PepsiCo, known for its popular snacking brands like Doritos and Fritos, is strategically channeling resources into its smaller snacking offerings to tap into a niche market of health-conscious consumers. Rhasheda Boyd, the Vice President of PepsiCo’s better choice snacking portfolio, emphasizes the company’s commitment to scaling these smaller brands quickly, viewing them as a priority for growth.
Managing around a third of PepsiCo’s U.S. snacking brands, Boyd oversees products such as SunChips, PopCorners, Stacy’s pita chips, Bare baked fruit and coconut snacks, and Off the Eaten Path vegetable crisps. Although these brands haven’t reached the billion-dollar mark like Doritos and Cheetos, they are experiencing rapid growth, generating about $1.5 billion in revenue annually.
In the most recent quarter, PepsiCo reported that smaller, emerging brands like PopCorners, SunChips, and Miss Vickie’s achieved double-digit net revenue growth. While PepsiCo’s snacking business is dominated by Frito-Lay and Quaker Oats, contributing over $26 billion in North American sales, the company acknowledges the importance of smaller brands in diversifying its snacking portfolio.
Boyd acknowledges that widely available favorites like Doritos will receive a significant share of investment for innovation and marketing. However, PepsiCo recognizes the unique role played by its smaller brands in attracting and retaining consumers, offering a diverse portfolio that caters to varied food consumption needs, including healthier options.
The company’s observation that a significant portion of Sun Chips is consumed with meals has led to strategic placements in outlets like Subway, alongside other health-conscious options. Niche brands like Off the Eaten Path and Bare address the demand for better-for-you offerings, aligning with modern consumer trends.
Frito-Lay is taking a targeted approach to promote these niche brands in locations such as health clubs and national parks, where consumers tend to adopt a healthier lifestyle. Despite having fewer consumers, these brands offer an opportunity to drive awareness at a lower promotional cost.
Analyst Brittany Quatrochi notes that PepsiCo’s smaller brands, growing faster due to their size, provide a valuable platform for the company’s expansion. The emphasis on better-for-you snacks aligns with PepsiCo’s Pep+ sustainability initiative launched in 2021, reflecting the company’s commitment to meeting a broad spectrum of consumer needs in the snacking sector. Boyd emphasizes the importance of having a diverse portfolio that caters to varying consumer preferences, from indulgent treats to more nourishing options.