Frito-Lay

For the chips synonymous with the company, see Fritos and Lay's.
Frito-Lay North America
Type Operating Division
Founded 1961
Founder(s) The Frito Company
H.W. Lay & Company
Headquarters Flag of the United States Plano, Texas, USA
Key people Albert P. Carey
President and CEO
Industry Food
Parent PepsiCo, Inc.
Website Frito-Lay America

Frito-Lay North America (FLNA) is a division of PepsiCo, Inc. which manufactures, markets and sells a variety of corn chips, potato chips and other snack foods.

FLNA is headquartered in Plano, Texas, a suburb of Dallas. The company's current form is the result of a 1965 merger of Frito-Lay, Inc. and the Pepsi-Cola Company, which resulted in the formation of PepsiCo, Inc. Products sold under the Frito-Lay name are now recorded by two PepsiCo divisions: Frito-Lay North America (North American sales) and PepsiCo International (international sales).[1][2]

Contents

The Frito Company

Elmer Doolin, the operator of the Highland Park Confectionery, purchased a corn chip recipe, 19 retail accounts and a potato ricer for $100 from a local manufacturer in 1932. Doolin established a new corn chip business, The Frito Company, in his mother's kitchen. Doolin, his mother and brother produced the corn chips, named Fritos, and had a production capacity of approximately 10 pounds per hour. Doolin distributed the Fritos in 5¢ bags. Daily sales totaled $8 to $10 and profits averaged about $2 per day.

In 1933, the hourly production of Fritos increased from 10 pounds to nearly 100 pounds due to the development of a "hammer" press. By the end of the year, production lines were operating in Houston and Dallas. The Frito Company headquarters also moved to Dallas to capitalize on the city's central location and better availability of raw materials. In 1937, The Frito Company opened its Research and Development lab and introduced new products including Fritos Peanut Butter Sandwiches and Fritos Peanuts to supplement Fritos and Fritatos Potato Chips, which had been introduced in 1935.

In 1941, the company opened its Western Division in Los Angeles with two sales routes, which would become the prototype for The Frito Company's distribution system. In 1945, The Frito Sales Company was established to separate sales from production activities and meet the demands of an expanding population. Expansion by the Frito National Company continued with the issue of six franchises in 1945. In 1950, Fritos were sold in all 48 states.

The Frito Company issued its first public stock offering in 1954. At the time of Doolin's death in 1959, The Frito Company produced over forty products, had plants in eighteen cities, employed over 3,000 people and had sales in 1958 in excess of $50 million. By 1962, Fritos would be sold in 48 countries.

H.W. Lay & Company

In 1932, Herman W. Lay began a potato chip business in Nashville, Tennessee. Lay was hired as a salesman for the Barrett Food Products Company, an Atlanta, Georgia manufacturer of Gardner's Potato Chips and eventually took over Barrett's Nashville warehouse as a distributor. Lay hired his first salesman in 1934 and, three years later, had 25 employees and a larger manufacturing facility where he produced popcorn and peanut butter sandwich crackers.

A representative of the Barrett Food Company contacted Lay in 1938, offering to sell Barrett's plants in Atlanta and Memphis for $60,000. Lay borrowed $30,000 from a bank and persuaded the Barrett Company to take the difference in preferred stock. Lay moved his headquarters to Atlanta and formed H.W. Lay & Company in 1939. Lay later purchased the Barrett manufacturing plant in Jacksonville, Florida, and additional plants in Jackson, Mississippi, Louisville, Kentucky and Greensboro, North Carolina. Lay retained the Gardner trademark of Barrett Food Products until 1944, when the product name was changed to Lay's Potato Chips.

Lay expanded further in the 1950s with the purchase of The Richmond Potato Chip Company and the Capitol Frito Corporation. By 1956, with more than 1,000 employees, plants in eight cities and branches or warehouses in thirteen others, H.W. Lay & Company was the largest manufacturer of potato chips and snack foods in the United States.

Frito-lay, Inc. and PepsiCo, Inc.

In 1945, the Frito Company granted the H.W. Lay & Company an exclusive franchise to manufacture and distribute Fritos in the Southeast. The two companies worked toward national distribution and developed a close business affiliation. In September 1961, The Frito Company and H.W. Lay & Company merged to become Frito-Lay, Inc.

In February 1965, the Board of Directors for Frito-lay, Inc. and Pepsi-Cola announced a plan for the merger of the two companies. On June 8, 1965, the merger of Frito-Lay and Pepsi-Cola Company was approved by shareholders of both companies, and a new company called PepsiCo, Inc. was formed. At the time of the merger, Frito-Lay owned 46 manufacturing plants nationwide and had more than 150 distribution centers across the United States.

Today, PepsiCo is organized into four divisions: Frito-Lay North America, PepsiCo Beverages North America, PepsiCo International and Quaker Foods North America.[2] Although products sold in the United States under the Frito-Lay brand name are also sold internationally, international sales are reported by the PepsiCo International division.[1]

Manufacturing

United States

Canada

Products

Frito-Lay's product line includes such brands as:

as well as several varieties of salsas, dips, crackers, Nuts, and seeds.

Foreign subsidiaries

Controversy

Frito Bandito

In 1967, the company introduced a cartoon spokesman, the Frito Bandito, which was criticized as a Mexican stereotype. The Frito Bandito wore a sombrero and bandoliers, had a handlebar moustache and brandished pistols. Protests from advocacy groups such as The National Mexican-American Anti-Defamation Committee (NMAADC) prompted some initial concessions, such as the removal of the pistols and a thinning of the accent. In January 1971, however, the NMAADC, in conjunction with other advocacy groups, launched a $610 million lawsuit ($100 for each American of Mexican descent) for "malicious defamation" of their ethnicity.[3] The Frito Bandito was replaced that year by The Muncha Bunch, and then again by a new cartoon called W.C. Frito (based on W.C. Fields).

Use of genetically engineered crops

Frito-Lay was named as one of the "Frankenfoods 15" in a campaign boycotting genetically engineered crops organized by the Organic Consumers Association (OCA).[4] In late 1999, Frito-Lay asked its suppliers not to use genetically engineered corn. A similar announcement followed in early 2000, when the company asked its farmers not to grow genetically modified potatoes. Frito-Lay stated these requests were made in response to consumers' worries, and not in response to protests by the OCA, Greenpeace or other groups.[5] Greenpeace and the Union of Concerned Scientists applauded the decision, but The American Farm Bureau Federation accused Frito-Lay of "caving in" to anti-biotech activists.

References

  1. ↑ 1.0 1.1 Yahoo Finance: Frito-Lay, Inc. Company Profile
  2. ↑ 2.0 2.1 SEC: PepsiCo, Inc. 2006 Form 10-K
  3. ↑ Toonpedia - The Frito Bandito
  4. ↑ Organic Consumers Association - What Can We Do?
  5. ↑ Frito-Lay takes stand against genetically altered corn

External links

PepsiCo, Incorporated
Corporate Directors:
Indra Nooyi (Chairman and CEO) · Robert Allen · Dina Dublon · Victor Dzau · Ray Hunt · Alberto Ibargüen · Arthur Martinez · Steven Reinemund · Sharon Rockefeller · James Schiro · Franklin Thomas · Cynthia Trudell · River King
Brands:
Pepsi · Tropicana · Frito-Lay · Quaker Oats · Gatorade
Annual Revenue: $35.1 billion USD (▲16% FY 2006) · Employees: 168,000 · Stock Symbol: NYSE: PEP · Website: www.pepsico.com