Frito Lay Case Study

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History of the Frito-Lay’s Company :

In 1932, two young entrepreneurs independently began to operate two separate companies that were thousands of miles apart. (Elmer Doolin & Herman W. Lay of Nashville)

1. The Frito Company

In 1932, Elmer Doolin started doing business in a small San Antonio cafe and purchased a bag of corn chips to eat with his sandwich. Mr. Doolin set his new business venture in his mother's kitchen. Because there was no money for hiring employees, his family helped him. In 1933, the fritos production was increased by designing a "hammer" pres and the company continued to expand. In 1945, as American returned to peace-time, the country exposed a huge demand, booming population.In order to meet it, The Frito Sales Company was established, which separated sales from production activities Expansion by the Frito National Company continued with the issue of six franchises in 1945. The first of the FRITOS® franchises was offered to The H.W. Lay Company of Atlanta, GA., and would be the start of a partnership that would change consumption patterns of American people. Its first public stock was issued in 1954, with sales that year reaching $21 million.

“Mr. Doolin changed a small, kitchen-operated business into a multi-million dollar company. At the time of his death in 1959, The Frito Company produced over forty products, had plants in eighteen cities, employed over 3,000 people, and had sales in 1958 in excess of $50 million. Today, FRITOS® Corn Chips rank among the top 10 salty snacks in the United States.”

2. The Lay Company

In 1932, Herman W. Lay started his potato chip business in Nashville. His job is to sell and make deliveries for the Barrett Food Products Company by his Model A Ford touring car.Later that year, he took over Barrett's small Nashville warehouse as a distributor role. The job included only commisision on sales , not a salary. As his territory expanded, his profits arise. He bought the Barrett Food Company’s plants and change the company name into “H.W. Lay Co., Inc.” on October 2, 1939.

3. Frito-Lay, Inc. Is Formed

In 1945, the Frito Company approved H.W. Lay & Company an exclusive franchise to manufacture and distribute FRITOS® Corn Chips in the Southeast. As the two companies worked toward national distribution, a close interdependency developed which eventually brought fort a merger. “In September 1961, just 29 years after the founding of both companies, The Frito Company and H.W. Lay & Company merged to become Frito-Lay, Inc., the largest snack selling company in the United States.”

4. Frito-Lay and Pepsi Join

In February 1965, the merger of the two companies was planned by the Board of Directors for Frito-lay, Inc. and Pepsi-Cola .On June 8, 1965, the merger of Frito-Lay and Pepsi-Cola Company was granted by shareholders of both companies, and a new company called PepsiCo, Inc. was formed.

5. Frito-Lay Today

“Today, Frito-Lay has more than fifteen $100 million brands: LAY'S®, FRITOS®, CHEE.TOS®, BAKEN-ETS®, RUFFLES® DORITOS®, FUNYUNS®, TOSTITOS®, BAKED LAY'S®, WOW!®, SUNCHIPS®, MUNCHIES®, OBERTO®, ROLD GOLD®, GRANDMA'S® Cookies and Quaker Chewy Bars®, Quakes® and Fruit & Oatmeal Bars®. “ Frito-Lay, Inc., a division of PepsiCo, is the largest and fastest growing snack food manufacturer in the United States. The company sells 8 of the 10 top snack chip brands and sell 600 pounds of Lay's chips every minute. Frito-Lay holds leading market share in all major snack chip categories. Frito-Lay holds a 60% share of the core salty snack food market with sales totaling over $13 billion annually. Frito-Lay's sales account for over half of the sales of snack chips in the U.S. Frito-Lay accounts for 65% of PepsiCo's profits. 15,000 salespeople and distribution system reaches 400,000 retail, vending and food-service accounts worldwide.Today, with a team of more than 44,000 employees and 33 manufacturing facilities in the U.S., help of sales...
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