PepsiCo Knoxville Plant Closure: Overview
- PepsiCo has closed its Knoxville bottling plant, affecting 112 workers.
- The move comes as North American beverage volumes fell 2%.
- CEO Ramon Laguarta says improving soft drinks performance is a key priority.
- PepsiCo is increasing focus on brands including Pepsi, Mountain Dew, Gatorade and Poppi.
- The closure aligns with wider efforts to cut costs and improve efficiency.
PepsiCo has closed its bottling plant in Knoxville, Tennessee, as the beverage giant looks toas the beverage giant looks to improve the financial performance of its North American soft drinks business.
The facility produced a range of PepsiCo beverages, although the company has not disclosed whether production will be transferred to another site.
Local sales and delivery teams will continue to serve customers in the Knoxville area, PepsiCo said in a statement.
The company described the closure as a “difficult” decision, adding that its immediate priority was supporting affected employees through the transition.
According to a notice filed with the state of Tennessee, the closure affects 112 workers across manufacturing, maintenance and warehouse operations.
PepsiCo said affected employees would receive a paid notice period through January 1 2027, including continued pay and benefits, as well as access to employment and transition resources. The company is also working to place employees at nearby facilities.
North American beverage performance
The closure comes as PepsiCo faces continued pressure to improve its North American beverage business.
In its latest quarterly results, the company reported a 2% decline in North American beverage volumes. Chief executive Ramon Laguarta has acknowledged that PepsiCo is not satisfied with its soft drinks performance, as it seeks to strengthen the competitiveness of its portfolio.
The company has been pursuing a wider turnaround strategy focused on improving growth, controlling costs and increasing productivity across its operations.
“We’re putting all the urgency of the business and the focus on improving our performance in soft drinks,” Laguarta said. “We’re cutting costs in many areas.”
PepsiCo’s cost-cutting efforts have involved closures of several bottling facilities in recent years. In October 2024, the company announced plans to end bottling operations at sites in Atlanta, Chicago, Cincinnati and Harrisburg, Pennsylvania, a move that affected nearly 400 workers, according to the Associated Press.
PepsiCo has not publicly confirmed the reason for the Knoxville closure or whether it is directly connected to its wider cost-cutting initiatives.
Refocusing on core brands
Alongside efforts to reduce costs, PepsiCo is looking to sharpen its focus on brands and beverage categories it sees as key to future growth.
Laguarta has outlined plans to strengthen investment behind its core Pepsi and Mountain Dew brands, while also targeting growth in categories such as sports drinks, energy drinks and prebiotic soda.
These include Gatorade and Propel in hydration, Alani in energy drinks and Poppi, the prebiotic soda brand PepsiCo acquired in 2025.
The strategy reflects PepsiCo’s efforts to improve the performance of its North American beverage business through a combination of cost control, more targeted investment and a stronger focus on consumer demand.
