FRITO-LAY TO BUILD UP HEALTHY SNACK LINES

STEPHEN DOWDELL Additional reporting: JAMES TENSER

NEW YORK -- The supermarket industry's flirtation with "better-for-you" salty snacks is poised to become a full-blown affair -- and the match maker is Frito-Lay.

At a press briefing here, the snack manufacturer said it is "redesigning the snack aisles," and will install 15,000 special merchandising fixtures in "50% of the supermarkets in America" to build up the subcategory of fat-free, low-fat and reduced-fat potato chips, tortilla chips and pretzels.

Frito-Lay executives said the company is investing heavily in production capacity and marketing to support the segment, expected to encompass 15 to 20 lines in full distribution by March.

"Better-for-you is our biggest growth opportunity," said Steve Reinemund, president and chief executive officer of Frito-Lay, Plano, Texas. He and other executives said an "unprecedented" emphasis in stores nationwide is key to increasing Frito-Lay's better-for-you sales from $430 million in 1994 to $700 million by the end of this year.

The trade's receptiveness to the idea has so far been "fantastic," said Brock Leach, senior vice president of marketing at Frito-Lay. The firm has been test-marketing items such as Baked Lay's Potato Chips and Baked Tostitos. He said new products comprised 10% of Frito-Lay's growth in 1994, "and most of that was in better-for-you."

The merchandisers, intended for store perimeter locations, include a handful of equipment options such as three-sided end aisle units and shop-around units for power alleys. The merchandisers will feature the better-for-you lines as a separate and distinct segment from regular salty snacks. In some cases, dips will be merchandised in conjunction with the new products.