A top Frito-Lay exec lays out the biggest trends shaping the food snacks industry — and how the CPG giant is recalibrating to keep up
Speaking at Groceryshop this past week, Mike Del Pozzo, the senior vice president of sales and chief customer officer at Frito-Lay North America, laid out the big consumer changes that are challenging the company. Frequent snacking and a demand for healthier foods and personalization is pressuring traditional CPG giants to evolve, he said. To that end, Frito-Lay is focusing on loyalty, packaging, and e-commerce, and trying to encourage impulse buys. Click here for more BI Prime stories.
The rise of plant-based food companies like Impossible Foods, Beyond Meat, and Oatly show consumer tastes and preferences are rapidly changing, forcing traditional packaged-goods makers like PepsiCo's Frito-Lay to adapt. Read more: 'It's nonpareil': How Swedish oat-milk brand Oatly became the undisputed king of a burgeoning $29 million market through its quirky grassroots approach to marketing Speaking at Groceryshop, a conference for consumer-packaged-goods brands, grocers, mass retailers, and startups this past week, Mike Del Pozzo, the senior vice president of sales and chief customer officer at Frito-Lay North America, laid out how the company was tackling the challenge head-on. The company used to rely on its in-store presence to make sure its products were seen by consumers, but today it's focused on making sure people can get them the way they want them and at the price they want, he said. That's because snacks are replacing regular meals, and people want more flavors and healthier options and serving sizes, like single-size packages. "You'd say, 'Well, that's great for a company like Frito-Lay,'" Del Pozzo said. "But it also puts a lot of pressure on us to make sure we have the right relevant offerings." Frito-Lay is focusing on loyalty, packaging, and e-commerce To that end, Frito-Lay started a loyalty program called PepCoin this month that refunds people up to 10% on the PepsiCo and Frito-Lay products they buy with their PayPal or Venmo accounts. The idea is not just to drum up repeat business but to get people to buy both products together. "That's really helped us think more about the macro," Del Pozzo said. "Think about what we can do together now — the ability to leverage digital to drive that snack and beverage occasion as one company has really been a huge benefit." Frito-Lay has also created e-commerce snack packages for people to send care packages to loved ones in the military or college. Boxed CEO Chieh Huang talked about how the wholesale retailer tested e-commerce packs from PepsiCo's Quaker Oats on its platform. Read more: Amazon competitor Boxed's CEO Chieh Huang takes a thinly veiled swipe at Amazon and reveals how the wholesale retailer is cozying up to CPG giants like Coca-Cola and PepsiCo The company is also pushing people to subscribe to products they buy repeatedly, like Gatorade in the case of parents with student athletes. "Leveraging subscription to drive impulse is a huge opportunity for us," Del Pozzo said. Taking advantage of impulse buys has become a bigger priority for the company overall. The company ran ads for Tostitos that popped up on people's browsers when they searched for guacamole ingredients, for example. Frito-Lay has also become better at using data to target people. Instead of blanketing a geographical area with a single flavor profile, it's personalizing its product selection based on store, ZIP code, and household data. "We think personalization in general is really where folks can differentiate," he said. "So we're using data to help inform the right product on the right shelf. The reality is that Walgreens in Atlanta may be serving a number of different consumers."Join the conversation about this story » NOW WATCH: The top CMOs in the world share the campaigns they wish they had thought of
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