FRITO-LAY MAPS LOW-FAT, IN-STORE PLAN

JAMES TENSER

NEW YORK -- Frito-Lay will place off-shelf display racks in 15,000 supermarkets this winter as part of a massive marketing push behind its low-fat, better-for-you snack foods.

The Dallas-based company is driving hard to put the display units -- three-sided "maximizers" for end-aisle locations, shop-around "opportunity centers" for power alleys and other smaller versions -- in stores in time for a March-April multibrand promotional event, said Steven Reinemund, Frito-Lay president, in an interview here.

Those displays are designed to carry a range of reduced-fat or fat-free line extensions of its existing Frito-Lay snack brands, including Baked Tostitos tortilla chips, Baked Lays potato crisps, Baked Sun Chips, Reduced Fat Ruffles, Low-Fat Doritos, Smart Food popcorn and Rold Gold pretzels, as well as Mexican-style dips and salsa. Some of those products are already in national distribution, others are now being test-marketed.

"This is how we intend to own fun foods in the low-fat arena," Reinemund said.

He added that the better-for-you promotion event will de-emphasize deals and instead focus on product sampling at about 10,000 stores (one to two days each), and in-store promotion vehicles including Actmedia Instant Coupon Machines. It will be backed by an umbrella of national media advertising.

Frito-Lay's experience with better-for-you snacks has been so promising, Reinemund said, that he expects many retailers will accept the displays on the basis of anticipated full-margin category growth, rather than short-term deal incentives.

"We are not price-promoting this heavily," said Brock Leach, senior vice president of marketing. "In pretzels, where there is more competition, there will be some price deals. In Baked Tostitos, none."

Reinemund said Frito-Lay's display goal represents penetration of 50% of the supermarkets in America. The in-store marketing strategy calls for carrying the better-for-you snack brands in a common section "to focus consumers' interests and alternatives." The displays will be serviced through the company's store-door delivery system.

"Better-for-you is our biggest growth opportunity," he added. "Last year the segment's growth in pounds was close to 15%." In 1994, Frito-Lay sold $430 million worth of better-for-you products, primarily Baked Tostitos and Rold Gold pretzels.

By comparison, said Leach, the total salty snacks category grew about 3% last year to about $11 billion. "Better-for-you snacks are underdeveloped," he said, citing syndicated data tracking the total better-for-you grocery segment. In 1993 better-for-you products accounted for $18 billion in retail sales, roughly 25% of supermarket packaged food sales. In snack foods, such products accounted for just 4% of sales in 1993.

Frito-Lay projects that retail sales of its better-for-you products will reach $700 million in 1995, and $1.2 billion in 1996, he said.

Leach said the company anticipates the reduced-fat and fat-free snack business will be a primary driver of company growth in coming years, and he stressed that this will happen without cannibilization of Frito-Lay's primary brands.

"This business is incredibly incremental," he said.

Added Reinemund, "The introductions haven't impaired our existing business. Our base business is also growing. That's the advantage of introducing the new products under the base brands." Leach said that Frito-Lay's 1995 better-for-you marketing plan is centered on value, variety and visibility. "Value equals taste in better-for-you," he said, adding that products such as Baked Tostitos and Baked Lays shine in consumer preference testing compared with competitors' products.

On the visibility front, in addition to the display space, the new products will share a graphic on the upper part of the bags: a stylized sun, printed on a green field. Leach said Frito-Lay consumer research has affirmed green is becoming the industry standard color for low-fat designation.