Hot Potatoes

With designer spuds and a secret recipe, junk-food giant Frito-Lay has crunched the competition in the race to create the ultimate snack: a low-fat chip that tastes good.

ON A SUNNY NOVEMBER AFTERNOON AT A SMALL LAKE IN Southern California, three supermodels were sitting on a boat dock eating potato chips. “All right, guys, crunch a little louder,” shouted a man holding a clipboard, and the gloriously shaped Vendela, Kathy Ireland, and Naomi Campbell, trying to appear as dignified as possible, stuffed more chips into their mouths. A film crew, a dozen production assistants, makeup artists, hairstylists, and some advertising and marketing executives from Frito-Lay, the biggest snack food company in America, looked on anxiously. “Come on, more passion!” the director urged as he peered into the camera. The supermodels crunched again.

It was the first day of filming for one of the most important television commercials in Frito-Lay’s history—a thirty-second spot introducing Baked Lay’s, which the company says are the world’s first low-fat potato chips that taste like regular potato chips. For the past decade every major American food company has been working feverishly to create a truly great-tasting, low-fat snack that will capture the stomachs of American consumers, whose top concern is now fat intake.

With Nabisco introducing a wildly popular line of low-fat SnackWell’s cookies and crackers and Procter and Gamble pushing to win federal approval of olestra, its breakthrough fat substitute, Frito-Lay is pinning its hopes on Baked Lay’s—the result of a secret three-year research project conducted by scientists at the company’s headquarters north of Dallas. While there are plenty of low-fat corn chips, pretzels, and other snacks, there is no popular low-fat version of the potato chip, which remains America’s favorite snack food. Beginning New Year’s Day, the company will spend $50 million in national advertisements and grocery store promotions exalting Baked Lay’s, which have only 1.5 grams of fat per serving, compared with 10 grams for a serving of regular Lay’s Potato Chips. The company’s marketing team has come up with such offbeat stunts as a potato-laden Rose Bowl float, which will include Vendela, Naomi, and Kathy eating Baked Lay’s and waving at the crowd. The commercials will show the supermodels slipping away to a fishing lake so they can talk about football and home repair and eat as many Baked Lay’s as they want. In another commercial they play poker, smoke ci-gars, and eat Baked Lay’s. At the end of the commercials, the voice-over says, “Now you can eat like one of the boys, but still look like one of the girls.”

Because of test marketing in, of all places, Midland, Texas, and Cedar Rapids, Iowa, Frito-Lay executives have such confidence in Baked Lay’s that they expect national sales to top $200 million by the end of 1996—an unprecedented success for a first-year product in the snack food business. “Never in our history have we done a national rollout of a new product like this one,” says Tod MacKenzie, the company’s vice president of advertising and public affairs. With $5 billion in sales a year, Frito-Lay seems to have an ingenious ability to figure out what Americans crave. It already controls almost 50 percent of the U.S. snack food market. Nearly eight billion bags of Frito-Lay snacks were purchased in 1994: Thirty-two for every person in the United States. According to a survey of the nation’s supermarkets, the seven top-selling brands of snack food are all Frito-Lay products: At the top is Lay’s Potato Chips, followed by Doritos, Tostitos, Ruffles, Fritos, Rold Gold pretzels, and finally Cheetos. Can Baked Lay’s join the list? “Despite all the predictions we’ve made, this is still an enormous gamble for us,” says one company insider. “If this fails, we’ll look as bad as Coca-Cola did when it introduced New Coke. Of course, if this succeeds, then we are on our way to taking over the whole market.”

FRITO-LAY IS HEADQUARTERED IN A LOW-SLUNG COMPLEX IN A remote area of Plano, hidden from the nearby roads and highways. Part of the headquarters is built over a creek that feeds into an elongated man-made lake, and on the grounds are tennis courts and groomed jogging paths. A large fitness center is near the lobby. The complex is the magic kingdom of snacking. There are no union strikes here, no hostile takeovers, not even bad corporate art on the walls. For the aesthetic benefit of employees who spend their days pondering the fate of Chili Cheese Fritos, the company has amassed a startling contemporary art collection, including works by David Hockney, Frank Stella, Jasper Johns, and Julian Schnabel. In the research and development department, preoccupied scientists walk past the famous Richard Avedon photograph of a young man holding a baby upside down.

What strikes a visitor about Frito-Lay is that almost all the vice presidents and senior managers are in their thirties and early forties. They act perky and dress casually. The executives keep bags of chips near their desks, and they snack throughout the day. “If I’m stressing, I eat Fritos or Cheetos,” says spokeswoman Lynn Markley, who is 35. “If I’m having a good day, it’s Tostitos with salsa.”

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