Amazon.com’s acquisition of Whole Foods is coming at just the right time for Frito-Lay, the snack giant known for Doritos, Ruffles and Funyuns.
The PepsiCo division has versions of 11 core chip brands without artificial ingredients — including Lay’s, Tostitos and Cheetos — and aims to break out of the traditional snack aisle and get into organic grocery stores. The lineup, marketed under the name “Simply,” meets all the criteria needed to be sold in Whole Foods, according to PepsiCo executive Jonathan McIntyre.
It’s all part of a push to build a more healthful reputation for Frito-Lay brands, a significant undertaking at a company famous for bright-orange cheese powder. Natural products are the biggest source of growth for the industry right now, said McIntyre, who oversees research and development for PepsiCo’s snacks. And Frito-Lay sees an opportunity to reach new customers — and charge higher prices — by targeting organic-food shoppers.
There’s also more pressure to get a foothold at Whole Foods during a time when Amazon is threatening to upend the supermarket industry. The e-commerce site is using the grocery chain to support its food-delivery business and looks to take market share by cutting prices and integrating online and offline operations. But the big enticement at Whole Foods remains the promise of healthful and wholesome products.
“The notion of clean and simple is very important to a segment of consumers,” Frito-Lay Chief Marketing Officer Jennifer Saenz said in an interview at the division’s headquarters in Plano, Texas. “They’re searching for that.”
The main question is whether Whole Foods will be an ally in helping Frito-Lay establish good-for-you credibility. So far, the chain hasn’t shown signs of embracing Doritos and similar brands, which some shoppers consider junk food. But Amazon’s takeover of the grocery chain could bring an opportunity to make inroads.