Food & Drinks

Fritos Anyone? Why The Fourth Of July Weekend Will Be Good For Salty Snack Makers

Covid-19 has a significant impact on consumer habits and has forced marketers to adjust in multiple ways. With travel restrictions easing across the U.S., marketers now need to adjust to an environment where consumers are more mobile again. Findings from Frito Lay’s latest U.S. Snack Index survey reveal some key market trends. To analyze these trends and Frito-Lay’s strategies for addressing them, I interviewed Mike Del Pozzo, Frito-Lay’s Chief Customer Officer. The three trends discussed below illustated some broad lessons for the field.

1)     Consumers will be “catching up” on travel and other types of consumption this summer

Americans are attempting to catch up on activities that were missed out in 2020. Frito-Lay’s data shows that more than half (53%) of U.S. adults plan for this year’s holiday weekend is different than last year, with almost two-thirds (62%) planning to spend time outside the home. In addition, The U.S. Snack Index reveals that while the majority of adults (63%) anticipate snacking “about the same,” 23 percent of adults plan to snack more this 4th of July compared to last year. Generation Z (34%) and Millennials (37%), are the cohorts that have the highest percentage of consumers who indicate they will snack more. As CCO Del Pozzo observes, “As mobility returns, we are continuing to see a theme that we saw emerge at the start of summer– consumers are fitting two summers in one (people are snacking more)…and are eager to celebrate with family and friends.”

Frito-Lay’s data suggests that Americans are looking forward to a very festive four-day holiday weekend. Forty-three percent of adults intend to watch fireworks and 36 percent will go to an outdoor barbecue, while just a third are planning to stay home and celebrate with family and/or household members.

The projected high snacking level during the holiday weekend bodes well for Frito-Lay as salty snacks have been the number one food contributor to sales growth at retail. In general, many familiar “comfort foods” appear to have done well during the pandemic. Del Pozzo notes, “During the pandemic, consumers were looking to Frito-Lay snacks to enjoy at home. We’re fortunate to have a portfolio of brands that already had strong consumer loyalty prior to the pandemic, and Frito-Lay’s vision to always be everywhere is what keeps our snacks in 94 percent of households.”

2)     Consumers now expect products to be available where and when they want them

Del Pozzo believes that the single most important trend Frito-Lay has needed to respond to during the pandemic is changes in shopping patterns in terms of time and place. “The biggest change is how consumers shop and the convenience they expect to receive products when and where they want it, he says,” he says, “These changes made it imperative to offer consumers the options to buy online, pick up curbside or delivery, or in store. We do not anticipate these consumer shopping behaviors slowing any time soon.”

Frito-Lay’s survey finds that since Covid restrictions have eased, 41 percent of Americans say their snack shopping habits have changed. While one-third are shopping more for snacks online, most adults are still shopping for their summer snacks in-person, at the store (84%), as in-person retail remains strong. However, going forward, additional growth of e-commerce sales are expected—Frito-Lay has seen explosive growth in eConvenience/rapid delivery, with sales now being ten times what they were at the beginning of 2020.

Del Pozzo relates that a key part of Frito Lay’s response going forward it to be strive to make the product conveneint to obtain stating, “For Frito-Lay, our DSD model has kept up our strong presence in stores while eCommerce has accelerated and we anticipate it to double by 2025. Overall, eCommerce remains a strong channel, with online snack sales up approximately 47 percent year-over-year. He further articulates the strategy as follows: “As part of our ‘Always, Everywhere’ vision, we’re in all places, making sure we are in the channels consumers are shifting to. As proof, we created, which allows consumers to create their very own variety packs according to their taste and preference and have them conveniently delivered to their home.”

3)     While familiar products were popular during the pandemic, going forward innovation will be necessary

In some ways, the pandemic has favored products that are familiar to consumers. The Frito-Lay Snack Index suggest that classic flavors and salty snacks (as opposed to sweet or new flavors) will dominate Fourth of July celebrations as more than half of adults plan to stock up on them. If the pandemic and associated restrictions continue to ease, however, it only makes sense that consumers will return to looking for variety and innovation. Indeed, the Snack Index survey finds that three in five (59%) adults say they are looking for healthier snack options.

 Del Pozzo emphasizes that Frito-Lay recognizes the need to innovate. He cites a trend toward more demand for spicer flavors, especially among young consumers. “When looking at our data year-over-year for the U.S. Snack Index, we saw 7-point shift (or a 28 percent increase) in summer flavor preferences, away from the classics and more toward new, spicy and bold flavors. Frito-Lay has therefore created multipack snacks options to satisfy our consumers and has launched occasional snacks that give our consumers the taste that they’re looking for during special moments throughout the year.”

Del Pozzo also states that the company created the platform so that consumers can create their own variety packs according to their taste and preference and have them delivered to their home: “Innovation is key to our business. As we continue to be close to our consumers’ preferences and be attentive of how products will be available, we’ve developed new flavors including Lay’s Flamin’ Hot, Doritos Xxtra Flamin’ Hot Nacho and more.”

As demonstrated above, Frito-Lay’s strategy is effective in using data to follow and adapt to both short-term and long-term trends quickly—and in a way that serves the consumer.

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