Activist investor Elliott Investment Management is taking a $4 billion stake in PepsiCo, saying there's an opportunity to revive the snack and drinks company.

Years of double-digit price increases from PepsiCo and changing customer preferences has weakened demand for its drinks and snacks, the company said in February. In July PepsiCo said that it is trying to combat perceptions that its products are too expensive by expanding distribution of value brands like Chester's and Santitas.

Stubborn inflation has had an impact on consumer behavior and many people have cut back on the discretionary purchases that they make.

PepsiCo lowered its full-year earnings expectations in April, citing increased costs from tariffs and a pullback in consumer spending. The company reaffirmed that guidance three months later. Its tariff costs have risen since then. In June, the Trump administration hiked the tariff on imported aluminum from 25% to 50%.

In a letter to PepsiCo's board, Elliott said that the company is being hurt by a lack of strategic clarity, decelerating growth and eroding profitability in its North American food and beverage businesses. But the firm still believes in PepsiCo's potential, particularly noting its growing international business.

"While unfortunate, this disappointing trajectory has created a historic opportunity: With the right mindset and an appropriately ambitious turnaround plan, PepsiCo today represents a rare chance to revitalize a leading global enterprise and unlock significant shareholder value," Elliott said.

Shares of PepsiCo climbed 2% Tuesday. The stock is down nearly 10% over the past 12 months, according to FactSet, but it is up almost 12% over the past month as Elliott has purchased shares.

Elliott said that it wants to work with PepsiCo's board and management on ways to improve performance.

"Elliott's goals at PepsiCo are straightforward: help the company sharpen focus, drive innovation, become more efficient and unlock the value that its leading brands, unmatched scale and world-class employees deserve," it said. "The path back to winning is clear and achievable."

PepsiCo will review Elliott's recommendations.

"PepsiCo maintains an active and productive dialogue with our shareholders and values constructive input on delivering long-term shareholder value," it said in a statement Tuesday.