PepsiCo president: We misconstrued consumer needs

04-Sep-2013 - Last updated on 05-Sep-2013 at 10:14 GMT

Whether it's that late night indulgence, mid-morning snack or mixed breakfast occasion - every consumer has different needs across the day, PepsiCo says

Related tags Consumer theory

A better understanding on how consumers think, eat and drink has enabled improved, targeted innovation for Frito-Lay, the president of PepsiCo says.

Speaking at the 2013 Barclay’s Back to School Conference, Zein Abdalla told attendees that through its Frito-Lay North America business PepsiCo has taken "literally millions" of consumption occasions and drivers to create a map detailing how consumers make decisions about what to buy against different demand spaces.

This demand space, he said, is defined by who the consumer is and what target group they fit into and the occasion when they are making the decision and consumption of the product.

“What this has allowed us to do is to make sure that our innovation is synergistic so that we don’t get overlap either in terms of our brand or the innovation we drive; that the innovation is very fully targeted against what are those biggest opportunities by consumer demand space – what we call unmet needs that exist in the marketplace today.”

All consumers have different needs based across different parts on the day, Abdalla said. The breadth of consumer needs is extensive, he said, with physiological to emotional needs and nourishment to treat needs.

“Sometimes we misconstrued this as a ‘nutrition consumer’ and a ‘treat and reward’ consumer – there is no such thing,” he added.

Nutrition tailwinds and salty hopes

Within the snacks category, Abdalla said nutrition will continue to be a real driver for PepsiCo but not the only one.

“Clearly the good-for-you end of the spectrum has tailwinds rather than headwinds – tailwinds from both a regulatory point of view as well as from a consumer point of view, and we see that as a growth opportunity going forward.”

However the PepsiCo president said beyond this, the salty snacks sector holds the most promise – particularly when it comes to tapping into new occasions and demand spaces.

“Global snacks where we really compete today largely across salty or in salty snacks has tremendous opportunity to source occasions – those demand space occasions from adjacencies… So salty has a significant growth opportunity for us.”

As a result of its mapping, PepsiCo has been able to identify and tap into eating occasions and demand spaces with its products, whether it be the mixed breakfast occasion, early evening indulgence reward or mid-morning snack, Abdalla said.

All quotes used have been sourced from Seeking Alpha.