Frito Lay - Chip Market Segmentation

Re-evaluate Frito-Lay’s chip market segments to help maintain the lead in the consumer chip category.

Frito-Lay currently dominates the chip category.  And the category itself is thriving too. Nearly nine in ten adults in the US have reported at least one purchase of chips in the past three months. 

Potato and tortilla chips have generated solid growth in recent years, driven by the increasing prevalence of snacking, a steady stream of new flavors, and the category’s status as a permissible indulgence. Frito-Lay’s current portfolio offers a variety of chips appealing to an array of preferences.

However, due to people becoming more and more concerned with the health implications of what they consume, and the growing popularity of “indie” or “craft” style chip brands who are following these current trends, Frito-Lay faces a growing threat they need to address to ensure they maintain their domination.

We conducted several different types of research including: social listening & secondary research, in-depth interviews, man-on-the-street interviews, and used this along with existing market research to guide our qualitative survey.

Through the results of our research, we  were able to define five distinct segments of consumers in the chip market that could help Frito-Lay determine their communication strategies and advertising campaigns moving forward.