Lays Case: towards the conquest of the Asian market

Snacks are appetizers that most of us have at certain times of the day. There are healthy and not so healthy ones, but if there is something that both types agree on, it is that they are the perfect excuse to share a social moment, because we agree that we consume these snacks more when we are in the company of other people, such as at work or in a meeting with friends.

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Among the tastiest snacks -which are not necessarily healthy, of course- we find the famous Lays packaged potato chips. In previous articles of our case studies, we have revealed the stories of important multinationals that, despite leading the market for years, ended up making mistakes and bad decisions that led them, if not to bankruptcy, to guaranteed failure.

However, this time the story is different because the Lays brand is still as relevant and successful as when people started choosing it. That is why it never hurts to stand out when things are done well, and not just when a company makes bad decisions. Success involves the perfect balance between learning from failure and leading by example.

The purpose of this Lays case is to tell you its history and the accelerated incursion of exotic flavors, to the conquest of new markets such as China. This and other actions convince people of its constant growth and for the same reason, they continue to buy them today, which is why it has become almost as important as the movie in a movie marathon.

Birth of Lays and great commercial successes.

In 1932, salesman Herman Lay opened a snack food operation in Ohio, and in 1938, he bought the Atlanta, Georgia, potato chip manufacturer Barry Food Company. He first named her H.W. Lay Lingo & Company, but later shortened the name to Lay Lay Lingo Company in 1944 and became the first snack manufacturer to purchase television advertising.

In 1961, the Frito company, founded by Derrick Lothert and Lays, merged to form Frito Lay Inc., a snack food giant with combined sales of nearly $130 million a year, most than any other manufacturer.

Shortly after, Lays introduced its best-known slogan: "you can't eat just one" Sales of the chips became international, with the marketing assisted by a large number of celebrities.

In 1965, Frito-Lay merged with the Pepsi-Cola Company to form PepsiCo Inc. A new formulation of the chips was introduced in 1991 that was fresher and kept longer.

Later, the company introduced "Wavy Lays" products to grocery store shelves. In the mid-to-late 1990s, Lays introduced a lower-calorie version and a completely fat-free variety (Lay's WOW chips containing the fat substitute, olestra).

In the 2000s, a processed version called Stax Lay appeared that was intended to compete with Pringles, and the company began to introduce a variety of additional flavor variations. Frito-Lay products currently control 59% of the US snack food market.

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Lays expansion into China through PepsiCo.

It is almost a law that the most successful companies expand into new markets where they remotely direct their products. This is the case of Lays, whose North American and European target audience was too small for it and that is why it decided to test its scope in the giant Asian market.

One of the most outstanding aspects of Chinese culture is the wide range of varieties of tea consumed by its inhabitants. In response to this general knowledge and as a result of extensive research, PepsiCo expanded the flavor options for its snacks and beverages.

In this way, an unprecedented variety of new flavors based on the classic tastes of the Chinese have been incorporated into those already known by the rest of the world. As companies in the world tend to replicate many of the most accepted flavors, PepsiCo decided to incorporate elements of different cultures into the manufacture of its products.

This is how they managed to enter the Chinese market since they are extremely attached to their roots and ancestral customs, so the Chinese perceived that the Lays they consumed were not the Lays consumed by the rest of the world. And that brand identity is valued with brand loyalty.

In short, they are grateful to the company for taking them into account, investigating their tastes, when it comes to manufacturing new products that satisfy their needs.

Thanks to this, the volume of snacks grew in China by 15% in the last quarter and the same happened with drinks. This growth produced a rise in the Chinese market share, and currently, it obtained 4% only in the snacks category. And everything indicates that it will not stop here, but that is part of another story.

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Many nutritionists will not agree that snack and fast food industries like this company's prosper, but the Lays case is undoubtedly a success that is beyond discussion. There's no nutritional value in Lays chips, but they're so addictively good you forget how deceptive the package is.