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The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part 4: Frito-Lay’s Dirty Little Secret

Monday, July 20th, 2009

lays_logo In Parts 1 and 2, we saw how the marketers behind Frito-Lay’s “Lay’s Local” ad campaign are trying to persuade us that Lay’s® Potato Chips are part of the local food movement because the potatoes are gown by “local” farmers and are made into potato chips local processing plants. We also saw how the Lay’s marketers cleverly don’t define what they mean by “local” so that we consumers will read our own definitions into the term.

In Part 3, we saw that while Lay’s Potato Chips are manufactured locally, you really can’t consider their potato chips as part of the local food movement for several reasons. First, Frito-Lay is the $12 billion snack food unit of PepsiCo, which is an international company whose corporate headquarters are in Plano, Texas. Second, Frito-Lay owns the local processing plants that turn the so-called local farmers’ potatos into Lay’s Potato Chips. Third, the money Frito-Lay earns from processing the potatoes into Lay’s Potato Chips doesn’t stay in the plants’ communities, but goes to corporate headquarters in Plano, Texas.

Frito-Lay’s Dirty Little Secret

classic_chips_01 But in all their talk about Lay’s Potato Chips being part of the local food movement because their chips are made locally, the marketers behind the “Lay’s Local” ad campaign have been keeping a dirty little secret from of us. What’s that secret? Simply this: Almost all potato chips are made locally! That’s right. As far as their being made locally goes, Lay’s Potato Chips are no different from the chips made by just about every other potato chip company.

But don’t take just my word for it. You can check it out for yourself on PotatoPro.com, which published an article in its June 10, 2009 newsletter entitled “Frito-Lay offers local potato chips.” The article states that “ALL potato processors source their potatos locally, with very few exceptions.” And then the article goes on to say that

Most potato processing factories are located right in the middle of potato growing areas. The reason is basic economics: It is expensive to transport potatoes over long distances. Furthermore, transportation is detrimental to the quality of the potatoes, resulting in extra losses during the production process. There is even an extra advantage if potatoes are processed within 24 hours after harvest, since any bruising resulting from harvesting will not develop into black spots.

The article also says that potato chips have to be distributed locally for two reasons. First, the chips are extremely fragile and can break easily when they are transported over long distances. And second, potato chips have a short shelf life. So the sooner you can get the chips to the stores, the better chance they have of being sold before their expiration dates expire.

Frito-Lay’s Reduced Carbon Footprint

The article also recognizes three definitions of “local” for making potato chips:

The potatoes are grown by small-scale farmers and processed in small-scale processing plants.
The farms grow their potatoes organically in a totally sustainable way.
Transporting the potatoes to nearby processing plants reduces the carbon footprint made by the trucks.

The article admits that Frito-Lay doesn’t meet the first two definitions, but says it does meet the third.

But does it really?

frito-laytruck1 I think not because the article doesn’t consider the huge carbon footprint created by the industrial farmers who produced the potatoes that are processed in the nearby Frito-Lay plants. For example, consider the carbon footprint created by Walther Farms on its 14,000-acres of potato farmland in six states and one foreign country. These industrial farmers use tons of patroleum products in farming their 14,000 acres — from fertilizers to pesticides to insecticides. Because their operations are highly mechanized, they rely heavily on gas-powered machines instead of manual labor to sow, reap, and process their potatoes before shipping them to the nearby Frito-Lay processing plants.

The actual carbon footprint of the trucks that transport the potatoes from farm to plant might be small, but the carbon footprint the farmers create before they can bring those potatoes to the trucks is gigantic.

In 2007, Frito-Lay controlled over 60% of the salty snack food market in the United States, and took in over $12 billion in sales. Lay’s Potato Chips accounted for around $2.8 billion of that $12 billion. You can hardly call a company that size “local” or its potato chips local.

Not matter how the Frito-Lay’s marketers try to cut it, Lay’s Potato Chips are definitely not local and Frito-Lay and its potato chip snack food are definitely not part of the local food movement.

Lay’s Potato Chips and Regional Potato Chips

But plenty of locally and regionally made potato chips still exist today (although more and more of them are being goggled up by large companies and losing their local or regional statuses). The companies that make these potato chips actually are part of the local food movement. They are small companies — many family owned. They buy their potatoes from local farmers and turn the potatoes into chips at local plants. and they sell their potato chips locally or regionally. So you know that when you buy their potato chips, your money is really staying in your community — not going to Frito-Lay corporate headquarters in Plano, Texas, or to the corporate headquarters of some other multi-national conglomerate.

rustys_chips Take Rusty’s Potato Chips, for example in California. Rusty and his son make their chips by hand — 10,000 bags a week instead of the 10,000 an hour that Frito-Lay makes. They don’t use a conveyor belt, put the chips in the bag by hand, and also seal each bag by hand. They sell their chips in selected stores in southern California and in Nevada. For the past five years, Rusty’s Island Chips have consistently placed a “strong second” in the annual Who Makes the Best Potato Chip contest.

If you want to try some of Rusty’s Potato Chips, you can buy them online. We did. List night, while Lisa was looking over my draft of this post, she ordered a box. We’re going to do a blind testing and compare Rusty’s chips to Lay’s. We’ll let you know whose chips win.

dakota_chips Another brand is Dakota Style Chips, which are made by a small company in South Dakota that has a total of 12 people working in it. These potato chip makers cook their chips open-kettle style in single batches and then season the chips by hand.

If you want to try some Dakota Style potato chips, you also can order them online.

sterizings Currently, the third generation of family owners is making Sterzings Potato Chips. The workers still cook their chips single batch at a time the same way they did in 1933 when the company was founded. Their immediate market of this Iowa-based company is southeast Iowa, but they also ship their chips all over the country and abroad — especially to military personnel in Iraq and Afghanistan.

You can order some of their chips online yourself and try.

deep_river_snacks Those of you on the East Coast can try potato chips made by Deep River Snacks, a small family-owned company in Old Lyme, Connecticut. You can order their chips online, too.

Personally, if I have the chance to buy genuine locally or regionally made chips instead of Lay’s, I’ll jump at it. You should, too. You’ll notice a big difference in both quality and taste. Plus you’ll be supporting your local community — not some distant, faceless, multi-national corporation that’s not really interested in you or your coummunity, but in “the bottom line.”

The Truth about Frito-Lay’s “Lay’s Local” Marketing Campaign — Part 1

Wednesday, June 17th, 2009

If you’ve driven through Michigan lately, you might have noticed a billboard along the side of the road that displays an unusual ad for Lay’s® Potato Chips that says, “Proudly Supporting Local Michigan Farmers.”

Lay's Billboard Ad -- Photo Courtesy of Rick McOmber

The message seems a contradiction in terms. Frito-Lay North America, which is the snack food unit of PepsiCo, brings in $12-billion in sales and buys much of its raw materials from industrial farms. Yet Lay’s Potato Chips is trying to convince consumers — that is, you and me — that it is actually part of the local food movement with its new “Lay’s Local” marketing campaign.

The “Lay’s Local” campaign is the second phase in Lay’s strategy to reposition its Lay’s Potato Chips brand of snack food. Lay’s launched the first phase, called “Happiness is Simple,” in early 2009. “Happiness is Simple” focused on people’s nostalgia for the simpler times that seemed to have existed before today’s complex economic problems developed. The campaign sought to make a connection between this nostalgia and Lay’s Potato Chips’ “place in Americana” and the potato chips’ “role in bringing people together for life’s simpler pleasures.”

Today people are not just interested in simpler times, but in eating food that is locally grown. As a result, the local food movement has become stronger and stronger. The marketing people at Frito-Lay aren’t slouches. They’ve seen how this movement is spreading and want their snack food to become part of it. As a result, they’ve devised a marketing campaign that appeals to our increasing desire to buy and eat foods that are locally grown.

Lay’s Marketing Campaign

On May 12, 2009, Lay’s announced the second phase in its repositioning strategy, the “Lay’s Local” marketing classic_chips_01 campaign, to persuade us that the potatoes used in Lay’s Potato Chips are locally grown and that the chips themselves are locally made. By connecting its potato chips to local communities, Lays hopes to make us think that the Lay’s Potato Chips brand of snack food is “closer to home than people might expect.” Lay’s also wants us to believe that when we buy a bag of Lay’s Potato Chips, we are investing in our local communities.

To add weight to it’s marketing pitch, the campaign emphasizes that Lay’s receives its potatoes from over 80 farms in 27 states. In 2008, these farmers grew over over 2.8 billion pounds of potatoes for Lay’s. In addition, the campaign stresses that Lay’s makes its chips at Frito-Lay plants in 18 states throughout the country, from East Coast to West Coast.

Lay’s also is trying to show its connection to local communities by participating in over 50 local-market events such as the Maine Potato Blossom Festival and the Hall of Fame Parade in Canton, Ohio.

The Chip Tracker

Lay's Chip Tracker

Any good marketing campaign tries to encourage its target audience to become actively involved so they’ll buy into the message. To encourage us potato chip eaters to become involved in “Lay’s Local,” Lay’s put a Chip Tracker on its home page. When you enter your

Product Code

ZIP code and the first three digits from the product code on your bag of chips, the Chip Tracker tells you where the chips in the bag were made. “Chances are, it may be closer than you think.”

Unfortunately, the Chip Tracker doesn’t tell you the “local” farms the potatoes that were made into the chips in your bag came from.

Hiring Extra Help

This marketing campaign uses a wide range of advertising: national and regional TV ads, country-wide print ads, messages on the bags of potato chips, and 40,000 in-store displays that are customized for each state.

And Lay’s isn’t just relying on its own marketing people to convey their local food message, either. To help deliver the word, Lay’s is using four high-powered PR and marketing firms:

For advertising and in-store marketing — Juniper Park, which believes that “positioning doesn’t matter if you haven’t taken a position first”
For buying media — OMD, which believes “in the power of ideas to deliver compelling business results”
For events — The Marketing Arm, which “builds brands by engaging consumers through emotionally-powerful platforms”
For public relations — Ketchum, which “specializes in corporate and product positioning”

Obviously, this is an expensive campaign. In fact it’s the largest one that Lay’s has ever conducted. When asked how much the campaign cost, though, Dave Skena — who is Frito-Lay’s vice president of marketing — refused to say how much money had been budgeted for the campaign.

Local Farmers from Local Farms

The campaign, which started on May 18, features farmers from five “local” farms that supply Lay’s with potatoes for making chips: farmer

Brian and Gary Walther of Walther Farms in Three Rivers, Michigan
Brian Kirschenmann of Kirschenmann Farms in Bakersfield, California
Darrell McCrum of the Maine Potato Alliance in Mars Hill, Maine
Jack Wallace, Sr. and Jack Wallace, Jr. of Jack Wallace Farms in Edinburg, Texas
Steve Singleton of Singleton Farms in Hastings, Florida

The actual kick-off for the campaign began on May 12, when the farmers went to the New York Stock Exchange and rang the opening bell. Gee, how many local farmers have the financial or political clout to do that?

In Part 2, I’ll talk about what it means to buy local and how the “Lay’s Local” marketing campaign takes advantage of the ambiguity of that concept.

Unchained in America