• by Karl Greenberg , June 9, 2010

Frito-Lay had a big 2009 in spite of -- or maybe because of -- the economy. This year, the company will continue a strategy that moved mountains last year for the Lay's brand by focusing on the local nature of its raw ingredients and the fact that products like Lay's Classic are just potatoes, oil and salt.

The company is also moving 60% of its portfolio to all-natural this year. The effort will continue a branding theme that helped win the company two silver Effies this year for its "Happiness is Simple" campaign, which features real potato farmers whose yield is bought by Lay's for production and retail distribution nearby.

Gannon Jones, VP for portfolio marketing at the Dallas-based PepsiCo division, tells Marketing Daily the focus on local and simple ingredients was partly an effort to change consumer perception, especially as regional and niche competitors from Terra Chips to Cape Cod Potato Chips tout a handmade ethos, or all-natural recipes.

"When we did market research on this, telling consumers that Classic Lay's has three ingredients -- salt, potatoes and oil -- we were amazed to find how few people even knew that. Forty percent didn't realize that Lay's are made with real potatoes."

The company's local-focus campaign last year was "a way to tell the [simple ingredients] story in the most powerful way by humanizing it," says Jones, who adds that Lay's has some 86 potato farmers across the U.S. "It was at the growers convention last year that we first tapped into the idea of giving farmers a voice."

The campaign, which launched during the summer growing season, featured farmers from places like California, Florida, Michigan and Texas telling stories about their farms. The company made creative region-specific -- a spot for New England featured a farmer from Maine, for instance.

The effort, via Juniper Park, Toronto, also included the largest retail push for the company, with in-store materials touting local-grown sourcing. Individual packages also had a "Potato Tracker," a code that could be entered online to find out where the potatoes in that bag came from.

"We grew equity, regard, and household penetration for the first time in five years last year," says Jones. "We grew the business by half a billion dollars." He says the company, which is continuing the "simple ingredients" strategy this year, is promoting its Lay's Kettle Cooked brand. He explains that kettle cooking means the potatoes are more thickly sliced and cooked in kettles instead of on flat surfaces, resulting in 25% less fat and sodium.

It's using Juniper Park to develop non-traditional out-of-home programs like a billboard in San Francisco raised this week that is made of wood, resembling the brand and packaging imagery, that is being hand-carved to bring the message, "All Natural Ingredients, Crafted with Care," into relief.

"The problem was awareness; we were disadvantaged because we had never advertised [Lay's Kettle]. But we launched new packaging this year and have begun advertising for the first time ever and are introducing eight new flavor extensions," says Jones, who adds that the Kettle brand has gained 30% in year-over-year sales and 5% in market share.

At the 42nd annual Effie Awards on Tuesday night, Frito-Lay won four other silvers. Two (Brand Experience and Media Innovation) were for "Only in a Woman's World" via Juniper Park and OMD. The program featured 18 viral videos launched to promote three of its snack product lines to women.

Jones says the videos garnered 20 million video views and were Top 10 viral videos worldwide five times last year. The company also won two Effies for SunChips' conversion of its plant to solar power and of packaging to compostable bags and concomitant marketing via Juniper Park with creative that shows how the bags biodegrade.