Frito-Lay facts for kids
Logo used since February 1997
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| Subsidiary | |
| Industry | Food |
| Fate | Merged with Pepsi-Cola Company to form PepsiCo, remaining as a subsidiary |
| Predecessors | The Frito Company H.W. Lay & Company |
| Successor | PepsiCo |
| Founded | September 1961 |
| Headquarters |
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U.S.
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Area served
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Worldwide |
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Key people
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Steven Williams (CEO) |
| Products | Snack foods |
| Brands | |
| Revenue | US$15.798 billion (2017) |
| Parent | PepsiCo |
Frito-Lay, Inc. (/ˈfriːtoʊ leɪ/) is an American company that makes and sells many popular snack foods. You probably know their brands like Fritos corn chips, Cheetos cheese snacks, Doritos and Tostitos tortilla chips, and Lay's and Ruffles potato chips. Frito-Lay is a big part of PepsiCo, a huge company that also makes drinks like Pepsi.
Frito-Lay started in the early 1930s as two separate companies: "The Frito Company" and "H.W. Lay & Company." These two companies joined together in 1961 to form Frito-Lay, Inc. A few years later, in 1965, Frito-Lay merged with the Pepsi-Cola Company, creating the company we know today as PepsiCo. Since then, Frito-Lay has been a major part of PepsiCo. It's the largest snack food company in the world, selling its products everywhere. In 2009, Frito-Lay snacks made up 40% of all "savory snacks" sold in the United States!
How Frito-Lay Started
The Frito Company's Beginning
In 1932, a man named Charles Elmer Doolin from Kansas City, Kansas, bought a corn chip recipe. He paid $100 for it, which he borrowed from his mother. Charles started his new corn chip business, called The Frito Company, right in his mother's kitchen in San Antonio, Texas.
Charles, his mother, and his brother made the corn chips, which they named Fritos. At first, they could only make about 10 pounds of chips a day. They sold the Fritos in small 5-cent bags. Each day, they made about $8 to $10 in sales and earned about $2 in profit.
By 1933, they had a new machine that helped them make almost 100 pounds of Fritos a day! Soon, they had production lines in Houston and Dallas. The company moved its main office to Dallas because it was a good central location. In 1937, The Frito Company even opened a special lab to create new products.
The company kept growing. By 1950, Fritos were sold in all 48 states in the U.S. When Charles Doolin passed away in 1959, The Frito Company made over 40 different products. They had factories in 18 cities and employed more than 3,000 people. By 1962, Fritos were sold in 48 countries around the world!
H.W. Lay & Company's Journey
In 1931, a salesman named Herman Lay started selling potato chips from his car in the Southern United States. He began his own potato chip business in Nashville, Tennessee, in 1932. Herman was a salesman for another company, but he eventually took over their Nashville warehouse.
Herman hired his first salesman in 1934. Three years later, he had 25 employees and a bigger factory where he made popcorn and peanut butter crackers. In 1938, Herman bought two factories from the company he used to work for. He borrowed money and moved his main office to Atlanta, Georgia, forming H.W. Lay & Company in 1939.
Herman Lay bought more factories in other cities. In 1944, he changed the name of his potato chips to Lay's Potato Chips. By 1956, H.W. Lay & Company had over 1,000 employees and factories in eight cities. It had become the largest maker of potato chips and snacks in the United States.
The Big Merger: Frito-Lay, Inc.
The Frito Company and H.W. Lay & Company had worked closely together for years. In 1945, The Frito Company gave H.W. Lay & Company the special right to make and sell Fritos in the Southeast.
In September 1961, these two successful snack companies decided to join forces. They merged to become Frito-Lay, Inc., and set up their main office in Dallas, Texas. At this time, the new company was making $127 million a year! Their main brands were Fritos, Lay's, Cheetos, and Ruffles.
Becoming Part of PepsiCo
In February 1965, Frito-Lay, Inc. and the Pepsi-Cola Company announced they would merge. On June 8, 1965, the merger was approved, and a brand new company called PepsiCo, Inc. was formed. When they merged, Frito-Lay had 46 factories and over 150 distribution centers across the United States.
One big reason for the merger was to help Frito-Lay snacks reach more people around the world. Pepsi-Cola already sold its drinks in 108 countries. After the merger, Frito-Lay products quickly spread internationally. In the U.S., Lay's became the first potato chip brand sold in all 50 states in 1965.
PepsiCo also thought it would be a good idea to sell Frito-Lay snacks alongside Pepsi-Cola drinks. The CEO of PepsiCo, Donald Kendall, once said, "Potato chips make you thirsty; Pepsi satisfies thirst." However, a government group later ruled against them promoting the snacks and drinks together.
Growing with New Snacks (1965-1980)
After joining PepsiCo, Frito-Lay started creating many new snack brands. Some popular ones launched in the 1960s and 1970s include Doritos (1966), Funyuns (1969), and Munchos (1971).
Doritos became the most successful new product from this time. At first, people thought the original Doritos were a bit plain. So, Frito-Lay brought them back with new flavors like Taco and later Nacho Cheese. These spicier flavors were a huge hit! Doritos quickly became the second most popular Frito-Lay product, right after Lay's potato chips.
More Growth and New Ideas (1980-2000)
In 1980, Frito-Lay bought GrandMa's Cookies, which became available across the U.S. in 1983. In 1978, Frito-Lay also created Tostitos, a new line of Mexican-style tortilla chips. Tostitos Traditional Flavor and Tostitos Nacho Cheese Flavor were sold nationwide by 1980. Tostitos quickly became one of Frito-Lay's most successful new products, making $140 million in sales. By 1985, Tostitos was Frito-Lay's fifth-biggest brand.
In the late 1980s, Frito-Lay bought Smartfood, a cheese-flavored popcorn brand. International sales also grew a lot during this time. By 1989, sales outside the U.S. and Canada were $500 million, helping Frito-Lay's total sales reach $3.5 billion that year.
The 1990s saw more new products from Frito-Lay. One of the most successful was Sun Chips, a multi-grain chip first sold in 1991. Sun Chips, along with new "Baked" versions of Tostitos and Lay's, showed that Frito-Lay wanted to offer healthier snack options. By 1994, Frito-Lay was selling 8 billion bags of chips, popcorn, and pretzels each year!
In 1996, PepsiCo organized its snack businesses into the "Frito-Lay Company," which had two parts: Frito-Lay North America and Frito-Lay International. Frito-Lay also bought the candied popcorn snack brand Cracker Jack in 1997.
Recent History (2000-Present)
In the 2000s, Frito-Lay continued to grow by expanding internationally and buying other companies. They partnered with companies like Walkers in the UK and Sabritas in Mexico to sell their snacks in more places. Because of these partnerships, some Frito-Lay products, like Doritos, have the same name everywhere. But others, like Lay's chips, are called different names, such as Walkers Crisps in the UK.
In 2001, The Quaker Oats Company joined PepsiCo. This meant that Quaker snack products, like Chewy granola bars and Quaker rice cakes, became part of Frito-Lay North America for a while.
Frito-Lay also kept trying new things with its products. In 2002, they introduced Reduced Fat Lay's and Cheetos, and Baked Doritos. In 2003, they launched their "Natural" line, which used ingredients that were grown organically. These included Organic Blue Corn Tostitos and Natural Lay's Potato Chips with sea salt.
In 2010, Frito-Lay changed the recipe for Lay's Kettle and Lay's flavored chips to use all-natural ingredients. Sales of Lay's potato chips grew by 8% after this change! Because of this success, Frito-Lay announced plans to make about half of all its products, including Sun Chips, Tostitos, Fritos, and Rold Gold pretzels, with all-natural ingredients in 2011.
How Frito-Lay Works
As of 2010, Frito-Lay has factories, distribution centers, and offices in over 40 countries. Their main office for Frito-Lay North America is in Plano, Texas. In North America, Frito-Lay has about 1,830 distribution centers, warehouses, and offices. They also have 55 factories. Steven Williams is the company's chief executive officer.
North America Operations
The PepsiCo Americas Foods group handles PepsiCo's food and snack businesses in North and South America. This group includes Frito-Lay North America, Sabritas, Gamesa, and Latin America Foods.
Frito-Lay North America Inc. is the part of the company that handles creating, selling, and distributing Frito-Lay products in the U.S. and Canada. Its main brands are Lay's and Ruffles potato chips, Doritos tortilla chips, Tostitos tortilla chips and dips, Cheetos cheese snacks, Fritos corn chips, Rold Gold pretzels, Sun Chips, and Cracker Jack popcorn. Frito-Lay sells these products to stores and other sellers. The snacks are moved from Frito-Lay's factories to distribution centers mostly using trucks owned by the company.
Sabritas and Gamesa are two of PepsiCo's food and snack companies based in Mexico. PepsiCo bought Sabritas in 1966 and Gamesa in 1990. Sabritas sells Frito-Lay products like Cheetos, Fritos, Doritos, and Ruffles in Mexico. Gamesa is the biggest maker of cookies in Mexico.
Snacks in Other Regions
PepsiCo also sells Frito-Lay snacks in Central and South America through its Latin Americas Foods division. This includes brands like Lay's, Cheetos, Ruffles, and Doritos, as well as local favorites like Fandangos and Torcida snacks in Brazil (sold under the brand Elma Chips).
In Europe, Frito-Lay snacks are sold under the PepsiCo Europe division. These products include Walkers Crisps, Doritos, Cheetos, and others. PepsiCo has factories in Europe, including two large snack factories in England. In Spain and Portugal, they have a brand called Matutano.
In Asia, the Middle East, and Africa, Frito-Lay products are also growing. While the main global Frito-Lay brands are sold there, many snacks are made to fit local tastes. For example, in India, there's a potato-based snack called Kurkure Twisteez, which comes in popular Indian flavors.
What Frito-Lay Makes
Frito-Lay makes many different snack products, and the types of snacks can change depending on the country. PepsiCo divides its snacks into two main groups: those made in North America and those made outside North America. In some parts of the world, the company's snacks are made under special regional names like Sabritas, Elma Chips, and Walkers.
The main snack brands and products from Frito-Lay include Fritos corn chips, Cheetos cheese snacks, Doritos and Tostitos tortilla chips, Lay's potato chips, Ruffles chips, and Walker's potato crisps (sold in the UK and Ireland as Walkers, and in the rest of Europe as Lay's). Each of these brands made over $1 billion in sales worldwide in 2009!
Frito-Lay also makes many snacks that aren't chips. These include Rold Gold pretzels, Cracker Jack popcorn snacks, and TrueNorth nut clusters. In India, Frito-Lay uses its international brands and also sells Uncle Chipps, a local brand it bought in 2000. Kurkure, an Indian snack made by PepsiCo India, is now also sold in Canada, the UAE, and the Gulf region. In Poland, there's a snack company called 'Star Chips,' and a Polish version of Lay's is also made there.
See also
In Spanish: Frito-Lay para niños
