PepsiCo Foods SVP talks growth in snacks portfolio: 'We're seeing continued rapid acceleration in multipacks'

17-Feb-2022 - Last updated on 17-Feb-2022 at 16:31 GMT

Mike Del Pozzo, SVP sales and chief customer officer for PepsiCo Foods North America: 'Our multipacks business is our fastest growing brand now for several years in a row now.' Photo Credit: PepsiCo North America

"Always everywhere," has been Frito-Lay North America's mantra for ensuring that its snack portfolio of legacy brands (Lays, Cheetos, and Doritos) and expanding better-for-you set (Baked, PopCorners, and Off The Eaten Path) is accessible to consumers across all channels, a goalpost that's become increasingly difficult to hit even for the $18bn snacking giant, says Mike Del Pozzo, SVP sales and chief customer officer for PepsiCo Foods North America.

"We talk omnichannel all the time, and we think about omnichannel as being accessible and relevant. And we talk about this idea of being available 'always everywhere'. It’s an ambitious goal, but one we believe is going to require us to have the right products but also the right packaging, and the right distribution channels and networks to shop everywhere," Del Pozzo told FoodNavigator-USA.

Just like most food and beverage companies, PepsiCo's Frito-Lay snacks divisions has been dealing with a myriad of supply chain issues from the rising cost of ingredients such as cooking oil to labor challenges.

"We’re certainly not immune to it, and we’re keeping an eye on it every day and trying to take a holistic approach to managing it," Del Pozzo said.

Del Pozzo said that PepsiCo had a made several strategic investments which has allowed the company increased flexibility in its operations and helped to soften the blow of several external factors.

"I think flexibility has been key and speed has been key," said Del Pozzo. "We've made big supply chain investments upstream. We’ve added more regional warehousing, we’ve added fulfillment centers, and we’re working to maximize last mile delivery. We've hired 15,000 frontline employees last year alone."

All of these updates to its business model have helped ensure that a steady flow of products are reaching store shelves and consumers' home through its Frito-Lay DTC site launched in 2020, according to Del Pozzo.

'Our multipacks business is our fastest growing brand'

Despite dealing with several challenging factors to its business, Del Pozzo said that consumers' snack cravings have only accelerated in the past two years driven by a craving for nostalgia from its most well-known brands validated by Frito-Lay's Snack Index research released earlier this month, which found that 62% of Baby Boomers and 46% of Gen X prefer to buy flavors and brands they have known for years.

Concurrently, consumers are also craving functional snacks that offer a sense of permissible indulgence throughout the day, added Del Pozzo.

"Snacking overall remains at an all-time high. Some of that is because of the pandemic, but the reality is it was on a pretty good trajectory prior to and has obviously continued as habits have become pretty sticky," said Del Pozzo.

"That’s really put pressure to make sure we continue to innovate of our core brands and to make sure we continue to leverage innovation."

For instance, Frito-Lay's Simply line offered across its core brands, which are made without artificial colors or flavors, has met both consumers demands for recognizable brands with a clean label nutrition profile.

"Simply is a great sub line across those brands that unlocks healthier snacking. It’s not necessarily geared just to one cohort, and we see a lot of consumer crossover," noted Del Pozzo.

Consumer demand for multipacks has also exploded as consumers have become more prone to buy in bulk for cost-savings while also seeking out new flavors and varieties.

"Our multipacks business is our fastest growing brand now for several years in a row now, so that’s why you see us continue to introduce new flavor options within the multipack. We’ve continued to offer bigger pack sizes anywhere from 18-pack to 40- and 50-pack with variety, which certainly seem to be resonating with consumers," said Del Pozzo.

"The other area where we’re seeing a lot of growth is in rigid packaging (e.g. barrels, canisters, and tins)," said Del Pozzo. "Part of it is the portability component, but it’s also back to that idea of nostalgia."

In terms of new product innovation, Del Pozzo said that the company is leaning into its 'Hot & Spicy' flavor profile available for both Doritos and Cheetos products, and was recently featured in a Super Bowl ad spot.

"It’s really the first time we talked about 'Flamin' Hot' as a portfolio," said Del Pozzo. "Years ago, this flavor started to pick up traction, but it was more geographically or demographically concentrated. Now it’s become almost a generational thing, certainly led by Gen Z, to snack on intense spicy flavors. Now, it’s a top seller in pretty much any store up and down the street."

Reaching consumers 'always everywhere'

To drive its efforts of reaching consumers everywhere and anywhere, Del Pozzo said that the company is continually adapting its omnichannel strategy based on evolving consumer shopping habits across e-commerce, grocery, c-store, and more renewed focus on food service.

"The blurring of these channels has us really seeing increased growth on multipack and big take home sizes. For example, if you think about channels and segments like convenience stores where we used to sell immediate consumption small bags, our big bag is growing double digits in that segment," Del Pozzo noted.

"The other thing we’re focusing a lot of energy on is the foodservice segment as food at home shifts back a bit to away from home. Obviously this puts a lot of pressure on things like small bags, and we’re seeing that multipack segment lead the way in packaging there as well."