Baby Boomers Help PepsiCo's Frito-Lay See a Boom in Business

Demographic's Snacking Habits Force Company to Refocus Its Attention

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CHICAGO (AdAge.com) -- Many baby boomers are supposed to be watching their salt and saturated-fat intake, yet they helped boost Frito-Lay North America's sales 6% last year, to $13 billion.

BETCHA CAN'T EAT JUST ONE: In Frito-Lay TV spots, potato farmers around the country argue about whose produce tastes best.
BETCHA CAN'T EAT JUST ONE: In Frito-Lay TV spots, potato farmers around the country argue about whose produce tastes best.
At a PepsiCo investor conference in New York last week, Frito-Lay CMO Ann Mukherjee said the company is bullish on boomers "because they graze more." In fact, they snack three times a day on average -- twice as much as other cohorts. To keep this demographic in the fold, the Pepsi division is doubling down on efforts to make its products "permissible," so the aging target market can feel better about enjoying their favorite products more frequently.

"As a company which was traditionally focused on a younger person, we're now learning to set our sights on the young person and the boomer," said PepsiCo CEO Indra Nooyi at an investor conference last week.

Ms. Nooyi said the company is closely watching the emergence of boomers, noting there are 1.4 billion worldwide and 300 million in China alone. By 2030, the population of people 65 and over will double.

In the U.S., NPD Group projects "snacking occasions" to grow 19% over the next decade. One in five meals already are snacks.

Frito-Lay North America President Al Carey credited some of his division's 6% sales lift to an 11% surge sales for Lay's potato chips, a $2 billion brand.

Next up, Frito will be releasing a succession of "better-for-you" reformulations. With a baby-boomer target, junk-food guilt is a big hurdle, particularly as the group starts to cut back on salt. Mr. Carey said that the company would focus on "reducing negatives," like salt and saturated fat, "and adding positives," like whole grains.

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