Portal de Periódicos da CAPES

Doritos: The Dip Desperado Strategy

2013; RELX Group (Netherlands); Linguagem: Inglês

1556-5068

George Rossolatos,

Global Trade and Competitiveness

PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay, and today is a world leader in convenient snacks, foods, and beverages, with revenues of $65 billion. In line with the category’s highly innovation-driven character, PepsiCo’s organic growth targets are geared towards constant product innovation, with view to yielding incremental sales and market share, while increasing the market’s penetration, purchase-frequency, consumption-occasions and average volume per purchase act and consumption occasion. Tom Greco, president of PepsiCo's Frito Lay North America unit, said the company’s “2012 innovation pipeline is absolutely loaded and very incremental”. The increasing importance of the snacks category in PepsiCo’s long-term portfolio strategy is evinced in the company’s long-term growth plan, according to which snacks are poised to overtake beverages, while accounting for 55% of overall revenues by 2021.The UK savory snack foods market rose by 26% between 2007 and 2011 (Keynote Snack Foods Market Report Plus 2012). The UK crisps, savory snacks and snack nuts market is currently worth £2,466 million (Snack, Nut and Crisp Manufacturers’ Association Report, Aug 2 2012). Potato crisps in the UK market are still the most popular product in the snack foods market and accounted for a 48.3% share in 2011 (Keynote Report 2012). Innovation and flavors-proliferation constitute key growth drivers in the fast-paced snacks category.The key brand players in the UK crisps market are Walkers and Walkers Sunbites (PepsiCo), Doritos (PepsiCo), Red Sky (PepsiCo), Pringles (Procter & Gamble), Kettel (Diamond Foods), McCoy’s (United Biscuits), Seabrook (Seabrook), Tyrrells (Tyrrells) The Dormen Crisps (The Dormen Food Company). Walkers Crisps is the UK's best-selling branded snack, with retail sales grossing at more than 1 billion per year for the entire portfolio, based on Nielsen’s annual ScanTrack data for 2011. Doritos is among the top 10 brands in the U.K. Retail Food market, and cherishes high levels of awareness and loyalty. Currently, Doritos' (a brand-name that stems from dorados, 'little bits of gold' in Spanish) major competitor in the flavored chip category is Pringles. According to Adriana Riberio (Marketing Director, Sharing, PepsiCo UK), Doritos’ sales (in value) were growing at a rate of 19.1% year-on-year, adding £21m incremental sales to the category over the past year (Nielsen Scantrack MAT to 23.04.2011). Furthermore, Doritos dips have been leading the ambient dips segment.The key opportunity for Doritos in the U.K. market in 2011 was to maximize combined cross-category sales between Doritos chips and Doritos dips. Whereas in the U.S. market combined sales between the two categories took place in 1 out of every 2 purchase acts, in the U.K. market only 1 out of 10 purchases were combined. Thus, there was ample scope for generating incremental revenues by capitalizing on the benefits of combined chips/dips purchases.