Frito-Lays Inc Case StudyJoin now to read essay Frito-Lays Inc Case StudyFrito-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 the past few years. In 1981 their sales reached 30 million dollars, with the sales figures almost tripling by 1985, reaching 87 million dollars. However, this success brings the corporation into a very unique situation as well as bringing up a very good question of “how to develop this further?” Their options boil down to two different viewpoints. The first is the “chip dip” category or secondly, the newer and edgier “vegetable dip” category. The company in 1986 has also introduced sour cream-based French onion dip, which has an annual sales forecast of 10 million dollars and it is a bridge between the chip and the vegetable dip markets.
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About Frito-Lay
Frito-Lay is the world renowned maker of breakfast, snack, condiments and other premium beverages. Frito-Lay has been the sole manufacturer and marketing entity of “Breakfast, snack and condiments” since 1946, and has over 50 brands at the same time. Frito-Lay is also known for its breakfast and breakfast-related innovations, and its products have been a part of the cereal and other popular meals, as well as products developed worldwide for the manufacturing industry. Frito-Lay was founded by John Frito in 1989 and is one of the world’s leading suppliers of “Breakfast, snacks and condiments” to nearly 500 million Americans, and has been a major producer of nearly one million meals worldwide for over 20 years. Frito-Lay continues to develop the innovations necessary to provide its workers and customers with superior choices of high quality, fresh ingredients, all with a focus on ensuring the highest quality of life and a product which the employees of each company take pride in in its high quality food and beverage. Frito-Lay does not make any artificial flavorings or preservatives, and does not test their ingredients in order to avoid any risk of carcinogens or bacteria. When using any food ingredients, please avoid using synthetic ingredients or to make certain recipes. As a result, Frito-Lay’s ingredient and manufacturing processes will not adhere to factory practices. For more information, please consult our Referenced FAQ or contact us via our contact form at (919) 363-0236 or (1). • Frito-Lay is a family owned and operated franchisee of more than 400 restaurants and numerous other brands. Frito-Lay shares generally trade as of 12:30 a.m. Eastern Standard Time (ET), and are closed below $85 as of 12:30 a.m. EPT (EDT). Frito/Lay also makes a variety of other specialty items at its franchises of operations including, but not limited to, sandwiches, chips, salad, sandwiches, salads, ice cream, ice cream-prepared food and more. For more information, please visit www.facebook.com/FritoLay and www.twitter.com/fritolielly. • With sales of 16.58 million dollars, Frito-Lay makes more than 400 million meals for consumers worldwide daily. The Company’s global retail businesses make up more than 100% of Frito-Lay’s products while operating in approximately 100 countries, including Europe, Asia, North America, Australia, Europe, Mexico, and Pacific Rim. Frito-Lay makes the following major brands in America: • Frito-Lay Frito-Lay was founded by John Frito in 1968 and began as a family company in 1969. It is the world’s largest family company having
Frito-Lay is not alone in doing this. The more than one million sales that the company has made since the beginning of its foray into the vegetable dip market between 1990 and 2011, which was based on selling less and selling more, has resulted in an increasing number of new and improved products and has created more opportunities. While we cannot stress this enough, we do believe that in order to become profitable, Frito-Lay needs to be able to scale up a number of key areas. The first and foremost step is, of course, to establish a successful and mature product line to compete with other top level brands such as BKL, KFC, McDonald’s, and Wixi. This new line, which will allow a larger number of employees to access more information and produce more products, is simply the first step of a long working line. However, the company should also develop a plan for the next step as well. The companies in this line have a very different approach to making money, and both may have some very unique or unique ideas, so we are sure that they will be helpful for a short time through our study. One thing we know that is important to take note of is that in the world of Frito-Lay, they are very successful marketers, and the success they achieve depends on their customer base. We think that as many as 35% of Frito-Lay employees are employed in their sales departments, and our survey is very optimistic that these employees will provide many of our main customers with a great experience. If their satisfaction with their business was low, their satisfaction with their clients were high, their satisfaction with the team they work for would be high, and they would be well paid. We could not be more proud of our research team. Even as some of our top sales leaders are very humble, they are also very intelligent by nature. The fact that we do see them have a very good relationship because we believe in them and that they are very committed to our brand, makes us very confident that they will help us grow the brand. Our survey has more than 12 million individual investors who have signed up to join us in the coming months. Frito-Lay, as it stands today, is a very well developed startup and is very profitable. The more we can gather from our customers and investors, the more we hope that they will invest in Frito-Lay and that it will work well with them. We believe that by having an impressive user base, we will grow our business and possibly become a global brand. Sincerely, Rob Gagnon
Frito-Lay is not alone in doing this. The more than one million sales that the company has made since the beginning of its foray into the vegetable dip market between 1990 and 2011, which was based on selling less and selling more, has resulted in an increasing number of new and improved products and has created more opportunities. While we cannot stress this enough, we do believe that in order to become profitable, Frito-Lay needs to be able to scale up a number of key areas. The first and foremost step is, of course, to establish a successful and mature product line to compete with other top level brands such as BKL, KFC, McDonald’s, and Wixi. This new line, which will allow a larger number of employees to access more information and produce more products, is simply the first step of a long working line. However, the company should also develop a plan for the next step as well. The companies in this line have a very different approach to making money, and both may have some very unique or unique ideas, so we are sure that they will be helpful for a short time through our study. One thing we know that is important to take note of is that in the world of Frito-Lay, they are very successful marketers, and the success they achieve depends on their customer base. We think that as many as 35% of Frito-Lay employees are employed in their sales departments, and our survey is very optimistic that these employees will provide many of our main customers with a great experience. If their satisfaction with their business was low, their satisfaction with their clients were high, their satisfaction with the team they work for would be high, and they would be well paid. We could not be more proud of our research team. Even as some of our top sales leaders are very humble, they are also very intelligent by nature. The fact that we do see them have a very good relationship because we believe in them and that they are very committed to our brand, makes us very confident that they will help us grow the brand. Our survey has more than 12 million individual investors who have signed up to join us in the coming months. Frito-Lay, as it stands today, is a very well developed startup and is very profitable. The more we can gather from our customers and investors, the more we hope that they will invest in Frito-Lay and that it will work well with them. We believe that by having an impressive user base, we will grow our business and possibly become a global brand. Sincerely, Rob Gagnon
Frito-Lay is not alone in doing this. The more than one million sales that the company has made since the beginning of its foray into the vegetable dip market between 1990 and 2011, which was based on selling less and selling more, has resulted in an increasing number of new and improved products and has created more opportunities. While we cannot stress this enough, we do believe that in order to become profitable, Frito-Lay needs to be able to scale up a number of key areas. The first and foremost step is, of course, to establish a successful and mature product line to compete with other top level brands such as BKL, KFC, McDonald’s, and Wixi. This new line, which will allow a larger number of employees to access more information and produce more products, is simply the first step of a long working line. However, the company should also develop a plan for the next step as well. The companies in this line have a very different approach to making money, and both may have some very unique or unique ideas, so we are sure that they will be helpful for a short time through our study. One thing we know that is important to take note of is that in the world of Frito-Lay, they are very successful marketers, and the success they achieve depends on their customer base. We think that as many as 35% of Frito-Lay employees are employed in their sales departments, and our survey is very optimistic that these employees will provide many of our main customers with a great experience. If their satisfaction with their business was low, their satisfaction with their clients were high, their satisfaction with the team they work for would be high, and they would be well paid. We could not be more proud of our research team. Even as some of our top sales leaders are very humble, they are also very intelligent by nature. The fact that we do see them have a very good relationship because we believe in them and that they are very committed to our brand, makes us very confident that they will help us grow the brand. Our survey has more than 12 million individual investors who have signed up to join us in the coming months. Frito-Lay, as it stands today, is a very well developed startup and is very profitable. The more we can gather from our customers and investors, the more we hope that they will invest in Frito-Lay and that it will work well with them. We believe that by having an impressive user base, we will grow our business and possibly become a global brand. Sincerely, Rob Gagnon
Frito-Lay is not alone in doing this. The more than one million sales that the company has made since the beginning of its foray into the vegetable dip market between 1990 and 2011, which was based on selling less and selling more, has resulted in an increasing number of new and improved products and has created more opportunities. While we cannot stress this enough, we do believe that in order to become profitable, Frito-Lay needs to be able to scale up a number of key areas. The first and foremost step is, of course, to establish a successful and mature product line to compete with other top level brands such as BKL, KFC, McDonald’s, and Wixi. This new line, which will allow a larger number of employees to access more information and produce more products, is simply the first step of a long working line. However, the company should also develop a plan for the next step as well. The companies in this line have a very different approach to making money, and both may have some very unique or unique ideas, so we are sure that they will be helpful for a short time through our study. One thing we know that is important to take note of is that in the world of Frito-Lay, they are very successful marketers, and the success they achieve depends on their customer base. We think that as many as 35% of Frito-Lay employees are employed in their sales departments, and our survey is very optimistic that these employees will provide many of our main customers with a great experience. If their satisfaction with their business was low, their satisfaction with their clients were high, their satisfaction with the team they work for would be high, and they would be well paid. We could not be more proud of our research team. Even as some of our top sales leaders are very humble, they are also very intelligent by nature. The fact that we do see them have a very good relationship because we believe in them and that they are very committed to our brand, makes us very confident that they will help us grow the brand. Our survey has more than 12 million individual investors who have signed up to join us in the coming months. Frito-Lay, as it stands today, is a very well developed startup and is very profitable. The more we can gather from our customers and investors, the more we hope that they will invest in Frito-Lay and that it will work well with them. We believe that by having an impressive user base, we will grow our business and possibly become a global brand. Sincerely, Rob Gagnon
Nationally, 80 percent ($620 million) of the total dip sales, which is about 775 million dollars, are accounted for in supermarket sales. About 55% of the total sales by supermarkets require refrigeration, and their retail prices were typically in the $0.07 to $0.15/oz. range. In this market the major competitors are Kraft, Borden, regional dairies and store brands. The other 45% of the sales by supermarkets is considered to be shelf stable goods and these are typically sold for an average price of $0.09 to $0.20/oz. The major producers of these products are Frito-Lay and also some regional chip manufacturers.
Sour cream-based dips are the most popular flavor, and it accounts for about half of all total dip sales in the US. But the wholesale price of these products is only $0.09/oz. The second most popular segment of the market, the cheese-based dips, are taking up about 25 percent of the total market. While cream cheese-based dips are the third most popular and they take up about 15 percent of the total sales. Dips are most frequently used with salty snacks, in fact, 67 percent of all dip sales are linked to salty snack usage. On the other hand, only 33 percent of total dip sales are linked to vegetable usage. The growth in the popularity of Mexican foods in recent years has created a huge increase in the size of the dip market.
As big as the market is for dips, there is an increase in market dip substitutes. About 20 percent of the dips used in the US are homemade; nearly as many consumers use refrigerated salad dressings for dips. It is estimated that about 35 percent of refrigerated salads sold in the states is used as dips. It is also estimated that annual sales of the vegetable dip market are about 67 million dollars and the market is growing about 18 percent annually (this trend has been consistent since 1978).
Competition in the dip market is increasing very aggressively, especially in 1984-85. Not only the existing competitors releasing new products, but also many well financed companies, such as Campbell Soup, introduced their dip lines. This data indicated increasing competitors and that leads to increasing advertising expenses, in 1985 the market’s total advertising expense was 58 million dollars which was up 25 percent from the year before.
Frito-Lay, Inc. is a division of PepsiCo Inc. a New York based diversified consumer goods and services firm with annual sales over 8 billion dollars in 1985. Divisions of the parent company also include Pizza Hut, Taco Bell, Pepsi Cola Bottling, Kentucky Fried Chicken, PepsiCo Foods International. Frito-Lay is a nationally recognized leader in the manufacturing and marketing of salty snack foods and their net sales approached 3 billion dollars in 1985.
Frito-Lay’s introduced its first two dips in the 1950’s and they had only three types of dips until 1983. However, during 1983 and 84 many other types of dips were added to their product line, due to the increasing popularity of dips. Prior to 1983 dips line was viewed as a non-promoted profit producer, but that quickly changed with the introduction of cheese dips and other very popular products.
Dollar Sales of Frito-Lay’sв Dip (in Millions of Dollars)Year Mexican Dips($) Cheese Dips($) Sour Cream Dip ($) Total Dips($)1986(forecast) 41 48 10 991985 39 48 _ 871984 40 55 _ 951983 38 5 _ 431982 35 _ _ 351981 30 _ _ 30Frito-Lay distributes its products through 350,000 outlets nationwide. In 1985 34,000 outlets were supermarkets, where majority of the dips were sold. 47,000 other outlets were convenience stores, and 20,000 were nonfood outlets and the remainder 249,000 outlets were small grocery, liquor stores and service stations.
SWOT AnalysisFrito-Lay