Snacks to go

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PepsiCo's Frito-Lay will introduce a new single-serve canister line called Go Snacks this January backed by $60 million in marketing in the hopes that consumers' desire for convenience outweighs their concern for price.

The pre-eminent salty snack marketer wants to stay on top as competition to develop snacks grows amongst a wide array of food marketers. General Mills recently pledged $94 million to build its snack portfolio (AA, Sept. 10) and Kraft Foods' Nabisco unit has seen great success with hand-to-mouth snacks including Ritz Bits and Mini Oreos.

Go Snacks, actually bite-sized versions of its Doritos 3Ds, and new brands Cheetos Asteroids and Fritos Hoops, are packaged in hourglass-shaped plastic containers with resealable cup lids intended to fit easily into car beverage-holders as well as in backpacks and lunchboxes. An extensive TV and print campaign from Omnicom Group's BBDO Worldwide, New York, will begin in January touting the packaging innovation expected to make Frito-Lay products even more portable-at a price.

The single-serve canisters carry a suggested retail price of $1.29, a hefty premium considering consumers can get an entire bag of chips for 99 cents. But consumers have shown a willingness to pay for convenience, according to one Midwest retail executive, especially in beverages where a 20 oz. serving commands the same 99 cents price as a 2-liter bottle. "People eat meals every day in their cars, so they're looking for something to grab and take with them," the executive said. "Every marketer talks about having products that meet those needs."

willing to pay

Edward Jones consumer analyst Patrick Schumann agrees consumers will likely be willing to pay a premium if they see the added value of convenience, a growing priority that PepsiCo-and Frito-Lay in particular-seems well-positioned to tackle, he said.

"Frito has tremendous competitive advantage in the salty snacks category ... commanding roughly 60% of the more than $13 billion U.S. snacks arena. ... But they're not sitting still, [they're] always coming up with ways to boost sales with new products and enhance their relationship with consumers," Mr. Schumann said.

The launch of Go Snacks, if successful, could prove damaging to Procter & Gamble Co.'s already lackluster foods business. Although P&G had hoped to expand distribution of its Pringles canister snacks and Sunny Delight juices through a joint venture with Coca-Cola Co. announced earlier this year, the companies last week scrapped plans for the effort. Analysts believe P&G may seek another joint venture for expanded distribution.

In the meantime, P&G began earlier this month to test its own multi-packs of convenient single-serve packages called Pringles Snack Stacks in Minneapolis, and plans to launch a new line of tortilla chips called Turangos in triangular-shaped Pringles-like canisters. Grey Global Group's Grey Worldwide, New York, is agency of record for Pringles.

Campbell Soup Co.'s Pepperidge Farm unit is also seeking to offer increased portability for its Goldfish crackers. The division recently completed a limited national test of 4 oz. easy-grip on-the-go plastic containers of its Flavor-Blasted Goldfish varieties, the results of which it is still evaluating to determine future plans, according to a company spokeswoman. Pepperidge Farm is also rolling out new Giant Goldfish Sandwich crackers-cheese crackers with peanut butter filling and butter crackers with cheese filling-into New England markets this month. No initial advertising is planned; Pepperidge Farm's agency is WPP Group's Y&R Advertising, New York.

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