Exclusive: PepsiCo to bring iconic chip brands into new snacking categories in 2023
PepsiCo’s portfolio of iconic snack brands such as Doritos and Cheetos has carved out enviable niches in the salty chip category. Now, the food and beverage giant's Frito-Lay division is betting it can expand its dominance in snacking by bringing these and other brands into new categories such as pretzels, crackers and beef jerky starting later this year.
“The question in our mind is how far do these brands stretch,” Parth Raval, chief growth officer for PepsiCo Foods North America, said in an interview. “We have strong reason to believe that our brands play in multiple domains and we want to ensure that every time there’s a snacking occasion that the shopper is looking to Frito-Lay.”
PepsiCo’s snacking business is composed mostly of Frito-Lay and Quaker Oats, which together generated nearly $21 billion in sales in North America during the company’s 2021 fiscal year — accounting for a little over a quarter of the CPG’s $79 billion in global sales.
But while the company continues to innovate with new flavors and packaging formats, PepsiCo is thinking broadly in terms of how consumers view its brands. It’s among the leaders in the $115 billion snacking category where it competes with other manufacturing juggernauts such as Mondelēz International, Hershey and Campbell Soup.
Last year, PepsiCo brought Doritos into the dip category with Spicy Nacho and Cool Ranch Jalapeno. The offerings are positioned to be used with foods beyond chips, including pizza, wings and veggies. The company also announced it would sell, starting in 2023, bite-sized versions of its classic Doritos, Cheetos and SunChips snacks, in canisters conducive to sharing with friends or eating on the go.
A key part of this strategy is to bring its chip offerings — a staple of parties, school lunches and quelling late-night hunger — into other snacking arenas. PepsiCo wants shoppers to associate Doritos, Fritos and Cheetos, for example, as brands with multiple ways to consume them rather than solely as chips, Raval said.
Raval added that PepsiCo is looking into rolling out a cracker product with one of its major chip brands, the company’s first foray into the space, as early as the second half of this year. He declined to outline what brand or flavors would be used for the launch.
The multi-billion cracker category, which is led by brands such as Cheez-It, Goldfish and Ritz, has thrived as consumers have replaced the traditional three daily meals with more frequent bouts of snacking. A cracker would be a logical extension for a brand viewed as a salty snack, Raval said.
Later this year, PepsiCo also plans to debut Cheetos-flavored pretzels, tapping into the earlier success it had when it launched Cheetos Popcorn nationally in early 2020, the executive said.
PepsiCo also plans to build on its partnership with jerky maker Jack Link’s by bringing the Doritos flavoring into the meat category. The two companies, which first struck a distribution deal in 2009, plan to introduce Jack Link’s jerky with Doritos Spicy Sweet Chili, and potentially other flavors, in 2023 as part of a co-branding deal.
“There's a master brand here called Doritos that has the ability, credibility to extend into other parts of the snacking universe that makes sense,” Raval said. “This is going to be an example of how you start to expand out in concentric circles from your core into other areas and see how high is high.”
The product would provide PepsiCo with a way to tap into growing consumer demand for healthier proteins and meat-based snacks with unique flavor profiles, Raval noted. He added that Jack Link’s is likely “just the first step” of PepsiCo’s presence in animal-based protein.
“We've got a lineup planned in the meat-based arena that ... has shown tremendous progress in the last couple of years and will continue to grow,” Raval said. “When you bring a massive brand like Doritos to this space, we believe that it will really continue to catapult the category’s momentum.”