By: Kaylie Mc Noor

Pepsi Co announced plans this week to overhaul two of its flagship snack brands – Lay’s and Tostitos – with a renewed emphasis on transparency and clean-label ingredients, a shift driven in part by mounting public health advocacy and evolving consumer preferences. As reported by Reuters, the company intends to highlight the absence of artificial colors and flavors in its reformulated chips when they return to the market later this year.

The move aligns with a broader push led by Health Secretary Robert F. Kennedy Jr., who has been urging Americans to adopt diets centered on “whole foods.” According to the information provided in the Reuters report, Kennedy’s platform, bolstered by the Make America Healthy Again (MAHA) social movement, has called on food manufacturers to eliminate synthetic dyes and other artificial ingredients from their products.

Speaking during a call with investors, Pepsi Co CEO Ramon Laguarta framed the initiative as a strategic attempt to reinforce the “real food perception” of Lay’s. “If you think about the simplest and most natural snack, it is a potato chip; it’s a potato, it’s oil, and it’s a little bit of salt – the most simple, no artificial ingredients,” Laguarta remarked, according to the Reuters report.

The company’s shift reflects a growing trend among major U.S. food manufacturers, which, as Reuters has observed, are responding to both regulatory scrutiny and consumer demand for simpler, more transparent ingredient lists. Pepsi Co’s plan also involves a significant change in the types of oils it uses for its snack brands. As detailed in the Reuters report, the company will increasingly incorporate avocado and olive oils across its product lines, moving away from canola and soybean oils – a move that aligns with the MAHA movement’s critiques of commonly used industrial oils and their purported health risks.

Pepsi Co had already introduced a range of snacks under its “Simply” brand extension, offering Lay’s and Doritos products made without artificial colors or flavors. Yet, as the Reuters report noted, consumer response to the Simply line has been relatively modest. “The Simply line extension for existing chip brands is still in early innings – consumers have not engaged so far,” Christian Greiner, senior portfolio manager at F/m Investments, told Reuters. “It will be seen how consumers react to a rebranding of Lay’s and Tostitos over the next couple of quarters.”

The reformulation strategy also forms part of Pepsi Co’s broader shift toward offering natural color options across its portfolio. In April, as Reuters previously reported, the company disclosed plans to either remove synthetic dyes from all its products or provide consumers with alternatives free from such additives. This is particularly significant for product lines like Cheetos and Gatorade, which traditionally rely on vibrant synthetic colors.

Beyond the snack aisle, Pepsi Co is also reevaluating its beverage formulations. According to the report at Reuters, the company confirmed on Thursday that it is prepared to offer beverages sweetened with sugar rather than high-fructose corn syrup, provided there is consumer demand. The move follows a statement by President Donald Trump earlier this week, cited by Reuters, in which he announced that Coca-Cola would begin using cane sugar in its U.S. beverages – a decision reportedly influenced by Kennedy’s MAHA movement and its dietary preferences.

Both Pepsi and Coca-Cola have historically relied on high-fructose corn syrup in their American markets, primarily for cost efficiency. The shift toward cane sugar represents a potential pivot in response to health advocacy and consumer sentiment. However, as Reuters noted, this transition occurs amid a challenging economic climate, with packaged food companies like Pepsi Co contending with more cautious consumer spending.

Since the onset of the COVID-19 pandemic, Pepsi Co, like many industry peers, raised prices to protect profit margins against rising costs. With inflationary pressures squeezing household budgets, Pepsi Co has responded by offering smaller package sizes and more affordable options in its snack categories. However, industry analysts remain circumspect about consumer willingness to absorb higher prices for premium, “cleaner” products.

“While there is clearly demand for cleaner ingredients in food and beverage products, it remains to be seen if consumers will be willing to pay up for these more premium products, especially in today’s inflationary environment and more price-sensitive consumer base,” Arun Sundaram, an analyst at CFRA Research, told Reuters.

In addition to its focus on natural ingredients, Pepsi Co announced plans to expand into the liquid protein market, signaling its intent to capitalize on the growing popularity of protein shakes and functional nutrition. As reported by Reuters, Laguarta confirmed that the company will introduce protein-infused offerings under its existing brands, including the Pop Corners popcorn line and various Quaker snack products.

The move into the protein segment reflects a broader diversification strategy for Pepsi Co as it seeks to align its product portfolio with health and wellness trends. According to the information contained in the Reuters report, this initiative is expected to position the company within a market segment that has demonstrated significant growth potential, especially among health-conscious consumers seeking convenient nutrition options.

As Pepsi Co navigates these strategic shifts, the company remains mindful of balancing innovation with economic realities. The challenge, as framed in the Reuters report, is whether Pepsi Co can successfully reposition its leading snack and beverage brands in a way that resonates with modern consumers without alienating its existing customer base or pricing itself out of a competitive market.

With its Lay’s and Tostitos relaunch on the horizon, Pepsi Co’s next steps will be closely watched by industry observers and investors alike. As the Reuters report emphasized, the success of these initiatives may hinge on how effectively the company can communicate its commitment to natural ingredients and wellness while maintaining its market leadership in a highly competitive and cost-conscious environment.

For now, Pepsi Co’s willingness to adapt its recipes and product offerings signals a recognition of shifting consumer priorities – a movement that Reuters has chronicled as gaining momentum across the U.S. food and beverage industry. Whether this strategy will yield the desired commercial outcomes remains a critical question as the company ventures further into an era of ingredient transparency and health-focused branding.