PepsiCo Reportedly Moves To Overhaul North American Supply Chain To Strike Peace With Activist Elliott

• A formal announcement on the moves could come as early as this week, the report said.
• PepsiCo is also expected to emphasize efforts to develop new products and ways for pricing and packaging them.
• The Wall Street Journal reported last week that the company is nearing a settlement with Elliott.

PepsiCo Inc. reportedly plans to review its North American supply chain as it seeks to negotiate with activist investor Elliott Investment Management.

As per a report from Bloomberg, the review of the supply chain is among a number of steps the company is taking to reach a settlement with Elliott who built a nearly $4 billion stake in the beverages and snack company in September and pushed it to make changes amid a drop in share price.

A formal announcement on the moves could come as early as this week, the report said, citing people familiar with the matter.

Other Changes  

PepsiCo is also expected to emphasize efforts to develop new products and ways for pricing and packaging them, as well as changes to capital allocation, sources told Bloomberg. The company, however, is not expected to make any board changes, the report said. Elliott is supportive of the changes being planned by the beverage maker, it added.

Elliottt was pushing the company to refranchise its bottling business and make other changes including divesting its underperforming assets in the food and beverage business, such as Life and Cap’n Crunch, as well as Quaker Oats and Rice-A-Roni. PepsiCo uses independent bottlers in addition to its own bottling businesses.

The Wall Street Journal reported last week that the company is nearing a settlement with Elliott.

Company Commits To Portfolio Transformation

After the announcement of Elliott’s stake, PepsiCo CEO Ramon Laguarta said in October that the company is eyeing the introduction of a “strong pipeline of innovation to accelerate portfolio transformation” and boost growth while also providing “good value to consumers.” The CEO also added that the company’s engagement with Elliott has been “constructive and collaborative.”

In October, PepsiCo also named Walmart (WMT) executive Steve Schmitt as its new Chief Financial Officer, succeeding Jamie Caulfield.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around PEP stayed within the ‘bullish’ territory over the past 24 hours, while message volume stayed at ‘high’ levels.

PEP stock has dropped 9% over the past 12 months.

Also See: NextEra And Exxon Mobil Team Up On Massive Gas-Powered AI Energy Push

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