P&G tests revival of Eagle Snacks brand

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Procter & Gamble Co. is testing whether it can revive a dead brand with a three-store test of Eagle Snacks, potentially opening a new front in its battle with PepsiCo's Frito-Lay.

The plan, should the West Coast test provide a basis for moving forward, would be for regional snack marketers to make and distribute Eagle Snacks under license from P&G, a spokesman said. P&G bought rights to the brand from Anheuser-Busch in 1997 after the beer marketer raised the white flag in its decade-long snack attack against Frito-Lay.

But the prospect of an Eagle revival, or any kind of bagged-chip battle between the national giants, sends chills through some regional snack managers. They fear a return to promotion wars that raised the cost of staying on store shelves and put some regional brands out of business in the 1990s. "I wouldn't want to go through that again," said one executive.

Limited to chips

The current test is limited to potato chips, though Eagle, in its heyday, encompassed a full line including pretzels and mixed snacks.

The Eagle test comes as P&G fends off Lay's Stax, a canned potato crisp similar to P&G's Pringles. So far, Stax mainly appears to be taking share from Lay's bagged products and expanding the crisp category, said Jamie Egasti, VP-North American Snacks at P&G, in an interview before P&G's investor conference Dec. 10. "It's way too soon to tell, but the early indications is the segment is expanding and we're building our share,"said P&G Chairman-CEO A.G. Lafley on Dec. 11.

Early results are hard to judge, however, as Stax hit stores about six months behind its initial launch schedule and has received marketing support weaker than some industry executives expected. P&G, meanwhile, has aggressively promoted Pringles, bringing prices down by more than a third to under $1 in some markets.

How aggressively Frito-Lay supports Stax in early 2004, with a new marketing budget, could be key to its success and gauging how serious Frito is about doing battle in the category, said industry executives. A Frito-Lay spokesman said Stax is meeting expectations and not cannibalizing its potato chip business.

Eagle last landed in 1999 in Portland, Maine, as part of a plan to use the brand primarily as a carrier for P&G's Olean fake fat. The idea then was to sell the brand through a network of regional chip marketers. But it was ultimately killed.

Test results can be hard to read, said a former P&G executive, because Frito, like many marketers, tends to swamp test markets with promotion to skew results. And any rollout would need to be truly national, he said, to limit Frito's promotional firepower.

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