Frito-Lay’s Mike Gervasio discusses the evolution of snacking and how the company’s recently launched pepviz platform is using data to improve snack category performance.
Plano, TX — Frito-Lay is synonymous with snacking with roots in the business date back nearly a century, to the 1930s, when Herman Lay crisscrossed the American South, selling from the trunk of his car what was to become the beloved Lay’s potato chip.
Today, Frito-Lay is a division of PepsiCo and its brands — Lay’s, Doritos and Cheetos — have become icons through the company’s culture of relentless innovation, fortifying our capabilities, and building strong and loyal relationships with our retail partnerships.
The only thing harder than establishing a category leadership position is maintaining it: Frito-Lay strives to anticipate, adapt to, and shape and transform the snack category. Were he still alive today, Herman Lay would be simultaneously baffled and excited by the prospect of filling up his trunk with cases of Lay’s Chesapeake Bay Crab Spice-flavored potato chips or Lay’s Dill Pickle-flavored potato chips — not to mention Cheetos Crunchy Flamin’ Hot Limón or Chili Cheese Nacho-flavored Doritos.
If onlyHerman Lay could see what the future of snacking has in store for consumers, retailers and manufacturers.
The Evolution Of Snacking
Many consumers born in the second half of the 20th century remember how their snacking habits were forged as school children. A snack was served mid-morning, just before or after recess, and again after school, to tide them over until dinner. Those habits, for many, carried into adulthood.
But kids don’t snack that way today. Nor do their parents or grandparents, for that matter. Life got busier, faster and more complicated. And instead of consuming three meals a day, with an occasional snack in between, many Americans now eat in precisely the opposite manner: they snack every few hours, with an occasional sit-down meal.
But today, during a 16-hour day, people consume a wide variety of foods, in smaller portions, everything from rice cakes, granola bars, pretzels, dried fruits, dried meats and others. The main driver for this behavior: convenience.
Consumers’ appetites for snacks — and snack innovation — is insatiable. Today there are approximately 300 billion (yes, billion) snacking occasions that occur annually in the U.S. That means company’s must build snacking portfolios that meet a broader set of consumer needs than ever before.
To ensure Frito-Lay is always evolving its snack portfolio, it sources insights from more places more quickly than ever. We analyze everything from store data to restaurant menus to social media channels, on recipe-sharing platforms, on podcasts and cooking channels, on food blogs and more. This data is then used to build technical briefs that spur innovation and inform in-store strategies that drive traffic and increase conversion.
Last year, PepsiCo launched a proprietary data practice, pepviz, which helps retailers unlock new ways to grow food and beverage sales. Machine learning, AI and other digital insights-gathering tools now make it possible to capture and, more importantly, connect data across entire value chains — from supplier, to retailer, to household-level data, to third-party data providers — offering retailers an exponentially expanded view of their shoppers’ desires.
Pepviz is designed to help retailers win new shoppers, increase trip frequency and loyalty, inspire impulse purchases, improve category performance and boost omnichannel shopping.
To understand the macro-snacking trend, companies have had to become more adept at studying consumer behavior at the micro level. The research methodologies and tools being deployed seek to answer this deceptively simple question: Who is eating what type of snack, on which occasion, and why?
We’re also asking: Do consumers snack the same way every day? Why or why not? How does snacking vary by age, geography, demographics?
Once this data is captured, it is sliced to determine predictable consumption patterns and intersections across multiple snacking categories, sub-categories and snack brands. Similarly, the consumer cohort that eats for energy, not surprisingly, is “always-on.” So, gaining increased visibility into consumer behavior is allowing us to be more predictive and reactive as the category evolves.
As data is captured and analyzed in real time, the patterns being identified and planned against can be disrupted or even derailed instantly. Agility, then, is critical.
PepsiCo is fortunate to have a broad portfolio that can meet consumer demand. For example: plant-based jerky from Planet Partnership, LLC, a partnership between Beyond Meat, Inc. and PepsiCo; Bare Snacks, a line of baked fruit and vegetables snacks; and Gamesa, Mexico’s largest manufacturer of cookies expanding in the U.S. with a strong appeal for U.S.- based Hispanic consumers.
As the portfolio expands, so have the insight solutions. With pepviz, Frito-Lay is able to be much more precise and prescriptive, which enables granular growth. Backed by data, we are sending the right products to the right stores to get in front of the right shoppers. This approach to optimizing assortment gives retailers the best opportunity to succeed.
Mike Gervasio is vice-president, category leadership for PepsiCo, Inc., leading a team of category managers in the U.S. focused on turning shopper/category insights into action at retail. He has spent 23 years at PepsiCo in roles in commercial strategy, insights and co-developing PepsiCo’s Demand Accelerator Function. In 2020, he was named the first official Chairman of the Board for the Category Management Association.