Elliott Investment Management is gaining traction with other PepsiCo (NASDAQ:PEP) investors regarding its push for the food and beverage company to cut costs and wean low-growth brands, according to Reuters. However, sources indicate that Elliott’s push for PepsiCo (NASDAQ:PEP) to spin off its bottling business similar to how Coca-Cola (NYSE:KO) did has less support at the moment.
In a presentation to PepsiCo (NASDAQ:PEP) shareholders, Elliott Management said bottler repurchase was logical at one time, but the time has come to evaluate a more effective franchised structure. “PBNA’s integrated structure has been outexecuted at the local level by refranchised Coke bottlers, leading to weaker price-pack management, slower regional innovation and poorer in-store execution,” warned the hedge fund. A third-party bottler structure is seen as creating checks and balances around portfolio management.
Coca-Cola spun off bottling operations across the globe to create Coca-Cola Enterprises, Coca-Cola Europacific Partners (CCEP), and Coca-Cola FEMSA (KOF).
Earlier in September, Elliott unveiled a $4 billion stake in PepsiCo (PEP) and released the 75-page report with ideas on how to boost profit at the company. PepsiCo (PEP) said it maintains an active dialogue with shareholders and that it will review Elliott’s presentation.