Snack Chat

My Final Thoughts for 2008

2008 has been a real roller coaster, but fortunately, I think the highs outweigh the lows. For me -- and likely many of you -- the low point was the decline in the stock market. I wish I’d paid attention to writer and commentator Kevin Phillips (no relation) back in April when he predicted the mess in the financial markets in “Bad Money.” At the time, everyone thought he was a wild pessimist, only to find out he was a wild realist. 

Warren Buffet recently said on the Charlie Rose Show that in the stock market there are first innovators, then imitators and finally idiots.  That hurts, since I’ve got at least one foot in the idiot camp.

On the upside, in 2008, Janis and I welcomed to the world our third grandson.  It was particularly miraculous since our daughter-in-law had serious medical complications, was on bed rest for several months, and for a while it was touch and go.  But mother and baby are doing just fine, thank you.  We periodically baby sit, and having grandchildren is truly a great blessing.  It’s a blast to spoil them and then just send them home.

The other high point has been in my professional life, where I’ve seen how well Frito-Lay has navigated through the rocky shoals of our economy relative to other companies.  Our CEO, Al Carey, has mapped out a vision called “Inspire Well-Being” with specific plans for improving our Products, Partnerships, Planet and People, really helping us stay above the water and continuing to grow and bring healthier products to the market, while taking steps to become “greener.”

The vision is clearly resonating with our people -- a recent employee survey showed a significant increase in approval ratings for the company, which is great to hear. I’ll talk more about our vision next year.

So as the door closes on 2008, I say good-bye with mixed feelings.  The stock market was a roller coaster, but that seems unimportant compared to the joy of having a healthy new grandson and working for a company that continues to meet and beat the challenges in our uncertain economy.  What are your closing thoughts on 2008?

Why I think TrueNorth will beat the odds

You’ve probably heard the statistic that less than 10 percent of new products are successful, and after 30 years at Frito-Lay, I’ve seen a lot of new products come and go.  Earlier this year, Frito-Lay introduced TrueNorth, a line of nut snacks that I believe will end up a winner, because they combine great products with a passionate purpose.  But 2009 will be a critical year for their survival.

The first new product I launched was Doritos, Fritos and Cheetos in canister packaging back in 1984.  Miraculously, they’re still around.  Truth in lending, I also was involved in a number of other new products launches in the 1980s that, thankfully, are long forgotten, including a trio with the crazy names of Rumbles, Stuffers and Topples (try and guess what those products were!).

Based upon my experience, TrueNorth has the right recipe for success.  They start with all natural nuts and mix them into innovative crisp and cluster forms.  The target is baby boomers, who are passionate consumers of nuts because of their nutritional benefits, and surprisingly, have few food brands targeted directly at them. Once consumers try TrueNorth, they come back for more.  They have strong repeat rates and a high level of compliments on our consumer hot line.

My wife, Janis, and I are part of the boomer target, and we’re hooked.  On Friday nights we’ll sit on our porch and snack on True North pistachio crisps and Sabra hummus with a glass of red wine.  It’s just another advantage of being an empty nester.

However, many brands like TrueNorth have a solid first year, only to fall into the abyss in the second year.  It’s the job of Michelle Rule, Marketing Director for TrueNorth, to make sure that doesn’t happen.  She’s a high-energy marketer who has climbed Mt. Kilimanjaro, spent two years heading up a Frito-Lay regional sales office to build her general management skills, and balances work with her home life raising twin boys.

“To be successful long-term, TrueNorth has to emotionally connect with consumers,” Michelle says.  To do that, TrueNorth is creating a stage for people to tell their “true north” stories,” describing their passions in life, and how those passions help others.  At first I didn’t think consumers would respond, but I was wrong. 

“Over the last three months, nearly 1,000 people have sent us their stories,” Michelle says.  “I’m surprised at how many people are willing to share their most intimate experiences.”  The program is also getting favorable buzz in the blogosphere.

So will TrueNorth nuts succeed in 2009?   I think so: Michelle and her team have the perfect target, and their efforts to connect emotionally with consumers seems to be working.  You’ll begin hearing the “true north” stories at the Oscars on Feb. 22, and there’s other programming in the works to grow awareness of the brand.  I’ll keep you posted as 2009 progresses.  Please share with me what you think it takes to make a successful brand, especially for boomers.

Why 90 Percent of U.S. Households Eat Frito-Lay Snacks

My friends find it hard to believe that 90 percent of households in the United States eat Frito-Lay products.  Our snacks are totally discretionary – nobody needs them, unlike some categories like toilet paper, which has 99 percent household penetration.

So how do you account for our snacks’ popularity, especially now when consumers are watching every penny and many are changing their eating habits?  I think the reason dates back to our co-founder, Herman Lay, who believed that our mission was to deliver a consistently great eating experience in every bag and every bite.  He established our corporate purpose as:

“To provide the consumer at all times with products of the highest quality and value.”

I met Herman Lay 30 years ago when I was a young lawyer at Frito-Lay.  I don’t remember many of the specifics, but I clearly recall how I felt.  He was kind and gracious, and made me feel as if I was going fishing with my grandfather.

We’ve tried to remain true to Herman Lay’s original mission.  A major step in the right direction was when we improved the nutritional attributes of our big brands like Lay’s and Doritos by switching to healthy oils and eliminating trans fat in our chips.  Can you believe it’s been five years since we did that?

Nutritionists praised the action, but we did not do a good enough job telling the story to consumers.  As a result, today approximately 80 percent of consumers mistakenly think that Frito-Lay chips still contain trans fat.   Pass it on – they do not!

So, we’ve started telling you the truth about our snacks -- they’re made from real ingredients from the earth and produced through simple processes.  Many people are surprised to learn that original flavors of Fritos and Lay’s are made with only three simple ingredients – corn or potatoes, healthier oils and salt.

We believe that in 2009 more people will be eating at home, and we want to become even a greater part of your lives. As we strive to reach even more households, we’ll continue to improve our core brands and tell consumers our story.  We’ll offer new healthier snacks.  And we’ll introduce a new line of “value snacks” to address economic conditions.

I look forward sharing specifics about our 2009 plans in future blogs, and I invite you to share with us: What constitutes quality and value in today’s world?

Welcome to Snack Chat

Welcome to Snack Chat, the new Frito-Lay blog. I hope you will find it interesting and you will add comments and offer feedback to help make it a success. I'm Dave Philips, your Snack Chat chief blogger.

As I start writing my first blog entry, I feel the same anxiety and nervousness I did in sixth grade, standing on the edge of the high diving board at the public pool in Wheaton, Ill., trying to decide whether to jump into the water or crawl back in disgrace.

I’ve worked at Frito-Lay for 30 years, and have been fortunate enough to see my career take several twists and turns. I started as an attorney in the Law Department, moved into our Research & Development department, and for the last 20 years have been in Marketing. But writing a blog is a radical departure.

I was asked to serve as the Chief Blogger for Snack Chat because my colleagues felt that my experiences at Frito-Lay and passion for the business were a good fit for providing a balanced view of the company. I’ve found in my life that every time I tackle a new career direction, it creates a lot of stress, but at the same time leads to the greatest personal growth. Plus, I am about to retire, and in these tough economic times, it’s nice to have a side gig -- and the extra money doesn’t hurt. So I said yes.

In the last few months I’ve researched corporate blogs to better understand what works and what doesn’t. Every corporate blog has its own distinct personality, and the better ones share three common traits:

First, the better blogs focus on content people want to hear about. Companies like General Motors and Dell have popular blogs because people are inherently interested in cars and computers. When people find out that I work at Frito-Lay, the first thing they ask me is, What new products are you introducing?” People are also very interested in what we doing for the sustainability of our planet. And people want to know what we are doing for our employees to develop them and build their careers. So I will tackle these and a wide range of other topics on this blog. Please let me know what topics you would like to discuss too.

Second, the better blogs are conversational. Nobody wants to read dry “corporate speak.” It may play well in the boardroom, but readership will pretty much be confined to corporate executives. Frito-Lay’s tagline is “Good Fun” and so our blog will reflect our casual, free-spirited, fun personality. I was told that I should even occasionally try to be “funny,” which I’m thrilled about, since I now have an outlet for my jokes.

Third, the better blogs are concise. We are all time-starved, and my goal is to get to the point clearly and quickly. I plan to write two blog posts a week, which should allow me to cover a wide range of topics in a concise manner.

I welcome your ideas for content and other feedback about Snack Chat as we get this Frito-Lay blog up and running. Please join me by jumping in – the water’s fine! - Dave