Cassies 2008 Cases Brand/Case: Best Snacks on Earth

Winner: Canadian Success Outside Canada—Silver

Client Credits: Frito-Lay North America Jaya Kumar, Chief Marketing Officer

Gannon Jones, VP Marketing Becky Frankiewicz, VP Portfolio Marketing

Julie Saliba, Brand Manager Erol Tan, Associate Brand Manager

Melissa Mrozek, Associate Brand Manager

Agency Credits: Juniper Park Jill Nykoliation, President

Catherine Marcolin, Group Account Director Tracy Little, Senior Account Director

Krysten Cooper, Account Director Jamie Sutherland, Account Executive Terry Drummond, Creative Director

Alan Madill, Creative Director Barry Quinn, Creative Director

Andy Linardatos, Associate Creative Director Hylton Mann, Associate Creative Director

Crossover Notes: All winning cases contain lessons that cross over from one case to another. David Rutherford has been identifying these as Crossover Notes since Cassies 1997. The full set for Cassies 2008 can be downloaded from the Case Library section at www.cassies.ca Crossover Note 1. What a Brand Stands For. Crossover Note 2. Brand Truths Crossover Note 10. Conventional Wisdom—should it be challenged? Crossover Note 11. The Eureka Insight. Crossover Note 20. Emotional versus Rational. To see creative, go to the Case Library Index and click on the additional links beside the case.

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EXECUTIVE SUMMARY Business Results Period (Consecutive Months): January 2008 – April 2008 Start of Advertising/Communication Effort: January 1, 2008 Base Period for Comparison: Calendar 2007 a) Introduction Frito-Lay has an impressive stable of mega-brands such as Lay’s, Doritos, Cheetos and SunChips. But one brand they had never focused on building was Frito-Lay itself. This is the story of a company facing up to shifting market realities, rethinking how to market their portfolio, turning a parent brand from a corporate trademark into a consumer trustmark, and successfully fighting a growing tide of negative perceptions. It is also the story of a small Canadian agency leading a major initiative for a large US client. b) The Essential Challenge (100 words): Despite historically dominating the snack category, Frito-Lay faced rapidly changing American attitudes towards health and eating. This made them vulnerable to competitors with what seemed to be ‘healthier’ snacks – whether these perceptions of health were accurate or not. The challenge was bigger than any individual brand could take on, and required a portfolio strategy. c) Summary of Business Results: In just 3 months of advertising, market mix modeling showed that this campaign had delivered 6.6 million incremental pounds of sales volume, the equivalent of over 105 million single-serve bags of chips. This meant an ROI of $1.33 for every dollar spent. The campaign also positively shifted attitudes across the Frito-Lay portfolio, and began to build powerful meaning and trust into the Frito-Lay name. SITUATION ANALYSIS a) Overall Assessment For years, Frito-Lay has dominated the salty snack category, building mega-brands such as Lay’s, Doritos, Cheetos, and SunChips. Two of these are among the five biggest food brands in North America.

But with major shifts in American attitudes towards eating and health, there were worrying signs that growth would slow. Frito-Lay was losing to competitors with better health perceptions, such as crackers, even when there were negligible nutritional differences. (Compared to chips, most crackers have comparable or higher sodium and fat.) Frito-Lay had, in fact, made substantial changes to their products and had several stories to tell. They had been one of the first to remove trans-fats over five years ago; they had shifted to heart-healthy natural oils like sunflower oil; and in many parts of the US their products are made with locally-grown ingredients. But what was the best way to communicate that information? And would that be enough to change perceptions and re-ignite sales?

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b) Resulting Business Objectives The portfolio strategy was tasked with driving sales on individual brands, by taking on the negative headwinds facing the entire category. This would allow the brands to focus on their specific marketing objectives. As this was Frito-Lay’s first portfolio-level campaign, volume objectives were not set. The goal was to achieve attitudinal shifts (detailed in the communications objectives), while tracking ROI for learning and benchmarking. c) Budget Range/Share of Voice The campaign launched with a $US 5.1 million national magazine campaign at 335 print TRPs. The competitive set is very different by region, so we do not calculate national share of voice. The campaign was prominently visible; in line with typical spends of other national snack food campaigns. STRATEGY & INSIGHT

a) Analysis and Insight: The first challenge was that our target – people who had negative health perceptions of chips, and either avoided them or felt guilty about eating them – was most of the adult population. Due to the wide reach of Frito-Lay’s products, our message needed to be close to universal. Could we just tell people that Frito-Lay’s products are healthier than they thought? Although the truth is straightforward, telling people is anything but. Over the previous year, health claims such as “no trans fats” and “made with heart-healthy sunflower oil” had been widely announced on Frito-Lay packaging, with over 11 billion impressions. Despite this, 70% of consumers still believed that the products had trans-fats; and 83% still thought of them as junk (ITRAC Panel data, October 2007). Crossover Note 2. Further, Frito-Lay products were sometimes losing share to products like crackers that were nutritionally no different, but had a perceptual halo of being better. It became quickly clear that the facts alone would not be sufficient. Crossover Note 20. In digging deeper we began to see why this was the case. Many of these perceptions – like “chips are bad for you” – have achieved the level of cultural truths. This makes them especially resistant to rational persuasion. Further, across the food industry, products have tried to communicate a multitude of health claims; and research told us that fatigue and scepticism was increasing. It often came across as the fox guarding the henhouse. From this analysis, two insights informed our strategy. Crossover Note 10. One was that focusing on an absence of negatives (“contains no trans fats”) can reinforce the negative issues we wanted to minimize. As the cultural analyst George Lakoff observed, when you tell people “don’t think of an elephant,” the first thing they’ll think of is an elephant. So instead of focusing on an absence of negatives, we sought to emphasize positives.

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The second was that even telling people a positive truth about farm-grown ingredients would still leave us trying to shift deep cultural truths with rational facts. Countering these perceptions required marketing to work in a different way. The story needed to be reframed. We needed to build new meaning into the Frito-Lay brand. Crossover Note 1. At that point, the Frito-Lay name represented little more than a big company. Research showed that negative perceptions were so ingrained that people didn’t even understand that potato chips come from potatoes! But Frito-Lay has deep ties to American agriculture. Not only are many ingredients locally sourced, but farmers have been growing potatoes, corn and wheat for Frito-Lay for generations. We saw opportunity in this. Crossover Note 11. Farms and farmers are powerful American icons that signify hard work, honesty, and simplicity. Research told us that people have strong beliefs that if something comes from the land, it can’t be that bad for you. This was something we could build from. b) Business Strategy: To bring back the Frito-Lay parent brand (which had not been advertised for decades) and build it into a trust-mark which could transfer a sense of trust, wholesomeness and health to the brands in its portfolio. c) Communication Strategy: This had two elements. First, convey the idea that Frito-Lay snacks are grown, not made. Second, use advertising not to rationally persuade, but to create a whole new context and set of associations for Frito-Lay of farms, farmers, and rural Americana. The communications objectives of the campaign then became:

• To significantly shift health perceptions about chips, insulating individual brands so they could stay focused on other marketing objectives.

• To establish the Frito-Lay brand as a trusted, responsible company that does good, so that this equity could be transferred onto individual brands.

CREATIVE EXECUTION We chose magazine advertising as this allowed for the rich use of visuals to create this new context for Frito-Lay. Media analysis told us that is also a medium where the consumer is generally open to receiving new messages. The campaign was built around Norman Rockwell-style photography, in rich saturated earthy tones, featuring farm settings, with corn and potatoes prominently visible. To extend the visual language, the typography had a hand-drawn feel, written on barn-board. Headlines drove home the message with “We Grow the Best Snacks on Earth” and “Proudly Grown in the USA.” In all, we had 6 ads.

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The ads also conveyed some of the health messages (no trans fats, simple ingredients, natural oils), although this copy was kept to a minimum given that the ads were designed to evoke a new set of associations,. The ads were signed off with the Frito-Lay brand, and a new tagline: “Good Fun.”

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While communication came from the Frito-Lay parent brand, individual brands were also prominently featured, including Lay’s, Fritos, SunChips, and Tostitos.

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This visual language of farms and barn-board was also used to redesign Frito-Lay’s in-store aisle and display signage to match the campaign while it was in market.

Shelf blade In-store Display Palette

Finally, we also led the redesign of Frito-Lay's corporate website so that it was also closely tied to the farm visual language.

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MEDIA EXECUTION The campaign was launched with a major national magazine campaign at 335 Print TRPs with a budget of $5.1 million US. The advertising ran from January to April across a broad list of major publications such as Time, People, Oprah, Real Simple, Martha Stewart Living, Readers Digest, and InStyle. We used a combination of single page and double page spreads, often with premium placements (inside front covers, back covers).

BUSINESS RESULTS After only 3 months of advertising, the campaign had shifted attitudes and perceptions, and begun to build meaning into the Frito-Lay brand. It also grew sales volume across the portfolio and demonstrated high ROI. After volume declines in the previous two quarters, total Frito-Lay volume increased 3% in the first quarter of 2008 vs. 2007. In a corporation that sells over a billion pounds of product per year, this is a significant turn around. In total, over 6 million incremental pounds of product volume was driven by the campaign (Source: IRI market mix model). This volume was spread across the portfolio, including brands not featured in the advertising, indicating that the campaign had truly begun to change perceptions of Frito-Lay. The campaign delivered an impressive ROI, returning marginal profit of $1.33 for every dollar spent. This is well above the $1.11 of previous Frito-Lay print, and came despite a higher than average media cost due to the premium placement and double page spreads

CAUSE & EFFECT BETWEEN ADVERTISING AND RESULTS There were many other marketing and sales initiatives on specific brands in market at the same time, but we had IRI market mix modelling to isolate the effect of this campaign. It has shown that, after accounting for all other factors, the campaign drove this incremental volume. In fact, the modeling study ranked this campaign as the second most effective print campaign, as measured by pounds of sales volume per TRP, that Frito-Lay North America has ever tracked across its 15+ brands. Traffic to the corporate website also increased by 243% during this period, indicating the campaign had created new interest in Frito-Lay’s story (source: Frito-Lay web traffic). Finally, we have the evidence of Americans’ deeply ingrained health perceptions beginning to shift. (Source: Research International tracking data). Those who saw the advertising are significantly more likely to think Frito-Lay products contain no trans fats (54% vs. 40% who hadn’t seen the ads), and are made with natural healthy oils (67% vs. 55%). They are also now less likely to think of Frito-Lay products as heavily processed (21% vs. 33%). Importantly, they are also more likely to perceive Frito-Lay as being a good (27% vs. 14%) and responsible (36% vs. 21%) company. These attitudinal shifts indicate that the company has successfully begun to build meaning and trust into the Frito-Lay brand name.