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Frito-Lay’s CMO on the power of Mountain Dew pancakes and DTC

Mac and cheese finds its secret ingredient

Code Red brisket, anyone? To keep up with rapidly changing consumer behaviors, PepsiCo is launching new culinary digital experiences while looking to ratchet up its dual DTC plays.

Mac ‘n Cheetos, Mountain Dew pancakes and Code Red brisket are a sign of the times when it comes to how PepsiCo is engaging with consumers during the holidays. The leading beverage and snacks company today launched a new recipe hub, called MoreSmilesWithEveryBite.com. At the same time, it is planning for more personalized direct-to-consumer (DTC) experiences after e-commerce sales from Snacks.com and PantryShop.com nearly doubled in Q3.

This is a radically different approach from years past when in-store displays and activations anchored the busy holiday selling season. Amid Covid-19, it’s about Mountain Dew and Cheetos holiday cookbooks featuring recipes from the Food Network’s Anne Burell, as well as bolstering PepsiCo’s digital sales.

“We’ve been really trying to understand how consumers are shifting their behavior and how the marketplace is rapidly evolving,” says Rachel Ferdinando, the senior vice-president and chief marketing officer of Frito-Lay North America. “Consumers are changing their shopping habits. They’re buying bigger baskets, and while there’s maybe fewer trips, there’s more migration to e-commerce, so we’re just continuing to evolve.”

This shift in tactics is understandable, but true success lies in how these efforts “pique interest, retain existing consumers and bring in new customers,” says Ken Sadowsky, veteran beverage analyst and US advisor to the global investment group Verlinvest.

“Now it’s ‘Chew the Dew’ not ‘Do the Dew’. Maybe they’re taking this ‘cookies’ thing a little too literally. But seriously, they are looking to interrupt the consumer’s mindset today for the short-term. Moving forward, it will be about how they maintain this attention in the long-term. These tactics are certainly a lot more different than a battleship like PepsiCo would normally come up with. These are interesting times.”

Content marketing with fizz

Today’s consumers expect inspiration and entertainment amid Covid-19, whether through new platforms, content or products, and PepsiCo is responding, per the pitch from PepsiCo’s PR handlers for this story.

Spin or not, Piers Fawkes, founder of Retail Innovation Week and research platform PSFK, says the thinking behind this new era of content marketing is spot on. “It’s critical that brands position their products in exciting new contexts and talk about them in engaging ways. All the better to encourage audiences to interact with your products or brand assets – in the case of Frito-Lay, by creating unusual recipes that can later be shared on social channels. We’re seeing a lot of brands experimenting with different forms and types of content (gaming, digital avatars, how-to's, etc) that present interesting opportunities to drive awareness and sales. It’s only natural that direct commerce is the next evolution of that.”

Ferdinando says PepsiCo's brands are listening to what consumers are saying and responding in kind. “We thought about how we bring these moments of joy during this very tough year.” Through social listening, which has been PepsiCo’s secret weapon of late, the company identified a 200% increase in searches for recipes involving Cheetos, for example. “There were massive increases in searches for our products as parts of meals and recipes,” she says. “That really shifted our consumer engagement strategy to deliver on these desires from consumers and their inspiration and passions for cooking.”

MoreSmilesWithEveryBite.com allows fans to search by holiday and by product, as well as crowd-sourced recipes. It will be promoted via paid and organic social media on all Frito-Lay social channels – specifically YouTube, Facebook, Instagram and Twitter. Promotion includes long- and short-form video, recipe photography and Giphy stickers.

Dollars or data? You decide

PepsiCo has been quick to evolve during lockdown. It launched not one, but two DTC sites in May. The results online and offline have been strong. Overall, it reported organic revenue growth of 6% in Q3, this was due in part to lots of snacking on Tostitos, Cheetos and Doritos. Frito-Lay is looking to keep the momentum going.

Despite its online success, Ferdinando says PepsiCo’s digital storefronts are a work in progress. Snacks.com and PantryShop.com were launched quickly, are evolving and will soon “give consumers even more opportunity to get a more personalized experience”, she says. “We continue to make enhancements. There are new platforms and additions and products coming online, every day, to the site.”

Fawkes says gathering data is as much a key objective as gathering dollars. “In the case of big consumer packaged goods company like Frito-Lay, its DTC approach is likely as much or more a marketing, acquisition and loyalty play as it is a commerce one.”

Frito-Lay’s products “have incredibly thin margins to begin with, and once you factor in shipping it becomes a delicate balance between price and cost,” says Fawkes. ”Brands are cutting into their bottom-line when you consider the costs associated with packing and shipping a single bag of chips.”

Instead, Fawkes says, the idea is to "gain new customers or to further delight existing fans, which means taking advantage of sampling opportunities, limited-edition launches and bundles, and delivering them with a great unboxing experience that people will want to share. The hope is that these unique experiences will translate into recurring revenue through subscription-style offerings and/or convert shoppers at the shelf – both physical and digital.”

No matter what the motivation, families interested in Chester’s Kickin’ Cornbread Dressing or a Smartfood Popcorn Holiday Wreath Cake are in for a treat this holiday season.

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