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The Rise of Lay's Chips: From Humble Beginnings to Global Domination
Welcome to the Growth Stories! Today we're taking a trip down memory lane to explore the origin story of one of the most popular snack brands in the world: Lay's Chips!
It all started with a young man named Herman Lay, born in 1909 in Charlotte, North Carolina. After dropping out of college during the Great Depression, he worked for the Bartlett food company where he began experimenting with potato chips. In Nashville, Tennessee, Lay began to sell bags of potato chips to his customers as a traveling salesman. He latched onto an innovation that allowed potato chips to be sealed in wax paper bags and become portable snacks. And so, Lay's Chips were born!
The Rise of Lay's Chips
After purchasing the Barrett food company with stock sales, Lay renamed it HW lay distribution Co and sold Lays chips for 10 cents a packet. Lays became popular due to their crinkle cut ruffled chips which were less likely to break inside the package. They also became the first snack food company to advertise on television in 1944.
Flavored Potato Chips
Lay's began producing flavored potato chips, including salt and vinegar, which became some of their most popular products. This innovation helped catapult the company to a new level where its competitors were left behind.
Frito-Lay Merger
Frito Company was a huge competitor outselling Lays by 30 percent. Instead of waging war, Herman Lay orchestrated a deal that merged the two companies to make Frito-Lay creating the First National American brand. After the merger in 1961, Frito-Lay quickly released a range of new chips including many now iconic brands like Doritos, Funyuns, Munchos, and Pringles.
PepsiCo Merger
In 1965, Herman lay met with businessman Don Kendall about another potential merger, this time it would be with a beverage company. At the time Kendall was CEO of Pepsi Cola which had been around since 1868 and developed a variety of drinks including Mountain Dew, Diet Pepsi, and 7UP. Their chief competition was Coca-Cola and Pepsi was eager to try and build itself an edge. The merger consolidated power and Frito-Lay continued to function as a subsidiary of Pepsi.
Innovation and Expansion
A large part of Lay's Chips success comes from their ability to innovate new flavors. There are country-specific and region-specific flavors that cater to local tastes which is why there are now over 200 varieties of Lay's chips ranging from Nori seaweed to baked scallop. The company even offers up to $1 million for contestants who submit great new ideas, and their head flavor researcher is an OP restaurant Chef. Lays moved into international markets where Lay's chips were renamed walkers in the United Kingdom, Smith's in Australia, Sabritas in Mexico, and Gypsy in Egypt.
Herman Lay turned to philanthropy later in life, establishing the Lay's scholarship in hopes that he would help another entrepreneurial young mind create the next sensation.
And there you have it, the story of Lay's Chips from its humble beginnings to its global expansion and continued success.
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