FRITO-LAY SERVES UP NEW SNACKS: PEPSICO UNIT INTRODUCES OFFSHOOTS OF FRITOS, RUFFLES, CRACKER JACK

By Published on .

Most Popular
With the fall TV shows under way, Frito-Lay is gearing up for prime couch-potato season with a batch of line extensions for seven of its top brands.

The PepsiCo unit will roll out the new products over the next six months. Among the more notable introductions: the national rollout of Frito Chili & Scoops Kits and Frito Sloppy Joe & Scoops Kits in January, and the upscale positioning of Ruffles in November.

A Ruffles price hike will be justified by the launch of a subline called Flavor Rush that includes bold flavors BBQ & Cheddar and Zesty Sour Cream that are seasoned throughout the whole chip rather than only on top.

The innovations are an attempt to spark sales in the modest-growth snack category Frito dominates with a 60% share by offering consumers saucier flavors and convenient snacking kits for football season.

Also appearing this season: Butter Toffee Cracker Jack in October; Tostitos Kits in mid-November; Baja Picante and Screaming Sour Cream Doritos in late November; Rold Gold Party Mix in late December; Cheetos X's & O's in January, and Tostitos' Hint of Red Pepper flavor in February.

The new Cracker Jack flavor is an attempt to steal share from International Home Foods' Crunch 'N Munch brand; Butter Toffee is its top seller.

2-TIER CHIP PRICING

As for potato chips, Frito will increase the price on Ruffles from $2.99 to $3.19. Lays, which will remain priced at $2.99, will serve as the value chip, according to one Midwest retailer.

For the convenience-minded consumer, Frito is rolling out Tostitos Kits, 6 oz. microwaveable combination packs of Chips & Salsa and Chips & Cheese Dip. As with the Frito Kits, being rolled national from test Jan. 16, the Tostitos combo kits are a means through which Frito hopes to capitalize on the convenience craze that has consumers paying premium prices for easy snack and meal solutions.

The Tostitos varieties -- which include roughly 3.5 oz. of dip and 2.5 oz. of chips -- carry a suggested retail price of $1.99, while Frito varieties -- a little larger at 9.5 ozs. of Scoops and dip -- retail for $2.79.

Although Kellogg Co. was not able to make a go of its Breakfast Mates cereal-and-milk-kits, which were recently pulled from the shelves, Kraft Foods created a booming meal-kit business with its Oscar Mayer Lunchables franchise, which has been copied by competitors. While it was in test, Frito spent $1.75 million in media on Chili & Scoops through May of this year, according to Competitive Media Reporting.

Similarly intending to offer snackers something easy, Frito is extending its Rold Gold pretzel brand into the party mix segment beginning Dec. 26.

TAKING ON BIG G

The move is an attempt by the giant snack marketer to encroach on General Mills' ownership of the segment. General Mills markets both the thriving Chex Mix franchise and, as of August, Gardettos. Sales of Chex Mix grew 10.1% to $107 million for the year ended July 18, while Gardettos dropped 4.4% to $42.5 million, according to Information Resources Inc.

Frito will center much of the advertising for its new snack products around key football events, including the Jan. 2 Tostitos Bowl that this year Frito will dub a "Millennium Party." PepsiCo dedicated roughly $113 million in media spending to Frito-Lay products in 1998, according to CMR.

NEW PEPSI EXECS

Recent management upheaval at PepsiCo makes any guesses on future marketing activity difficult. "When a new executive comes aboard, they want to put their stamp on the business and with that comes change," said Skip Carpenter, a VP and beverage analyst at Donaldson, Lufkin & Jenrette.

Last week, PepsiCo named Al Bru, former president and general manager of its Sabritas snack unit in Mexico, president-CEO of Frito-Lay North America. Mr. Bru succeeded Steven Reinemund,now president-chief operating officer of PepsiCo.

Mr. Bru, whose 23-year experience with PepsiCo has been limited to Mexican operations, is reputed for helping grow sales for Frito-Lay International, Mr. Carpenter said. Despite that experience, he said, "Al is making a quantum leap from managing a Mexico-only snack business to Frito-Lay North America, which will generate sales of almost $7.9 billion in sales and account for 54% of

In this article: