This summer, I will be working at Frito-Lay in Dallas. When I was applying to internships and thinking about the type of work I wanted to do post-MBA, the food industry was a natural choice. I love food-I love cooking, baking, going to restaurants, and trying new and unusual foods. But beyond that, I am fascinated by the food production process, and the politics of food in America, where we increasingly struggle to balance nutrition with our long-entrenched habits of eating mass-produced, often low-quality food.
Pepsico, Inc., is one of the world’s largest food and beverage companies. It is a company with vast global reach, and with an incredibly diversified portfolio of food and beverage brands. Its four main subsidiaries are Frito-Lay, Gatorade, Tropicana, and Quaker, though for this project, I would like to focus on Frito-Lay in particular. This is interesting to me one the one hand because I am going to be working for the company, but on the other hand, because like me, and like many Americans, Frito-Lay is struggling right now to figure out how to balance customer’s desires to be more “natural” and “nutritious,” with their identity as a snack food, whose customer base is driven primarily by taste. The question they are trying to answer is can snack food be healthy and enjoyable? And if they can be both, should they? Do snackers really want both, or does one group of snackers want a healthy snack, and another a delicious snack, regardless of its nutritional quality?
In 2010, Frito announced that was going to use only natural products in its chips by the end
of 2011. This move, which was meant to capture consumers who were becoming more health-conscious, has recently come under fire, as 2011 annual performance, released just weeks ago, was quite poor, and led to almost 9,000 layoffs at the company globally. In a recent article in the New York Times, the CEO of PepsiCo., described how 2011’s disappointing performance was caused by an attempt to expand too far into healthier products, at the expense of its score offerings. While this may be true, it doesn’t answer the question of how Frito can best appeal to both health-conscious snackers and taste-seeking snackers, without alienating either. That is what I would like to explore in my paper.
Right now, some of the questions I have are (and these would ideally be answered by actual
consumers):
- What are the most appealing features of Frito’s products? Taste? Convenience?
Nutrition?
- Do Frito’s core customers want a snack that is more natural or nutritious? Is Frito alienating people by moving in this direction?
- Are there consumers who are currently not customers but who would be if Frito offered even healthier offerings?
- Has the switch to natural ingredients appealed to any group of consumers? Who? Why?
- Are there other elements of health that the company could go after that would drive
more sales? For example, instead of using all natural ingredients, maybe they should be cutting calories, or reducing sodium.
- Is it possible to appeal to both segments simultaneously? (healthy and taste-seekers)
- As a by-product of the healthier tastes of American consumers, is snacking declining in general?
- How do people use these products? Are they meal replacements? When are they consumed during the day? Are they incorporated into meals?
I found the following two articles to be very useful in beginning to think about the current challenges the company is facing, and how they have attempted to deal with this dilemma in the past year or two. The first article gives a nice overview of the brand and their foray into natural foods, and the New York Times article gives a great explanation of how they have evaluated their attempts to move into more natural foods, and what this has done for the company and their customers.
-“Company Spotlight: Fritolay, Inc.” MarketWatch May 2011 (on Business Source Complete)
-“Pepsico to cut 8700 Jobs in a Revamping” New York Times, 2/9/2012
http://www.nytimes.com/2012/02/10/business/pepsico-to-cut-8700-jobs-in-a-revamping.html?_r=1&ref=pepsicoinc
As far as the format of the paper goes, I think I would like to take the approach of analyzing the current situation and making recommendations about how the company should proceed. However, I would like to draw on some of the concepts we learned in class to gain insights into
who their customers are and what they want since I think this will inform my recommendations.
I would like to come up with several personas to help me conceptualize the FritoLay customer
base, and additionally, I would like to try to rank each persona in terms of how important they are to the business. I would like to estimate the size of each persona’s segment, and then really
zone into what each group’s snacking priorities are.
Another concept from class that I would like to use in my analysis is using generative research
to gain insights. I think it will be really important to get a feel for what current consumers of Frito want in their snack, and I think the best way to get this will be by researching actual
behavior. I would want to survey, interview and potentially go into the pantries of current customers.
Pepsico, Inc., is one of the world’s largest food and beverage companies. It is a company with vast global reach, and with an incredibly diversified portfolio of food and beverage brands. Its four main subsidiaries are Frito-Lay, Gatorade, Tropicana, and Quaker, though for this project, I would like to focus on Frito-Lay in particular. This is interesting to me one the one hand because I am going to be working for the company, but on the other hand, because like me, and like many Americans, Frito-Lay is struggling right now to figure out how to balance customer’s desires to be more “natural” and “nutritious,” with their identity as a snack food, whose customer base is driven primarily by taste. The question they are trying to answer is can snack food be healthy and enjoyable? And if they can be both, should they? Do snackers really want both, or does one group of snackers want a healthy snack, and another a delicious snack, regardless of its nutritional quality?
In 2010, Frito announced that was going to use only natural products in its chips by the end
of 2011. This move, which was meant to capture consumers who were becoming more health-conscious, has recently come under fire, as 2011 annual performance, released just weeks ago, was quite poor, and led to almost 9,000 layoffs at the company globally. In a recent article in the New York Times, the CEO of PepsiCo., described how 2011’s disappointing performance was caused by an attempt to expand too far into healthier products, at the expense of its score offerings. While this may be true, it doesn’t answer the question of how Frito can best appeal to both health-conscious snackers and taste-seeking snackers, without alienating either. That is what I would like to explore in my paper.
Right now, some of the questions I have are (and these would ideally be answered by actual
consumers):
- What are the most appealing features of Frito’s products? Taste? Convenience?
Nutrition?
- Do Frito’s core customers want a snack that is more natural or nutritious? Is Frito alienating people by moving in this direction?
- Are there consumers who are currently not customers but who would be if Frito offered even healthier offerings?
- Has the switch to natural ingredients appealed to any group of consumers? Who? Why?
- Are there other elements of health that the company could go after that would drive
more sales? For example, instead of using all natural ingredients, maybe they should be cutting calories, or reducing sodium.
- Is it possible to appeal to both segments simultaneously? (healthy and taste-seekers)
- As a by-product of the healthier tastes of American consumers, is snacking declining in general?
- How do people use these products? Are they meal replacements? When are they consumed during the day? Are they incorporated into meals?
I found the following two articles to be very useful in beginning to think about the current challenges the company is facing, and how they have attempted to deal with this dilemma in the past year or two. The first article gives a nice overview of the brand and their foray into natural foods, and the New York Times article gives a great explanation of how they have evaluated their attempts to move into more natural foods, and what this has done for the company and their customers.
-“Company Spotlight: Fritolay, Inc.” MarketWatch May 2011 (on Business Source Complete)
-“Pepsico to cut 8700 Jobs in a Revamping” New York Times, 2/9/2012
http://www.nytimes.com/2012/02/10/business/pepsico-to-cut-8700-jobs-in-a-revamping.html?_r=1&ref=pepsicoinc
As far as the format of the paper goes, I think I would like to take the approach of analyzing the current situation and making recommendations about how the company should proceed. However, I would like to draw on some of the concepts we learned in class to gain insights into
who their customers are and what they want since I think this will inform my recommendations.
I would like to come up with several personas to help me conceptualize the FritoLay customer
base, and additionally, I would like to try to rank each persona in terms of how important they are to the business. I would like to estimate the size of each persona’s segment, and then really
zone into what each group’s snacking priorities are.
Another concept from class that I would like to use in my analysis is using generative research
to gain insights. I think it will be really important to get a feel for what current consumers of Frito want in their snack, and I think the best way to get this will be by researching actual
behavior. I would want to survey, interview and potentially go into the pantries of current customers.
Sally - this is a very interesting topic and certainly a huge challenge for Frito Lay. I would be very happy for you to research and write this paper, although I am a little concerned that the primary research will be a big undertaking - so just make you sure you think you can do that in the time you have. I definitely like the idea of creating personas - you might also be able to identify a strategy that Frito Lay can pursue with each persona (which you may have already been thinking of doing). Let me know if you want to talk any further about the research. Great blog post, just try to do a quick check for careless errors before posting.
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