PepsiCo makes swift move to avoid major boycott from consumers | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

PepsiCo (PEP) , which owns popular food and drink brands such as Pepsi, Lay’s, Gatorade, Tostitos, and more, decided earlier this year to scale back its diversity, equity, and inclusion program, as have many large companies nationwide.

In February, PepsiCo sent a memo informing employees that it is ending its DEI workforce representation goals and will transition its chief DEI officer to another role. It also said that it is replacing its five-year DEI strategy with an “Inclusion for Growth” strategy.

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In addition, PepsiCo said that it will widen its supplier base to include more opportunities for all small businesses to work for the company and will cease participating in single-demographic category surveys.

The change from PepsiCo came shortly after President Donald Trump issued an executive order on Jan. 21 dismantling the federal government’s DEI programs. In the executive order, he claimed that the programs enforce “illegal and immoral discrimination.”

PepsiCo responds to a major threat

In response to PepsiCo’s changes, the Rev. Al Sharpton sent a letter to PepsiCo CEO Ramon Laguarta on April 4, expressing his “profound disappointment” with the company’s cuts to DEI.

“You have walked away from equity,” said Sharpton in the letter.

Various brands of PepsiCo Inc. snack foods sit on display in a supermarket.

Image source&colon; Bloomberg/Getty Images

He also said that PepsiCo’s decision to remove DEI hiring and retention goals, and to break up community partnerships with minority-supporting organizations “are clear signals that political pressure has outweighed principle.”

Sharpton, who is president of the National Action Network, also threatened in the letter to lead a PepsiCo boycott.

In response to the letter, PepsiCo has decided to meet with Sharpton and several members of the National Action Network to discuss his concerns.

In a statement on social media platform X, Sharpton said that his meeting with Laguarta and PepsiCo North America CEO Steven Williams yielded a “constructive conversation.”

“This morning, I and several members of NAN met with PepsiCo Chairman Ramon Laguarta and CEO of PepsiCo North America Steven Williams for more than an hour to discuss our grievances over reports they were rolling back nearly $500 million in DEI commitments,” said Sharpton in the statement. “It was a constructive conversation, which PepsiCo agreed to hold within the 21 days we gave them to meet. We agreed to follow-up meetings within the next few days.”

He said that he and several other National Action Network members will make “a final determination and recommendation” on whether the organization will continue with its plans to lead a PepsiCo boycott.

PepsiCo recently spotted a dip in sales

PepsiCo’s swift action to avert a potential boycott comes after the company revealed that it recently saw a dip in its U.S. sales.

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In its fourth-quarter earnings report for 2024, PepsiCo flagged that its net revenue shrunk by 0.2% year-over-year as consumer demand for snacks and drinks fell in the U.S.

The company’s Frito Lay brand saw its volume (the number of units sold during a specific time period) in the U.S. decrease by 3% year-over-year, while Quaker Foods’ volume shrunk by 6% and PepsiCo beverages’ volume declined by 3%.

In prepared remarks in February, Laguarta and PepsiCo Chief Financial Officer Jamie Caulfield partially blamed the decrease in demand on “inflationary pressures and higher borrowing costs on consumer budgets” and “continued growth in away-from-home dining.”