Ahead of the Super Bowl, Frito-Lay, a subsidiary of PepsiCo, started cutting prices on its portfolio of chips products like Lay’s, Doritos, Cheetos, and Tostitos by 15% as consumers sought cheaper options. The quick pivot on chip prices comes after years of price increases that have cut the company’s market value by $50 billion since its highs in 2023.

“People shouldn’t have to choose between great taste and staying within their budget,” said PepsiCo U.S. Foods CEO Rachel Ferdinando in a statement ahead of the price decrease. 

In the beverage business, Pepsi’s products come in second to Coca-Cola, but thanks to the dominance of Frito-Lay, which owns nearly 60% of the U.S. salty snacks market, it has some pricing power that has helped make it PepsiCo’s moneymaker. In 2024, Frito-Lay made up about 27% of the company’s revenue. 

Yet this power combined with a pandemic-era push to accommodate higher supply-chain costs led to skyrocketing prices. In four years, the price of a 14.5 ounce “party size” Doritos bag at Walmart skyrocketed to $5.94 from $3.98 in 2021—nearly a 50% increase, Bloomberg reported, citing data from Attain, which tracks consumer spending metrics. Some chip prices also reportedly surpassed $7.

PepsiCo did not immediately respond to Fortune’s request for comment.

How a 50% Doritos price hike flew under the radar

At first, shoppers didn’t mind the price increases. Partly because of higher prices, Frito-Lay’s net revenue shot up 13% between 2020 and 2021, and another 9% between 2021 and 2022, according to filings with the Securities and Exchange Commission. These gains exceeded the company’s guiding mantra of “Frito-Lay Five Forever” by which the company grew its revenue by 5% each year for decades. 

“The Frito business is the jewel of PepsiCo,” PepsiCo CEO Ramon Laguarta said while talking up what he characterized as Frito-Lay’s great margins during an investor call at the height of the company’s success in 2023. “No matter what happens with the consumer, we’re going to be, I think, the preferred choice.”

The problem is Frito-Lay’s chip prices never went back down, despite Walmart reportedly pressuring the company to cut its prices and then cutting its shelf space, Bloomberg reported. Instead, the company implemented alternatives like cheaper multi-packs with fewer bags; new versions of snacks without artificial colors; and snacks with higher protein and fiber, the outlet reported.

When $7 Doritos became a dealbreaker

Still, starting in 2023, consumers started to reject the high prices. Frito-Lay’s revenue turned negative in 2024 for the first time in more than a decade of growth. Dragged down by the chips and snacks subsidiary, PepsiCo’s market value collapsed by $50 billion by late 2025 from its peak in 2023. The company’s stock has also fallen by nearly 22% from its May 2023 peak of $196. The stock was trading at $153 as of Tuesday afternoon.

Across the packaged food industry, companies raised prices aggressively during the pandemic as the phenomenon of “greedflation” took hold. Even before the Iran war began in March, three in four Americans said groceries were so expensive they were forced to cut costs elsewhere in their budgets to get by, according to point-of-sale company Toast. The Middle East conflict’s effect on the global supply chain has also threatened to increase Americans’ grocery bills. The increasing price of fertilizer, much of which flows through the Strait of Hormuz near Iran’s coast, could increase the price of corn, which is used for many products in the U.S.—including Frito-Lay brands like Doritos and Fritos.

Despite a hesitation to lower prices, in September, activist investor Elliott Investment Management helped bring a new sense of urgency to affordability at PepsiCo. The hedge fund bought a $4 billion stake in the company and demanded more affordable prices.

As part of an agreement with Elliott, the company announced in December it would cut the price of some salty snack prices by 15%. The company also said it would decrease the number of products it sells by 20%. 

Still, it’s unclear how effective the move will be and how the price cuts will be rolled out. A 14.5-ounce bag of Doritos on Walmart’s website was still listed at $5.94 as of Tuesday.

PepsiCo has continued to see a slow pace of growth in its North American food segment, which is partly owing to consumer affordability pressures, according to a note by Zacks investment research.

“The business is still navigating affordability concerns and competitive pressures in the market. To address this, PepsiCo is implementing sharper price points, expanding value offerings, and refreshing key brands, but the segment’s near-term growth trajectory remains somewhat constrained,” the note read.