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Frito-Lay CEO: We went very, very deep on snack occasions

'We went deep on how people snack when they’re alone, when they’re with others,' says Frito-Lay CEO.
'We went deep on how people snack when they’re alone, when they’re with others,' says Frito-Lay CEO.

Frito-Lay has looked deeply into consumer snacking occasions to get a better understanding on how to sway business, its CEO says.

Frito-Lay North America CEO Tom Greco said the company had been focused on understanding business “through the lens of the consumer” for the past two years, with a new focus on demand spaces.

Speaking to analysts at the CAGNY conference in New York on Thursday 20, Greco said the aim was to thoroughly understand the drivers behind snacking.

“We went deep on how people snack when they’re alone, when they’re with others. We better understood how health and wellness impacted decisions on snacking. The foundational insight here was that drivers of needs differ based on the context of the occasion,” he said.

Demand spaces drive everything

Frito-Lay had identified an array of snacking demand spaces, the business unit CEO explained. “These demand spaces inform everything we do; our innovation agenda, our brand building, our media plans and how we execute in the marketplace.”

Frito-Lay tapped into the ‘enjoy and indulge’ demand space, he said, with its Lay’s ‘Do Us A Flavor’ competition – asking consumers to develop flavor ideas for the potato chip snack – and captured the 'party occasion' with Tostitos Cantina – tortilla chips with matching branded salsas.

The snack major tackled the 'away-from-home' snacking occasion with its Doritos-Taco Bell tie-up, he said, a partnership that was thanks to PepsiCo's beverage relationship with the quick-serve restaurant chain. Frito-Lay had also targeted the 'fun break time' snacking occasion with Rold Gold pretzel thins, packaged to target on-the-go, he said.

Snacks is an attractive category

Greco said that Frito-Lay has gained, and will continue to gain, momentum in the US market. For its full year 2013 results, Frito-Lay posted a 4% rise in sales and was up 6% in net profit compared to the year before.

“We are fortunate to be participating in an attractive category. We see significant runway to grow in the broader macro snack universe, and our competitive advantage is our ability to integrate the components of our growth model all the way from demand occasion to the store.”

In December last year, Frito-Lay developed a chocolate-coated variant of its ridged Lay’s brand Wavy in a move to appeal to new flavor and indulgence demands.

Earlier this month, PepsiCo’s CEO and president Indra Nooyi said snacks would become the company’s new heavyweight in the future, pulling in two-thirds of overall future revenue .

“As a result, over time, our business mix will gradually shift to be more heavily weighted towards snacks,” she said.

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