How PepsiCo adapts to keep pace with food innovation

As consumer habits and preferences quickly change, even industry stalwarts such as PepsiCo’s Frito-Lay division have had to change their ways, too.

While the snacking giant behind Doritos and Fritos always incorporated consumer feedback into its product development, the company would typically reach out only a few times during the process, such as when it was assessing potential flavor options or testing the final product.

But the rapid pace of innovation and an ongoing push for new flavor and product experiences have necessitated building a deeper connection and establishing more frequent contact with people who purchase its products. Today, Frito-Lay welcomes consumers into its centers and sends out recipes and food for feedback to people — encompassing at least 1,000 individuals each week — as it innovates new and existing products.  

“It’s more about … putting the consumer at the center. We have a better handle on what they want because we’re always in constant dialogue and discussion,” Denise Lefebvre, senior vice president of R&D at PepsiCo Foods North America, said. “Because you’ve gotten this feedback all along the way, your risk profile probably does decline.” 

PepsiCo’s snack and food division develops the connection with consumers before even launching a product.

To kickstart the development of a new offering, Frito-Lay uses a plethora of tools. It employs artificial intelligence to uncover keywords on social media, monitors global and local trends, collects feedback from an 800-number and talks with shoppers participating in panels about how they view the company’s brands and what they expect from them.

The food company is in frequent contact with shoppers during the early stages of product development, when it creates the snack and then when it makes changes based on their feedback.

During the peak of development, it’s not uncommon for the Texas-based division to talk with consumers every few days. In some cases, people are brought into Frito-Lay’s R&D facilities to work directly with its chefs and packaging engineers, and chefs regularly engage with consumers online to develop a recipe.

“It’s always on and always iterative, versus a one-time-only engagement or very sequential engagement,” Lefebvre said. “That’s quite a bit different” from the past.

Such information can be vitally important in product design, especially when a flavor like barbecue can mean different things to people (the sweet versus savory ratio) or when certain geographies have their own specialty (Carolina versus Korean). In addition to using its chefs, Frito-Lay often taps into the expertise and insight of cooks outside the company and supplier partners — such as those who deliver ingredients like spices and grains — to ensure the CPG giant understands the segment.

As Frito-Lay develops new flavors, it stores them in what it calls a “flavor vault.”

The depository includes thousands of ideas, including those that didn’t work out, flavors not yet ready for prime time or ones being considered for another brand. The flavor vault, which is accessible to R&D teams around the globe, allows workers to see what has been discovered in other parts of the world that also might resonate with consumers in other regions.

Flavor development, Lefebvre said, also is determined by the brand. Doritos and Ruffles, which are popular at parties and family gatherings, are more likely to get bolder flavors, for example. In contrast, Lays, which tends to be paired with a meal, is better positioned for a more subdued flavor palate so it doesn’t overwhelm the food. Similarly, Quaker Oats’ sweet spot is in breakfast, leaving it more likely to incorporate traditional options like blueberry or peanut butter.

Lefebvre, a CPG industry veteran who had a six-year stint at Cadbury before joining PepsiCo in 2006, said the pace of innovation and change infiltrating the food space has surprised even her.

“Ten years ago I would have said, ‘You know, it can’t get more complex,’ but it has. I don’t think I would have predicted it, but it’s a really exciting opportunity,” she said. “I like being on the bleeding edge and testing and learning new things so we can really deliver.”