Chipping Away at Slowing Sales
Frito Lay, the snack foods arm of PepsiCo, is the largest seller of snack foods in the world, selling more than $11.5bn-worth of snacks every year, which accounts for 40% of savory snacks sold in the US and 30% of savory snacks in the non-US market.
Yet in the mid-2000s, the company’s US market share was under attack – in particular in convenience stores, a distribution channel where Frito Lay traditionally reigned and where the company’s products commanded as much as 80% of shelf-space. In particular, the Lay’s potato chip brand was struggling with declining sales and low loyalty. To combat these issues, Frito Lay engaged Vivaldi Partners to help reposition Lay’s in a way that would make it relevant again for consumers.
The work we did with Vivaldi was such a game changer for how we thought about our business. It was hard work, but we were able to translate it into a strategy that was motivating and inspiring so that the rest of the organization understood the practical applications. It was a model for really thoughtful planning and analysis of a portfolio of brands.Marissa Jarratt, Senior Director, Global Marketing, PepsiCo
Get Your Smile On
In order to better understand what was behind these market trends, we embarked on a tour of four of the company’s biggest markets and met and observed consumers with vastly different economic and psychographic profiles. Some of the people we spoke with were big snackers, others were selected for their adoption of cutting edge food trends. Some were mindless munchers, and others were deeply involved in their food and snacking choices. We issued eating journals and sat down with people in their kitchens to discuss their daily activities, behaviors, needs, wants and motivations, as well as the context in which these happened.
What became clear through our research was that Lay’s existing value proposition was too functional; Lay’s positioning around the slogan “Betcha can’t eat just one” focused on taste and ingredient quality – rather than what it brought to the consumer. It didn’t help that this phrase wasn’t a favorite of the FDA, for enticing people to increase their portion size. As a result, Vivaldi Partners repositioned the brand around the idea of “Get your smile on,” a new proposition focused around creating moments of enjoyment and happiness for consumers, accessed via Lay’s potato chips. We focused communications on these small moments of joy, adapted messaging to reflect the positioning and developed a series of activations to bring the message to convenience stores across the United States.
Conducting in-situ research to listen to and observe consumers with a trained eye is priceless. If you want to add value to someone’s life you need to understand how they live, what they do and why they do it.Agathe Blanchon-Ehrsam, CMO, Vivaldi
Cashing in Lay’s Chips
Lay’s refreshed brand positioning program was highly successful; over the nine months following implementation of the new positioning, sales increased by almost 20%, with significant increases in loyalty and equity scores – all achieved without an increase in media spending. Now THAT is something to smile about.
Vivaldi Group went on to work for many years with the Frito-Lay organization, on topics as diverse as brand architecture, strategic portfolio roles, new brand development, and communication strategies.
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