PLANO, Texas — Out-of-stocks are among the most pressing issues facing retailers since the pandemic disrupted the supply chain across the United States and beyond.
New data from Frito-Lay’s Holiday Snack Index shows:
- One-third of adults report having had difficulties finding their favorite food items in the last six months.
- 78% of adults are likely to shop online for snacks this year.
- If a food item were out of stock, consumers would most likely purchase a different size than their normal choice (82%), try a different brand (81%) or go to a different store to look for the item (77%).
This new data, combined with Frito-Lay’s years of consumer experience, is driving innovation for the Plano, Texas-based snack-maker.
“We will continue to invest in the availability, relevancy and breadth of our products, as well as identify more ways to be flexible across our supply chain,” Mike Del Pozzo, chief customer officer of Frito-Lay, told CSP in an exclusive interview. “At the same time, our flexibility and quick prioritization helped us pivot early in the pandemic.”
With the increase in out-of-stocks and supply-chain issues, Frito-Lay is invested in hiring nearly 15,000 front-line sales and supply-chain employees, the company reported, actively filling more than 5,000 roles through the end of 2021. Other investments include new manufacturing lines, warehouse expansions and a better distribution network.
Shopping Behaviors
While the grocery channel has seen the most significant surge in sales, convenience retail has made a comeback with shopping growth in certain segments such as take-home sizes, meat snacks, and nuts and seeds, Del Pozzo said.
On the other side of the coin, with remote and hybrid work and school continuing, more time is spent snacking at home, and consumers are opting for individually packaged snacks that support portion control. Frito-Lay has paired this with data that says 97% of consumers desire two or more categories in multipacks to provide a more personalized shopping experience. “In 2021, we piloted ‘Make Your Own Variety Pack’ offering on [Frito-Lay’s direct-to-consumer platform] Snacks.com, which went viral on TikTok and resulted in 45,000 orders in a single day,” said Del Pozzo.
To this end, strategizing from consumer trends is essential for retailers and consumer-packaged-goods manufacturers to meet consumer needs efficiently.
For Frito-Lay, a unit of Purchase, N.Y.-based PepsiCo, the shift toward online shopping has been an opportunity, Del Pozzo said. The company had a head start, achieving its e-commerce goals four years ahead of schedule, as well as developing Snacks.com in just four months. Snacks.com has allowed Frito-Lay to gain insights from testing innovations in small batches and understanding consumers better prior to delivering on a larger scale, he said.
Strength in Convenience
Even with the quick and powerful emergence of e-commerce, Del Pozzo said he is confident other channels will remain successful. Many c-stores, he said, have adapted to online shopping trends with store apps and partnerships with delivery services, making it easier than ever for shoppers to order online and have products delivered to their door.
Retail’s best strategy will be evolving the omnichannel approach of reaching consumers with different methods of shopping, such as a digital marketplace, enhanced dining options, convenience offerings and pop-up stores within a store. “We will also see the ongoing partnership between retailers and businesses like Frito-Lay to help bring online formats to life, collaborating to fulfill online sales,” said Del Pozzo. “This is all part of what we see as the omnichannel ecosystem: Providing a variety of modes for shoppers to get what they want, when and how they want it, and doing it in a frictionless way.”