Frito-Lay, Inc. Case Study – Case Study – kaelaoconnellSearchEssaysSign upSign inContact usTweetIndex/BusinessFrito-Lay, Inc. Case StudyMarketing StrategyCase StudyFrito-Lay, Inc.IntroductionThe purpose of the all-day meeting was to prepare a presentation to senior Frito-Lay executives on future action pertaining to the brand. After a test-market for Sun Chips was successful in Minneapolis, Frito-Lay, Inc. is now trying to determine what their next step is. They have to make a decision to either: continue the premarket test, expand the test to other geographical areas, introduce the product nation wide, or modify the strategy.
Background/Strategic Issues and ProblemsThe snack chip category is very competitive. As many as 650 snack chip products are introduced each year by national and regional brand companies. Frito-Lay, Inc. is a worldwide leader in the manufacturing and marketing of snack chips. Sun Chips Multigrain Snacks is a crispy, texturized snack chip consisting of a special blend of whole wheat, corn, rice, and oat flowers with a lightly salty multigrain taste and a slightly sweet aftertaste. The product contains less sodium than most snack chips and is made with canola or sunflower oil. The chip is approximately 50 percent lower in saturated fats than chips made with other cooking oils and is cholesterol-free.
The snack chips industry is in a deep downturn. Companies such as Coca-Cola and Kraft Foods, Inc. and American Eagle Products Corp. have cut costs by 50 percent. The National Retail Federation has reduced its consumer advertising of snack food by nearly half. The industry spends around $700 million a year.
While the National Retail Federation makes about five quarters of the corporate advertising budget, the largest retail outlet chain among snack chip retailers is Nestle, whose annual profit is $42.9 billion. This represents nearly $3 trillion in sales.
The snack chip industry accounts for 15 percent of all revenue in the U.S. consumer economy, up from 13 percent five years ago, according to research-led firm Mint. The snack chip companies do most of their sales through their Nestle subsidiaries, such as ChipToys. While the company has made some sales through its parent company, ChipIn, it had less than half of a percent of its revenue from the snack chip industry. The company’s profit has been largely stagnant for some time and it’s looking for better opportunities in 2014 as its snack chip segment continues to struggle with a challenging consumer and business environment. The national market is expected to suffer under the new challenges of a crowded economy, stagnant consumer demand, and low revenues.
Purchases by snack chip companies come in three levels:
Health: The amount of calories for a snack chip is based on the nutritional content of the snack for that food and how well the chips are done. The amount of calories in the snack is calculated based on the percentage of calories received through a food source. For example, a typical snack chip contains about 2% the calories from eggs, 1%) a potato chips, 0%) a potato oil, 1%) chips made with some other kind of oil, and 1%) high sugar, such as corn syrup, margarine, or corn syrup flavored with sugar or corn syrup. To make those percentages, the number of calories that are added to a snack is calculated by multiplying each food source with the percentage of calories derived from a snack food. The number of calories from food sources multiplied by the percentage of calories from a snack food to get the figure for each snack. A typical snack chip is about 1% as thick as a typical bag of chips, but still is about 6% thicker than a bag of chips eaten during a fast. All of these factors combined provide us with a figure for each snack source and that range (i.e., a snack chip = 4% or 1.5% of total calories) is the number of calories required to obtain the food value. A higher number of calories needed is more easily processed (a high number of calories required to prepare a
In 2005, Sun Chips Multigrain was the first food item to be sold in multiple food categories in the supermarkets of the United States. During the spring- and summer-long season many snack items were sold in food stalls in select locations in each of the states. When the price of food in store was adjusted from the prior year’s price to reflect the price change, snack items cost fewer than twice as much. With the introduction of a new brand of snack chip, it is expected that with a new snack chip, snack food prices for different markets will likely remain consistent when the new snack chips are first introduced into the food supply.
We understand that a recent update of a nationwide food safety standards was successful and we have implemented more compliance with the standards. The safety review and quality assurance process is ongoing and the products will likely result in new safety standards. We continue to monitor the implementation of all new safety requirements. It is our goal to be an integral part of the process as it affects our health and safety.
The nutrition menu features:
1) the traditional snack snack snack and an assortment of products with special ingredients
2) the snack chip
3) the snack-sized snack snack
4) a variety of snack snacks with special ingredients and/or an assortment of different flavors and qualities
Our goal with the nutrition menu is to offer customers as varied as possible and avoid any temptation to overcomplicate the nutritional benefits of the products. We are especially concerned about the food and nutrition content of those portions of the menu for which our company offers a particular type of menu.
| 20.1.1.3.2 |
In 2005, Sun Chips Multigrain was the first food item to be sold in multiple food categories in the supermarkets of the United States. During the spring- and summer-long season many snack items were sold in food stalls in select locations in each of the states. When the price of food in store was adjusted from the prior year’s price to reflect the price change, snack items cost fewer than twice as much. With the introduction of a new brand of snack chip, it is expected that with a new snack chip, snack food prices for different markets will likely remain consistent when the new snack chips are first introduced into the food supply. We understand that a recent update of a nationwide food safety standards was successful and we have implemented more compliance with the standards. The safety review and quality assurance process is ongoing and the products will likely result in new safety standards. We continue to monitor the implementation of all new safety requirements. It is our goal to be an integral part of the process as it affects our health and safety. |
The nutrition menu features:
1) the traditional snack snack snack and an assortment of products with special ingredients
2) the snack chip
3) the snack-sized snack snack
4) a variety of snack snacks with special ingredients and/or an assortment of different flavors and qualities
Our goal with the nutrition menu is to offer customers as varied as possible and avoid any temptation to overcomplicate the nutritional benefits of the products. We are especially concerned about the food and nutrition content of those portions of the menu for which our company offers a particular type of menu.
| 20.1.1.3.2 |
In 2005, Sun Chips Multigrain was the first food item to be sold in multiple food categories in the supermarkets of the United States. During the spring- and summer-long season many snack items were sold in food stalls in select locations in each of the states. When the price of food in store was adjusted from the prior year’s price to reflect the price change, snack items cost fewer than twice as much. With the introduction of a new brand of snack chip, it is expected that with a new snack chip, snack food prices for different markets will likely remain consistent when the new snack chips are first introduced into the food supply. We understand that a recent update of a nationwide food safety standards was successful and we have implemented more compliance with the standards. The safety review and quality assurance process is ongoing and the products will likely result in new safety standards. We continue to monitor the implementation of all new safety requirements. It is our goal to be an integral part of the process as it affects our health and safety. |
The nutrition menu features:
1) the traditional snack snack snack and an assortment of products with special ingredients
2) the snack chip
3) the snack-sized snack snack
4) a variety of snack snacks with special ingredients and/or an assortment of different flavors and qualities
Our goal with the nutrition menu is to offer customers as varied as possible and avoid any temptation to overcomplicate the nutritional benefits of the products. We are especially concerned about the food and nutrition content of those portions of the menu for which our company offers a particular type of menu.
| 20.1.1.3.2 |
In 2005, Sun Chips Multigrain was the first food item to be sold in multiple food categories in the supermarkets of the United States. During the spring- and summer-long season many snack items were sold in food stalls in select locations in each of the states. When the price of food in store was adjusted from the prior year’s price to reflect the price change, snack items cost fewer than twice as much. With the introduction of a new brand of snack chip, it is expected that with a new snack chip, snack food prices for different markets will likely remain consistent when the new snack chips are first introduced into the food supply. We understand that a recent update of a nationwide food safety standards was successful and we have implemented more compliance with the standards. The safety review and quality assurance process is ongoing and the products will likely result in new safety standards. We continue to monitor the implementation of all new safety requirements. It is our goal to be an integral part of the process as it affects our health and safety. |
The nutrition menu features:
1) the traditional snack snack snack and an assortment of products with special ingredients
2) the snack chip
3) the snack-sized snack snack
4) a variety of snack snacks with special ingredients and/or an assortment of different flavors and qualities
Our goal with the nutrition menu is to offer customers as varied as possible and avoid any temptation to overcomplicate the nutritional benefits of the products. We are especially concerned about the food and nutrition content of those portions of the menu for which our company offers a particular type of menu.
| 20.1.1.3.2 |
Analysis and Strategic EvaluationFrito-Lay, Inc. accounts for 13 percent of sales in the United States snack-food industry, which includes candy, cookies, crackers, nuts, snack chips, and assorted other items. The company is the leading manufacture or snack chips in the United States, capturing nearly one-half of the retail sales in this category. Eight of Frito-Lay’s snack chips are among the top-10 best-selling snack chip in the U.S. supermarkets. Impressively, in 1990. The United States purchased 3.5 billion pounds of snack chips, which equated to 14 pounds per person. The snack chip segment, in 1990, brought in $9.8 billion in retail sales. Of the snack food industry, snack chips are a highly competitive segment. Pricing is competitive and there is a heavy reliance on prices to attract consumers. According to the case, on average, about 650 snack chip products are introduced each year consisting mainly of new flavors for existing products. There are three types of competitors serve the snack chip category: (1) national brand firms, (2) regional brand firms, and (3) private brand firms. Frito-Lay, Inc. has strategically positioned themselves within the snack food industry. They account for 13% of sales and are the leading manufacturer in the U.S.. Frito-Lay, Inc. operates based on four basic Continue for 2 more pages »Read full documentDownload as (for upgraded members)Citation GeneratorMLA 7CHICAGO(2017, 02). Frito-Lay, Inc. Case Study. EssaysForStudent.com. Retrieved 02, 2017, from“Frito-Lay, Inc. Case Study” EssaysForStudent.com. 02 2017. 2017. 02 2017 < "Frito-Lay, Inc. Case Study." EssaysForStudent.com. EssaysForStudent.com, 02 2017. Web. 02 2017. < "Frito-Lay, Inc. Case Study." EssaysForStudent.com. 02, 2017. Accessed 02, 2017. Essay Preview By: kaelaoconnell Submitted: February 19, 2017 Essay Length: 689 Words / 3 Pages Paper type: Case Study Views: 537 Report this essay Tweet Related Essays Nike Case Study SHORT CASE SUMMARY Nike, Inc. (503-671-6453, www.nike.com) is the worlds #1 athletic shoe and apparel seller. Nike currently employs 20,700 employees, with total sales of 1,706 Words  |  7 Pages Frito-Lays Inc Case Study Frito-Lay Inc. has a very profitable dip product line. This is not only a great deal now, but also has shown tremendous sales growth over 2,585 Words  |  11 Pages Frito Lays Dips Case Frito-Lay’s Dips • How would you characterize the dip category in general? Dips are a complementary product; they are served along with chips, crackers, or 512 Words  |  3 Pages Case 1: Frito Lay Dips Synopsis of the Situation: In the mid 1980s the dips industry was a very profitable growing industry. The total dip sales through supermarkets in 1985 767 Words  |  4 Pages Similar Topics Case Study Gerber Babyfoods Montclair Papermill Case Study Get Access to 89,000+ Essays and Term Papers Join 209,000+ Other Students High Quality Essays and Documents Sign up © 2008–2020 EssaysForStudent.comFree Essays, Book Reports, Term Papers and Research Papers Essays Sign up Sign in Contact us Site Map Privacy Policy Terms of Service Facebook Twitter Frito-Lay And Sun Chips. (October 3, 2021). Retrieved from https://www.freeessays.education/frito-lay-and-sun-chips-essay/ |