PepsiCo “Loco” for New Products, Foodservice Partners
Here’s a win-win example: PepsiCo Foodservice and Taco Bell jointly invested capital and years of research and development in support of Taco Bell’s new Doritos Locos Tacos. Although the product officially debuted just last May, it already has become Taco Bell’s best-selling new product. Or, consider a more recent new product debut from International House of Pancakes LLC. This September saw IHOP expand its Simple & Fit menu (items with fewer than 600 calories) with three new oatmeal varieties made with Quaker Oats.
“We recognize that product innovation isn’t the same as it is in retail, and clearly, it is not a one-size-fits-all scenario for everyone,” says Doug Allison, PepsiCo Foodservice vice president of industry relations and communications. “In foodservice, we feel we have the responsibility to try to grow our customer’s business. That’s the underlying theme. Throughout PepsiCo, we work to learn how to excite consumers. Next, we translate that into opportunities to build our customer-partner’s business.”
For the record, PepsiCo Foodservice spans PepsiCo’s broad portfolio, which includes brands such as Pepsi, Frito-Lay, Quaker, Tropicana and Gatorade. The group leverages the company’s diverse product offerings for use in all operating channels, including vending, throughout the U.S. and Canada. Allison says PepsiCo Foodservice taps a broad corporate network of facilities, food scientists and culinary personnel, such as Stephen Kalil, CEC, CRC, a director of research and development and corporate executive research chef at Frito-Lay North America.
“When it came to Taco Bell, PepsiCo’s culinary team worked hand in hand with Taco Bell to creatively take us beyond chips,” says Allison. “It’s about figuring ways to integrate our thinking and product capabilities into our customers’ menus, and I think you are starting to see that in a numbers of ways, with a number of our customers. We’re willing to explore new seasonings, flavors and product categories, and apply a culinary perspective with all the market intelligence we have with our customers that [are] willing to partner in all aspects of [the] innovation process.”
What does the innovation process look like behind the scene? Taco Bell shared a few insights regarding this summer’s official launch of Doritos Locos Tacos. According to a company press release, Taco Bell CEO Greg Creed said he tasked his team and supplier-partners with developing the foodservice industry’s “next big thing.” Through deliberate and collaborative efforts, Taco Bell and Frito-Lay developed the Doritos Locos Tacos. It is an idea so simple and brilliant, said Creed, “it was a flavor pairing just waiting to happen.”
Taco Bell said Frito-Lay purchased and installed four additional production lines to produce the proprietary shell made from Nacho Cheese Doritos chips (more varieties to come). To gauge consumer acceptance, both companies tested Doritos Locos Tacos for a full year in three cities (Bakersfield and Fresno, Calif.; Toledo, Ohio), where one out of every three purchases included the Doritos Locos Tacos.
In late May, Taco Bell told newspapers the chain already had sold more than 100 million Doritos Locos Tacos during in the product’s first 10 weeks on the national market. Spokesman Rob Poetsch told the Orange County Register that the company’s previous big hit, the Crunch Wrap Supreme of 2005, “has been dethroned” by the Doritos Locos Tacos. In late August, Taco Bell announced that it had crossed a mark of more than 200 million items sold.
“This innovation [story] is as much theirs as it is ours,” says Allison. “It’s a great example of serving as a sounding board to our customers, so we can help both companies increase brand awareness and drive incremental business.”
Meanwhile, the beat goes on. PepsiCo Foodservice says its latest partnership with IHOP represents the first time Quaker Oats has ever partnered to create branded items specifically for family dining. Officials say IHOP’s new oatmeal blends three different types of oats to offer unique flavors and textures. Three new menu additions are Quaker Oats Super Fruit & Nut Oatmeal, Super Fruit Oatmeal and Banana & Brown Sugar Oatmeal.
“We were delighted to work with Quaker to formulate an oatmeal blend that is hearty, creamy, toasty and uniquely IHOP [and] that meets both our high standards for breakfast foods,” said David Shaw, IHOP’s executive chef, in a corporate launch press release. “These new oatmeals, along with our new, whole-wheat menu items, demonstrate IHOP’s commitment to continually introducing new, delicious, low-calorie and smart dining options, and we think these new additions will become customer favorites.”
IHOP’s press materials included comments from Kristina Mangelsdorf, chief marketing officer at PepsiCo Foodservice.
“Partnering with IHOP, a brand that gets as excited about breakfast as we do, is a natural fit for Quaker,” she said. “For more than 130 years, Quaker has been nourishing healthy families with delicious, whole-grain foods, and we’re excited to continue to innovate and expand the ways in which we serve oatmeal lovers.”