Frito-Lay's Less is More Approach

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Frito-Lay's Less is More Approach

DALLAS -- Frito-Lay has decided to decrease chip counts on popular snack products, in hopes of forging a price spike due to rising manufacturing and distributing costs.

The Plano-based Frito-Lay Inc., the nation's largest snack maker, is removing approximately one ounce from each bag, reported The Dallas Morning News. This follows in the footsteps of its Purchase, N.Y.-based parent company, PepsiCo Inc., which recently increased prices on certain products.

"For many years now we've been in a deflationary environment," Indra Nooyi, chairwoman and chief executive of PepsiCo, told the newspaper. Despite productivity instituted by the company, Nooyi told the newspaper that inflation has negatively impacted the bottom line.

John Compton, chief executive of PepsiCo Americas Foods, a division of Frito-Lay, told the paper that Frito-Lay began rising consumers' prices on Sunday, mostly on higher-priced items.

Company spokesperson Jenny Schiavone told the paper that products already downsized were exempt from the price increases. "The pricing activity is broad-based, and we are phasing it in across the many brands," she said.

Jim McCarthy, president and chief executive of the Arlington, Va.-based Snack Food Association, told The Dallas Morning News that the association plans to raise the issue of commodities prices next month with members of Congress and officials at the U.S. Department of Agriculture. "We have made commodities our number one issue because these prices are going through the roof," he told the paper.