Frito-Lay will more than double its marketing spending as it repositions its top brands to better compete more broadly across the snacks industry.
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| Quaker ads play up health message |
That means another $100 million or more for advertising (including multi-cultural ads), plus added spending for consumer promos and non-media elements, such as the text-messaging and online overlay to Doritos’ current “If not now, when?” ad campaign.
Frito-Lay wants a bigger share of the $90 billion “macrosnacks” segment, which includes cookies, crackers, candy, yogurt and more. Frito-Lay has a 15% share of that industry now, Frito-Lay Chairman-CEO Irene Rosenfeld told analysts last week. The new strategy moves Frito-Lay beyond the $15 billion salty-snacks segment (where it holds a 65% share). Heavier ad spending brings a halo to the whole portfolio, Rosenfeld told analysts.
The Plano, TX-based company will focus on its seven $1 billion-plus brands: Lays, Doritos, Tostitos, Quaker, Cheetos, Ruffles and Fritos. The brands will be repositioned with new ads and packaging; some target a new audience and new eating occasions.
Lays will target families (instead of young men) with a “Moments of simple joy” brand positioning (replacing its “Irresistibility” stance). Cheetos is positioned as “The recess of snacks”; Doritos becomes “The alpha snack!”; and Tostitos is pitched as “The connections creator,” competing with “social snacks” and not just tortilla chips. Rosenfeld showcased new ads for analysts last week.
Quaker adopts a health and wellness positioning that takes advantage of consumers’ perception of Quaker as one of the healthiest snack brands. New packaging and ads “re-embrace our Quakerness,” Rosenfeld said.
Frito-Lay also plans to leverage its direct-store delivery system, improve productivity and add line extensions that widen its top brands’ presence across all snack segments.
The new marketing strategy builds on strong two-year growth: Frito-Lay’s revenues hit $9.6 billion in 2004, up 5.6% from $8.6 billion in 2002—and besting snack and cereal competitors Kellogg, Hershey, General Mills and Kraft.
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