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Recently
Frito-Lay started a campaign in the US to show consumers
where their bag of Lays Chips was manufactured and even where
the potatoes for that specific bag were grown:
the
Chips Tracker. In the ads, Frito-Lay features
potato farmers growing their chips potatoes in California, New
England, Texas, Michigan and Florida.
 Frito-Lay
has always surprised me in a positive way in how they pick up
trends and implement them, mostly before others do. They truly
behave as a category leader. They are also good in communicating
what they do to their customers and the world at large. Given
their size, this should not come as much of a surprise, they
can afford a good PR team.
Let’s look at Frito-Lay’s record:
Frito-Lay brought “light” (OK, that wasn’t a success), they
brought
healthy oils,
they were
the first to calculate the carbon footprint of potato Chips.
More recently they brought
an entire new frying technology resulting in better low fat
potato chips, they are bringing
energy savings and alternative (solar) energy and
biodegradable packaging. By any standard I would call
Frito-Lay's focus on health and environment an impressive record and not just "greenwashing"
or good PR. Most recently Frito-Lay brought "Locally grown
and produced" potato chips.
However, Frito-Lay's "local" initiative did not get a warm reception
everywhere.
I think the problem is that the ”Local” concept is interpreted
in different ways:
-
If “local” to you also means that farms and processor have
to be small, Frito-Lay, with a global market share of the
snack market of close to 30% does not come close and never
will be a "local" manufacturer. Interesting detail: Did
you notice that the farms profiled in the Frito-lay ads
are NOT small? In fact they all seem large...
-
If you feel that “local” also means that production has
to be organic and in every way sustainable, than most of
Frito-Lay’s farmers probably still have a long way to go.
-
However, if you look at “local” in a more strict sense as
minimizing the carbon footprint and environmental impact
by reducing transportation distances and optimizing logistics,
than Frito-Lay’s Chips certainly fits the "local" label.
Let’s look a bit more in detail at the logistics in the potato
processing Industry. Since we focus on local, let me start by
sharing a well kept secret of the potato processing industry.
ALL potato processors source their potatoes locally, with very
few exceptions. Most potato processing factories are located
right in the middle of potato growing areas. The reason is basic
economics: It is expensive to transport potatoes over long distances.
Furthermore, transportation is detrimental to the quality
of the potatoes, resulting in extra losses during the production
process. There is even an extra advantage if potatoes are processed
within 24 hours after harvest, since any bruising resulting
from harvesting will not develop into black spots.
But the logistics not only comprise the transport of the potatoes
to the factory, there is also the transport of the product to
the consumer. Here we see huge differences between potato products,
mainly based on shelf life and density: Potato starch and dehydrated
potato products like potato flakes and potato granules represent
"potato in its most concentrated form" and are transported all
over the world. Much of the potato starch in North America originates
from Europe and China even found it necessary to
slap an anti-dumping tax on European potato starch to reduce
its import.
Frozen French fries are exported all over the world as well,
but transport and storage is more expensive, since the product
needs to be kept frozen and you are also transporting considerable
amounts of water.
Potato chips on the other hand are not transported too far:
Shelf life is limited and you are mainly transporting air. Risk
of breakage further discourages transportation over long distances.
Compare the location of the French fry factories in North America
(All manufacturers) with the distribution of Frito_lay’s Chips
factories: since frozen french fries can be transported much
easier than potato chips, the french fry factories are located
where it is least expensive to grow the potatoes, while Frito-lay's
potato chip factories (represented by a bag) have a nice geographic
spread to be minimize transportation to all customers.
And this is why most smaller potato chips manufacturers do not
distribute throughout the whole of North America: a small Canadian
Chip company proudly mentioned that they sourced all their potatoes
within 30 kilometers from their factory. Good! In the next sentence,
they announced that they would expand their product distribution
to entire North America…. Ouch!
The conclusion not everyone might like is that large companies
with multiple factories have a definite advantage in optimizing
their product logistics and can be more "local" in the narrow
definition (3) I offered at the beginning.
Case and point made by Frito-Lay in their "Chip Tracker" campaign.
Enjoy reading,
Paul van Eijck
Did you realize we add proceedings, photo's, impressions
and even complete presentations to many of the events that we
have listed in our events section? If not, check it out!
All Events...
The Evolution of Organic Food and Drinks Growth opportunities,
NPD and the impact of the economic downturn
‘The Evolution of Organic Food and Drinks: Growth opportunities,
NPD and the impact of the economic downturn’ is a new report
published by Business Insights that evaluates which regions,
countries and products are expected to grow in the organic market
over the next five years. This report provides an understanding
of underlying consumer purchasing triggers as well as an in-depth
analysis of NPD to assess current and future trends in organic
food and drinks.
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Snack Food Processing
This book is the definitive book on developing, preparing and
processing shelf stable savory snacks. Chapters cover a wide
range of topics, including ingredients, raw materials specifications,
equipment, materials handling, sensory evaluation and quality
control methods, and the preparation and processing of specific
snack products.
Read more...
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Buy a smart spud now in the PotatoPro Store and optimize
your equipment before next harvest!
French Fries and Potato Specialties
Chips and Snacks
Potato Starch
Other Potato Products
Ingredients for Potato Processing
Processing Equipment
Potato Supply Chain
QSR Restaurants
Health and Nutrition
Energy and Environment
Food Trends
Givaudan SA
Givaudan is a leading supplier in the fragrance and
flavour industry with a rich heritage. In 2008, the company
achieved sales of CHF 4,087 million, with a work force of 8772 employees
and subsidiaries in 46 countries. |
Switzerland |
Savoury Flavours Ltd
Savoury Flavours Ltd provides a flexible
and responsive alternative to the large multi-national flavour houses;
delivering innovative and competitive savoury flavour solutions,
with a personal touch, to large and small food businesses alike. |
United Kingdom |
Parker Domnick Hunter
Parker Domnick Hunter provides filtration,
purification and separation solutions. |
United Kingdom |
Food Processing Suppliers Association (FPSA)
The FPSA (Food Processing
Suppliers Association) is the largest U.S. association of suppliers
of equipment, ingredients and services to the global food, beverage
and pharmaceutical processing industries. |
United States |
Rosenqvists Food Technologies
Rosenqvists Food Technologies is
a Swedish company offering complete solutions - from process design
to manufacturing and installation - for processing lines for potato
chips, french fries, snacks and other potato products. |
Sweden |
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