Marketing: The Potato-Chip War

Marketing: The Potato-Chip War

When is a potato chip not a potato chip?
Not when it is “made from potatoes cooked, mashed and dehydrated,
resulting in potato granules which are later moistened, rolled out, cut
into pieces and fried.” So say officers of the Potato Chip Institute
International, which represents almost 400 chip makers from the U.S.
and abroad. The group is trying to stop two huge companies from
promoting as potato chips some dehydrated potato products that are now
being test-marketed. The institute has taken its semantics argument into court in Lincoln,
Neb., aiming to enjoin General Mills from advertising its Chipos potato
snacks as “newfashioned potato chips.” The institute also intends to
sue Procter & Gamble for advertising its potato Pringle's as
“newfangled potato chips.” Harvey Noss Sr., executive vice president of
the institute, complains that both companies “are trying to capitalize
on the good name of the potato chip, which has been built up over 100
years.” At stake is a $900 million industry, mostly made up of small companies
that market their products locally. Institute members are obviously
afraid that the new dehydrated potato snacks could nibble into
potato-chip markets and drive some of the small chip companies out of
business. Dallas-based Frito-Lay, which claims to be the biggest chip
maker in the U.S. and uses Comic Buddy Hackett to munch chips on TV
commercials, sides with the institute. But Frito-Lay is hedging its bet
by test-marketing Munchos, a potato snack that it carefully labels
“potato crisps.” Francis X. Rice, president of the institute, concedes
that “synthetic” chips do have advantages. Pringle's, for example, have
a longer shelf life and are not nearly so fragile as potato chips
because they are uniformly round and come neatly stacked in tall
cardboard canisters. Partly because of the costly packaging, the
dehydrated chips cost about 15% more than regular chips. Pringle's
taste and look much like real potato chips, but they are not as crisp. Long War. The chip controversy is the latest battle in the long war that
traditional foods have been losing to various substitutes. Fewer
calories, less cholesterol, no refrigeration, uniform quality and many
other claims have been used to persuade the U.S. consumer to switch to
nondairy creamers in her coffee, orange-flavored breakfast drinks,
soybean meal in hamburger, and simulated bacon. Sales of fabricated
foods are rising, but many people feel that the old-time products taste
better. Even some major food processors are traditionalists. Robert Wise, head
of Wise Potato Chips, a division of Borden, Inc. does not feel the
least bit threatened by Chipos or Pringle's, nor does he plan to make a
similar product. “We are not interested in competing with ourselves,”
he says.

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