Frito-Lay Products Case Study Answer Creer philippnes Adrees Customer Survice




Frito-Lay is a US subsidiary of PepsiCo that manufactures, sells, and sells corn chips,
potato chips, and other snack foods. The main snack food brands manufactured under
the name Frito-Lay are Frito-Lay corn chips, cheat-cheese-flavored snacks, Doritos and Tostitut
Stortiya chips, Lay’s and Ruffles potato chips, Rolled Gold Pretzels, and Walkers potato chips
(UK and Ireland). Each brand generated more than $ 1 billion in global annual sales in 2009.

Frito & Lay, Two different companies:

Frito-Lay started in the early 1930s as two separate
companies, The Frito Company and H.W.Lay & Company, and merged in 1961 to form Frito-Lay,
Inc. In 1965, Frito-Lay, Inc. merged with Pepsi-Cola Company to form PepsiCo. Since then, Frito-Lay has become a wholly-owned subsidiary of PepsiCo. Through Frito-Lay, PepsiCo is
the world’s largest snack food company, with 2009 sales accounting for 40% of
all “delicious snacks” sold in the United States and 30% of the non-US market. In 2018, Frito-Lay
North America accounted for 25% of PepsiCo’s annual sales.

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Born in Kansas City, Kansas in 1932, Charles Elmer Doolin is the manager of a Highland
Park confectionery store in San Antonio, Texas, and borrowed a corn chip recipe, portable ricer,
and 19 retail accounts from his mother from a corn chip maker for $ 100. I bought it as Doulin
started his new corn chip business, the Frito-Lay Company, in his mother’s kitchen. Doulin,
along with his mother and his brother, produced corn chips, now called Fritos, with a capacity
of about 10 pounds a day and about 30 cents in the product. Doulin distributed Fritos in a nickel
bag. Daily sales ranged from $ 8 to $ 10 and profits averaged about $ 2 per day. In 1933, the
development of the hammer press increased fleet production from £ 10 to nearly £ 100. The
Houston and Dallas production lines were in operation by the end of the year. Frito-Lay’s
headquarters has also been relocated to Dallas, located in the heart of the city, increasing
the availability of raw materials. In 1937, the Frito Company opened the R & D
Institute and announced new products such as the Fritos Peanut Butter Sandwiches and Fritos
Peanuts complement the Fritos and Fritos potato chips introduced in 1935. In 1939, the
company bought Fluff’s pig skin and started its business in Dallas. Frito-

Lay moved its
business from Haskel Avenue to a new facility on Wall Street in 2005. Alice Loupe, one
of the original six female crew members of Frafus, was in charge of the business. In 1940 she
was appointed Assistant and Manager of Accounting. In 1949 she was promoted to accounting.

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lay fruit

New Branches:

In 1941, the company opened a western division in Los Angeles and opened two sales channels
to prototype Frito-Lay’s distribution system. In 1945, the Frito-Lay sales company was
established to separate sales and manufacturing activities. In the same year, the Frito-Lay

National Company launched six franchises and continued to expand. By 1950, Fritos had
been sold in all 48 states. Frito-Lay issued its first public shares in 1954. In 1958, FritoLay entered the Midwestern potato chips market by acquiring the Nikolai Dance Company,
which manufactured a new era of potato chips. When Doulin died in 1959, Frito manufactured
more than 40 products, had factories in 18 cities, employed more than 3,000 people, and had
sales of more than $ 50 million in 1958. By 1962, Fritos had been sold in 48 countries.

H.W Lay & Company:

Herman Lay (1909-1982), a salesman born in Charlotte, North Carolina, in 1931, sold potato
chips from his car in the southern United States. In 1932 he opened a potato chips shop in
Nashville, Tennessee. Ray was hired as a salesman for Barrett Food

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The company, a manufacturer of Gardner’s Potato Chips in Atlanta, Georgia, eventually took
over Barrett’s Nashville warehouse as a distributor. Ray hired his first salesman in 1934, and
three years later had 25 employees and a larger manufacturing facility to make popcorn and
peanut butter sandwich crackers. A representative of the Barrett Food Company contacted Lay
in 1938 and offered to sell Barrett’s Atlanta and Memphis plants to Lay for $ 60,000.
Ray borrowed $ 30,000 from the bank and persuaded Barrett to pay the difference in preferred
stock. Ray moved his headquarters to Atlanta, H.W. Was established. Lay & Company in 1939.
He later purchased the Barrett Manufacturing Facility in Jacksonville,

Florida, along with other
facilities in Jacksonville, Mississippi. Louisville, Kentucky; Greensboro, North Carolina. Lay
retained the Gardner brand from Barrett Food Products until 1944 when the product name
was changed to Lay’s Potato Chips.


In the 1950s, Lay continued to expand with the acquisition of Richmond Potato Chips Company
and Capitol Frito Corporation. By 1956, it has more than 1,000 employees, factories in eight
cities, and branches or warehouses in 13 other cities. Lay & Company was the largest
manufacturer of potato chips and snack foods in the United States.
Merger forms Frito-Lay, Inc.
In 1945, Frito-Lay, H.W. Lay & Company, is the exclusive franchise for the manufacture
and distribution of Fritos in the southeast. The two companies have worked on
nationwide distribution and have built a close business relationship. In September 1961, Frito-Lay Company and H.W. Lay & Company merged with Frito-Lay, Inc. to consolidate their
headquarters in Dallas, Texas. At that time, the company had total annual sales of $ 127 million,
primarily from the sales of the four major brands of the time: Frito-Lay, Rays,
Cheetos and Raffles.
Division of PepsiCo, Inc.

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In February 1965, the board of directors of Frito-Lay, Inc., and Pepsi-Cola announced plans to
merge the two companies. On June 8, 1965, the merger of Frito-Lay and PepsiCo was approved
by the shareholders of both companies, and a new company called PepsiCo was established. At
the time of the merger, Frito-Lay owned 46 manufacturing facilities nationwide and more than
150 distribution centers nationwide. The merger was pursued for several reasons, one of which
was the potential distribution of Frito-Lay snacks outside the original markets of the United

States and Canada. merger. Shortly after the 1965 merger, the international distribution of
Frito-Lay products expanded and at the same time increased its presence in the United States,
making Ray the first potato chips brand sold nationwide (all 50 states) in 1965. rice field. Also
at the time, PepsiCo was paying attention to the marketing of Frito-Lay snacks along with
PepsiCola soft drinks. In an interview with Forbes in 1968, PepsiCo CEO Donald

Kendall summarizes: Pepsi quenches thirst. Plans to jointly promote soft drinks and snack
products were thwarted later that year when the Federal Trade

Commission ruled against it.


After establishing PepsiCo, Frito-Lay began to expand in the 1960s and 1970s, developing new
snack food brands such as Doritos (1966), Funyons (1969), and Munchos (1971). The most
popular new Frito-Lay product launched during this period was Doritos, initially positioned as a
more flavorful tortilla chip. Initially, consumers found the tip too boring. In response, the
company re-released Doritos with tacos and subsequent Nacho cheese flavors. With the
success of the more spicy process, Doritos quickly became the second most popular line after

Frito-Lay’s potato chips. Frito-Lay faced intensifying competition with potato chip brands such
as Pringles, which was introduced in the 1970s by Procter & Gamble (now owned by Kellogg’s)
in competition with the Rays. Nabisco and Standard Brands also expanded in the 1970s to produce
potato chips, cheese curls, and pretzels. This put further pressure on Frito-Lay’s entire snack


food brand.


Frito-Lay acquired Grand Ma’s Cookies in 1980. It was founded by Foster Wheeler in Portland,
Oregon in 1914 and was introduced nationwide in the United States in 1983. In January
1978, the Frito-Lay product development group, led by
Jack Liczkowski, completed the development of Tostitos. A row of Mexican tortilla chips.
Tosti’s Traditional Flavor and Tostit’s Nacho Cheese Flavor were distributed nationwide in the
In the United States in 1980, with sales of $ 140 million, making it one of the most successful new
products in Frito-Lay’s history. rice field. Sales of Tostitos grew rapidly, becoming Frito-Lay’s
fifth-largest brand in 1985 with annual sales of $ 200 million. At that time, Doritos, Lays, Fritos,
and Raffles preceded Tostitus, with annual sales of $ 250- $ 500 million. Although Tostitos has
been a long-term success, several other new products introduced in the 1980s have
been discontinued due to poor results. These short-lived Frito-Lay products included pre-filled stuffers dip bowls and topple crackers already topped with cheese. [18] In the late 1980s,
Frito-Lay acquired the cheese-flavored popcorn brand Smartfood and began selling it in the

The United States. Overseas sales also began to increase significantly around this time, with non-US
and non-Canada sales of $ 500 million in 1989 and Frito-Lay’s total sales of $
3.5 billion that year. In Canada, Frito-Lay began a partnership with the General Foods
company Hostess Food Products in 1987 and merged with the Hostess

Frito-Lay Company in

Production of new products:

Several new products were developed internally at Frito-Lay and launched in the 1990s, the
most successful of which was Sun Chips, a multi-grain chip first sold in 1991. Sun Chips, along
with new Baked (instead of fried) variants of Tostitos and Lay’s, represented Frito-Lay’s intent
to capitalize on an emerging trend among adults in the U.S., who was displaying a growing
preference for healthier snack alternatives. In 1994, Frito-Lay recorded annual retail sales of
nearly $5 billion, selling 8 billion bags of chips, popcorn, and pretzels during that year—
outpacing competitors Eagle (owned by Anheuser-Busch) and Wise (owned by Borden). Up until
the mid-1990s, Frito-Lay was represented in PepsiCo’s organizational structure as Frito-Lay, a
single division of PepsiCo. This changed in 1996 when PepsiCo merged its snack food operations
into what was titled the “Frito-Lay Company”, made up of two subsequent divisions, Frito-Lay

North America and Frito-Lay International. In 1992, Frito-Lay acquired full ownership of Hostess
Food Products from General Foods, followed in 1997 by the acquisition of candied popcorn
snack brand Cracker Jack, and in 1998 by multiple international acquisitions and joint ventures,
including Smith’s Snackfood Company (Australia), as well as Savoy Brands (Latin America).


Recent History from 2000 to Now:


In the early 1980s, PepsiCo continued to grow the Frito-Lay brand in two ways: international
expansion and acquisition. Through a joint venture between British potato chips and
snack maker Walkers, Frito-Lay has increased its distribution presence in Europe. Similar joint
ventures were arranged in other parts of the world in the 2000s, including Smith in Australia,
Sabritas and Gamesa in Mexico. Under these international agreements, some global Frito-Lay
products (such as Doritos) are sold under the same name worldwide.

Others retain
the original region name. For example, Lay’s Chips are similar products to Walkers Crisps in
the UK, and both share a similar logo design. Quaker Oats Company merged with PepsiCo in
2001, resulting in the formation of Quaker snack products such as Chew Granola Bar,
Gatorade and Quaker Rice Cake under the Frito-Lay North American division.
This business structure is short-lived, and the reorganization in 2003 integrated Frito-Lay’s (formerly Frito-Lay International) international business into the Pepsi Counter National
Division, maintaining Frito-Lay North America as its own independent division. Frito-Lay
business in the US and Canada.


Changing the Composition of its products:

Frito-Lay continued to experiment with changes in product composition and introduced low-fat
Ray and Cheetos in 2002. The “baked” line was expanded in 2002 to include baked Doritos. In
2003, Frito-Lay introduced its first natural product line with organic ingredients. The first of
these included organic blue corn Tostitos, natural lay potato chips (seasoned with sea salt),
and natural Cheetos white cheddar puffs. In 2005, a new CEO, Irene Rosenfeld,

was appointed. Under her leadership, Frito-Lay North America continued to expand its
product line through acquisitions such as Stacy’s Pita Chip Company. It “reflects FritoLay’s desire to gain widespread exposure to the $ 90 billion macro snack category,” and
industry reports at the time used more natural ingredients. In 2010, Frito-Lay reconstructed
Rays Kettle and Rays Flavor Chips into new variants labeled as being made entirely of
natural ingredients. Raise potato chips sales increased 8% after switching to all-natural
ingredients. As a result, in 2010 Frito-Lay announced plans to switch about half of all Frito-Lay
products, including Sunchips, Tostitos, Fritos, and Rolled Gold Pretzels, to natural ingredients in

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Stereotyping in 1960s commercials:

In 1967, the company introduced a cartoon spokesman, the Frito Bandito, which became the
subject of criticism from Mexican-American groups, who expressed concerns that it portrayed a
Mexican stereotype. The Frito Bandito (voiced by Mel Blanc) wore a sombrero and bandoliers,
had a handlebar mustache, and brandished pistols. Protests from advocacy groups such as The
National Mexican-American Anti-Defamation Committee (NMAADC) prompted some initial
concessions, such as the removal of the pistols and a thinning of the accent. The Frito Bandito
was replaced in 1970 by The Muncha Bunch, and then again by a new cartoon called W.C. Fritos
(based on W. C. Fields).

Genetically modified ingredients:

In the late 1990s, the use of genetically modified organisms (GMOs) was rising as a farming
practice, as it made for the growth of larger (and thus less expensive to produce) corn crops.
Frito-Lay, due in part to its leverage as one of the world’s largest purchasers of corn, became
the target of lobbying efforts from both proponents and opponents of GMOs. In late 1999,
Frito-Lay asked its suppliers not to use genetically engineered corn. A similar announcement
followed in early 2000 when the company asked its farmers not to grow genetically modified
potatoes. Frito-Lay stated these requests were made in response to consumers’ worries, and
not in response to protests by the OCA, Greenpeace, or other groups. A representative of

Greenpeace expressed the perspective that this move was a positive step, stating, “Frito-Lay is
about two-thirds of PepsiCo’s sales. They realize the handwriting is on the wall and that people
don’t want to eat GMOs”. In 2012, the policy as stated by Pepsico was: the “Global GeneticallyModified Food and Ingredient Policy. PepsiCo is dedicated to producing the highest quality,
greatest tasting food, and beverage products in every part of the world. PepsiCo ensures all
products meet or exceed stringent safety and quality standards and uses only ingredients that
are safe and approved by the applicable government and regulatory authorities. Approval of
genetically-modified foods differs from country to country regarding both use and labeling. For
this reason, PepsiCo adheres to all relevant regulatory requirements regarding the use of
genetically-modified food crops and food ingredients within the countries it operates. Where
legally approved, individual business units may choose to use or not use genetically-modified
ingredients based on regional preferences.”

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Trans fats:

Amid rising concerns over fat intake and trans-fat, fat content were reduced and trans-fats were
eliminated from Doritos, Tostitos, and Cheetos in 2004. The composition of Ruffles, Lay’s, and
Fritos were not changed as these products had always been free of trans-fat.

Poor working conditions:

In July 2021, Frito-Lay became subject to media attention over poor working conditions at its
plant in Topeka. These conditions, which allegedly include forced overtime and 84-hour
workweeks led to a strike involving hundreds of workers at the Topeka location. The strike
began on July 5 and ceased on July 23, 2023.


As of 2010, Frito-Lay operates manufacturing facilities, distribution centers, and regional offices
in more than 40 countries and is headquartered in Plano, Texas. In North America, Frito-Lay
owns (and in some cases leases) approximately 1,830 distribution centers, warehouses, and
offices. In addition, the division maintains 55 production bases. Its CEO is Stephen Williams.

North America:

PepsiCo Americas Foods consists of PepsiCo’s grocery and snack food businesses in North and
South America. This division is further divided into Frito-Lay North America,
Sabritas, Gamesa, and Latin American Foods. Includes North American Quaker Foods, but

Fridley products are not sold or distributed in this business unit. Food and snack food sales
in the Americas accounted for 48% of PepsiCo’s net sales in 2009. Frito-Lay North America is
the department that controls the research and development, sales, and distribution of Frito-Lay
products in the United States and Canada. Major brands include Rays and Raffles Potato
Chips, Doritos Tortilla Chips, Tostitut Tortilla Chips and Dip, Cheetos Cheese Flavor Snacks,

Fritchley Corn Chips, Rolled Gold Pretzels, Sun Chips, and Cracker
Jack Popcorn. Products manufactured in this division are sold to independent distributors
and retailers and transported from Frito-Lay’s manufacturing facilities to distribution centers,
primarily in company-owned and operated vehicles. Sabritas and Gamesa are two of PepsiCo’s
food and snack businesses, headquartered in Mexico, which was acquired by PepsiCo in 1966
and 1990, respectively. Sabritas sells Frito-Lay products such as Cheetos,
Fritos, Doritos and Ruffles in Mexico. We also sell local brands such as Poffets,

Rancheritos, Crujitos and Sabritones. Gamesa is Mexico’s largest biscuit maker, selling brands
such as Emperor, Rainbow, and Marias Gamesa.

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Central and South America:

PepsiCo’s Latin Americas Foods sells Frito-Lay branded snack foods in Central and South
America. Its portfolio of brands includes Lay’s, Cheetos, Ruffles, and Doritos, as well as local
brands such as Fandangos, Lucky, Stiksy, Pingo d’Ouro, Baconzitos, and Torcida snacks in Brazil
(sold under the brand Elma Chips) and ManiMoto in Colombia.


Frito-Lay snacks are distributed in Europe under the PepsiCo Europe operating division,
previously PepsiCo International. Products include Walkers Crisps, Doritos, Paw Ridge, Smiths,
Cheetos, Duyvis, Snack-a-Jacks, Twists, and Solanki. PepsiCo maintains manufacturing plants in
Europe, the largest of which are two snack manufacturing and processing plants located in
Leicester and Coventry in England. In Spain and Portugal, operates the subsidiary Matutano

Asia, Middle East, and Africa:

Frito-Lay products sold under the PepsiCo Asia, Middle East & Africa division represent the
smallest (as of 2010) proportion on a revenue basis. However, its distribution is growing more
quickly than in Frito-Lay’s primary markets. While the primary global Frito-Lay brands are sold in
some parts of these regions, many snack food products have been created to match local tastes
and cultural preferences. In India, one of these is Kurkure Twisteez, a

potato-based snack food
produced in flavors popular in the country such as “Masala Munch”. Frito-Lay has also
employed alternate distribution means in these regions. In South Africa, it hired delivery drivers
who had grown up in their delivery areas, with the intent of “making the product seem less

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fruit lays


Although product catalogs vary widely from country to country, PepsiCo divides
snack foods into two major brand categories: those manufactured in North America and
those manufactured outside North America. In certain parts of the world, the company’s
snack foods are manufactured under region-specific names such as Sabritas, Elma Chips and
Walkers. The main snack food brands and products manufactured under the Frito-Lay name
include Fritos Corn Chips, Cheetos Cheese Flavoured Snacks, Doritos, and Tostitos Tortilla
Chips, Lay’s Potato Chips, Ruffles Chips, and Walker’s Potato Chips (Walker’s brand in the UK).
Sold at. Raise brand in Ireland and other Europe)-Global annual sales in 2009 exceeded $

1 billion each, TrueNorth nut clusters, and nut chips. In India, Frito-Lay uses international
brands and local brand Ankle Chips, which was acquired in 2000. Kurkure, an Indian
snack food developed and manufactured by PepsiCo India, announced on March 31 that
it is now available in Canada, the United Arab Emirates, and the Gulf region. There is also a
subsidiary brand called “Star Chips” (snack company) in Poland. In the countryside, there is also
a Polish version of Ray’s based in Grodzisk Mazovietsuki

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