In Argentina, Lay's Vending Machine Turns Raw Potatoes Into Bags of Chips

PepsiCo Combines Sampling and Story Telling With Fun and Simple Promotion (Creating the Machine Was the Hard Part)

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PepsiCo is combining product sampling with storytelling in Argentina in an unusual vending machine that appears to manufacture Lay's potato chips before your eyes after a real potato, rather than coins, is dropped in a slot.

The Lay's machine, which will make its first appearance in a Buenos Aires supermarket this fall, features an intricate system of tubes, flames and boiling water as the potato is seen going through six distinct steps: washing, peeling, cutting, cooking, salting and finally packaging, ending with a bag of Lay's potato chips popping out of the machine. The process, which looks incredibly real, is actually a video that appears to show the inner workings of potato chip manufacturing.

Lay's vending machine
Lay's vending machine

"We thought this would be a great opportunity to show customers how Lay's are made," said Alfredo Della Savia, brand manager for salty snacks for PepsiCo ConoSur. "There were rumors Lay's aren't made from real potatoes, and we're trying to fight that , and show we have no secrets -- it's potatoes, oil and salt."

At the store, promoters will hand shoppers real potatoes with stickers inviting them to take the potato and insert it in the Lay's machine by the snack aisle and watch it be made into potato chips, said Nicolas Pimentel, the founder of local shop +Castro and a former exec at BBDO Argentina, which worked on the project led by Mr. Pimentel.

PepsiCo is talking with different retailers the marketer works with in Argentina like Walmart and Carrefour to determine where to place the Lay's machine, which will remain in one supermarket for a week or two before moving to a new location. Mr. Della Savia said the sampling promotion will start in late October or early November.

PepsiCo doesn't expect the first Lay's machine to be the only one.

"This is our first test market, to see how it works and if people get the idea and like it," Mr. Della Savia said. "We expect to do more machines, and go around the country. Hopefully it will go global."

He said his PepsiCo colleagues from other countries are interested in seeing how the Lay's machine works in Argentina.

The Lay's machine will be a highlight of a bigger effort underway to emphasize that Lay's, by far the leading potato-chip brand in Argentina, is made entirely of real potatoes, with a little oil and salt. Packs have been redesigned to show real potatoes on the back panel, and billboard ads explain Lay's potato chips contain only potatoes, he said. A similar message appears on Lay's delivery trucks.

Mr. Pimentel and his team have been working for more than six months to perfect the Lay's machine, which presented enormous technical challenges. For instance, a movement sensor was needed so the machine can sense when a potato is dropped in, and activate both the one-minute video and a separate system for the lights that highlight a list of the six steps of washing through packaging as the video shows the corresponding action. Everything must be perfectly synchronized, ending with the potato-chip package dropping out of the machine at the same second the video ends "or the magic is gone," Mr. Pimentel said.

There's even a small heater at the bottom so the sample pack is dispensed to the shopper warm, like a freshly cooked potato. But the heater must turn on briefly to warm each bag and then switch off, because the machine would melt down if the heater were on all the time.

Finally, the video must be "hyper-realistic," Mr. Pimentel said, so the potato inserted in the machine seamlessly leads into the potato-chip-making video. The machine holds about 150 packs of Lay's. The first, prototype machine cost about $40,000 to develop and Mr. Pimentel estimates that additional machines would cost about $20,000 to $30,000 each.

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