PepsiCo Tests Snack Foods in Soda Cans in Pepsi Vendors.

From Beverage Digest 8/22/97

PepsiCo Tests Snack Foods in Soft Drink Cans in Soft Drink Vending Machines. 'Tremendous Opportunity.'

PepsiCo tests sale of Doritos and Fritos -- produced by Pepsi-Cola sister company Frito-Lay -- in 12-oz aluminum beverage cans in Pepsi vending machines. Test markets: Kansas City, Des Moines, Seattle, Indianapolis, St. Louis and Birmingham. Multiple bottlers/executives refer to test as "snack-in-can" concept. Pepsi executive: "We're still figuring out where this may lead." Industry executive says in Kansas City, Fritos in 12-oz cans sell for 75¢. Pepsi bottlers praise program's potential. Industry executives/bottlers: 1) "Pepsi has tremendous opportunity to marry (Pepsi and Frito-Lay). Coke couldn't follow this one." 2) "Merchandising and promotional potential (of) salty snacks and cold drinks in one machine is huge." Wall Street. PaineWebber's Manny Goldman: "This could be significant, and it could give (PepsiCo) widespread sampling platform for the olestra-based snacks next year." Vending Executive: "Pepsi system has pushed up its purchasing, now it's pretty balanced between the Coke and Pepsi systems."

Frito-Lay. Frito-Lay executive: "We're doing a lot of learning. We're encouraged with the test results. We don't know our specific plans for the future." Frito-Lay holds 53 share of salty snack industry. UK. Pepsi in UK tests joint vending program; vendors for Pepsi beverages and PepsiCo-owned Walkers snack foods placed side-by-side, coupled to same coin mechanism enabling consumer to make 1 purchase. Pepsi-Lay? PepsiCo weighs name-change to Pepsi-Lay or Pepsi Frito-Lay after 10/6/97 restaurant spin-off, says WSJ.

Views. Bottlers/executives: 1) "It's an intriguing idea." 2) "Roger (Enrico, PepsiCo CEO) wants to marry the Pepsi-Frito relationship more than in the past. He sees value in a `one-company' concept." 3) "If a bottler uses a 10-select machine, like the Vendo 511, then (beverages/snacks in same machine) is a great idea. In a smaller machine, it's more problematic." 4) "It's a good use for older can vendors." 5) "I'd be willing to try it." 6) "You can make good margin, and the product lasts. But I don't like the agreement we'd have to sign with Frito. We couldn't get exclusivity on the cans." 7) "(PepsiCo) has a lot of marketplace assets. Roger will capitalize on that." Plus. Sometimes cynical Pepsi bottler: "It's a great idea, and it could be a great thing."

Can. Standard beverage size/shape aluminum can with pull-off removable top contains 2 ounces Fritos. Can produced by American National Can. Graphics depict "Fritos Original" logo displayed diagonally. Colors predominantly red and yellow. Expiration date on bottom of can. Product packed by Frito-Lay. Can refers to patent #5,445,287.

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