said PepsiCo aims to extend sports science into “everyday” hydration needs, including consumer education on hydration.
Away-from-home expansion and new formats
Laguarta said PepsiCo is less developed in away-from-home than in retail and in-home channels, and sees an opportunity as consumers spend more calories outside the home and seek convenient meal solutions. He described near-term efforts to increase availability in more outlets through expanded field execution and technology.
He also discussed two areas where PepsiCo is testing “more elevated experiences” with higher willingness to pay: crafted beverages and mini-meals. He highlighted “DRIPS by Pepsi,” described as a menu-driven concept combining indulgent and functional options, and said the company expects more scaling this year. On food, he described “Doritos Loaded,” a customizable mini-meal concept combining Doritos with protein and vegetables, supported by multiple go-to-market models including brand experiences (such as food trucks), direct-to-consumer tests, delivery partnerships using restaurant capacity in select European cities, and interest in “store within a store” setups.
Productivity, capital allocation, and long-term targets
Executive Vice President and CFO Steve Schmitt pointed to momentum in 2025 results, saying PepsiCo improved from roughly negative growth in Q1 to more than 5.5% in Q4, with organic growth rising from about 1% early in the year to over 2% by year-end. He said acquisitions and foreign exchange also contributed to net revenue growth in Q4. Schmitt added that core operating margin improved by more than 100 basis points in the quarter and EPS grew double digits, attributing the flow-through in part to productivity that he said should provide tailwinds into 2026.
On capital allocation, Schmitt reiterated priorities to invest in the business, maintain a “meaningful and growing” dividend, selectively pursue acquisitions/partnerships and divestitures, and conduct share purchases. He said capital spending averaged about 6% of net revenue from 2019 through 2024, was a little under 5% last year, and that management views under 5% as a “pretty good place to be” for 2026 and the near future.
Schmitt outlined a 2027 free cash flow conversion goal of over 90%, supported by tighter working capital management and moderated capital spending. He also noted that 2026 includes the company’s last nearly $1 billion payment related to the Tax Cuts and Jobs Act, which would not recur in 2027. He also highlighted PepsiCo’s dividend increase of 4%, marking the 54th consecutive year of dividend increases.
Looking longer term, Schmitt said PepsiCo expects mid-single-digit organic revenue growth, aims to improve operating margin at least 100 basis points over the next three years, and believes that combination supports high single-digit EPS growth. He noted that 2026 guidance is not expected to reach those levels for the full year, but management expects to build momentum through the year.
In Q&A, Laguarta said PepsiCo continues to see efficiency and growth opportunities in combining foods and beverages in North America, calling warehousing a “high return opportunity” and describing tests of integrated delivery and selling as more channel- and density-dependent. He also said PepsiCo could pursue a “mosaic of solutions” that might include more integrated supply chains in some areas and potential refranchising in others where partners are aligned and integration returns are less attractive.
Addressing North America Foods price reinvestments, Laguarta said key performance indicators include volume share gains and increased brand penetration, and reiterated expectations that Frito should grow volume, net revenue, and profits this year, supported by productivity.
About PepsiCo (NASDAQ:PEP)
PepsiCo, Inc (NASDAQ: PEP) is a multinational food and beverage company headquartered in Purchase, New York. The company develops, manufactures, markets and sells a broad portfolio of branded food and beverage products, including carbonated and noncarbonated soft drinks, bottled water, sports drinks, juices, ready-to-drink teas and coffees, salty snacks, cereals, and other convenient foods. Its leading consumer brands include Pepsi, Mountain Dew, Gatorade, Tropicana, Quaker, Lay’s, Doritos and Cheetos, among others.
Formed through the 1965 merger of Pepsi-Cola and Frito-Lay, PepsiCo has grown into a global business with integrated manufacturing, distribution and marketing operations.
