PepsiCo renovating Quaker, adding snack brands

by Monica Watrous
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PepsiCo Naked bars
Naked is introducing a line of refrigerated nutrition bars flecked with bits of fruits and vegetables.
 

ANAHEIM, CALIF. — Naked, a nearly 35-year-old brand known for juices and smoothies, is moving in a new direction with a line of refrigerated nutrition bars flecked with bits of fruits and vegetables. It's represents a unique approach to the bar category and is an example of how parent company PepsiCo, Inc. is thinking differently about nutrition.

"Our portfolio will continue to move toward cleaner ingredients, more on-trend, more of the perimeter of the store versus the center store," said Seth Kaufman, president of the North American Nutrition division at PepsiCo, during a presentation at Natural Products Expo West, held March 8-11 in Anaheim.

Cleaning up Quaker

As the maker of Tropicana juice and Quaker Oats, PepsiCo provides more than 5 billion servings of fruit and more than 200 billion grams of whole grain each year, Mr. Kaufman said.

It's a good foundation, he said, but more can be done. The year ahead will be "the most transformational year for Quaker Oats ever," as the company sets out to remove artificial flavors, preservatives, sweeteners and colors from the brand's hot cereal, ready-to-eat cereal and snack bars.

"We're also taking out any of the unrecognizable, scary ingredients," Mr. Kaufman said, referring to vitamins and minerals added years ago to address dietary deficiencies. Vitamin A, for example, is listed on the ingredient panel as "palmitate," a word consumers may not recognize and therefore avoid, he said. Today's consumers are no longer deficient in the ingredients the company plans to eliminate, he noted.

"Quaker is one of the most trusted nutrition brands in consumers' minds, so I owe it to consumers to make sure that all of our choices meet that standard," Mr. Kaufman told Food Business News. "If we're going to build this into a much bigger business than it is today, which I fundamentally know we can do with Quaker, then the foundation has to be right."

Expanding Naked

In addition to improving the core portfolio, PepsiCo is introducing new products that meet today's consumer standards for health and wellness. The Naked Fruit, Nut and Veggie Bars, for example, align with that brand's mission to make consuming fruits and vegetables more convenient, Mr. Kaufman said.

"That goes well beyond a smoothie," he said. "Things like portable bars, you can project out in the future and think about bowls... jerky. Whether or not we do those things will depend on the specific consumer need, but that's where the headspace is."

The decision to merchandise the Naked bars in the refrigerated section rather than the shelf-stable bar set was strategic, he said.

"Essentially you could be bigger scale sooner in ambient, but we wanted to build the business the right way from the start knowing that it will be a build over a number of years versus a big splash," Mr. Kaufman said. "It’s the first bar that has real fruit and veg chunks in it. You can see the kale. In order to do that the right way, keeping it chilled throughout the supply chain is super important.

"If you go into the natural channel, you’re already seeing four-foot sets of chilled bars. You’re not seeing whole aisles like with ambient bars, but what drove the decision is having the right quality ingredients presented to the consumer in a way that’s going to be delicious but also provides positive nutrition."

Introducing Imagine

"Positive nutrition" is a term that illustrates PepsiCo's new direction in portfolio transformation. No longer is it just about reducing the negatives, such as sodium and saturated fat. Adding fiber, whole grains, proteins, fruits and vegetables is a priority, too.

At Natural Products Expo West, PepsiCo's Frito-Lay North America division unveiled a new Non-GMO Project verified snack brand geared towards children. Slated for a summer debut, Imagine products include Yogurt Crisps in mixed berry and apple cinnamon flavors, and Cheese Stars in white cheddar and Parmesan flavors. The products are made with yogurt or cheese and contain 4 to 6 grams of protein per serving.

"Imagine is targeted to millennial families that are looking for snacks their kids will have fun eating and flavors they enjoy but with more purposeful, positive nutrition that makes them feel better about what they’re eating," Tracey Williams, marketing director at PepsiCo, told Food Business News. "If you look at the types of foods that consumers are giving their kids, they’re not always portable... Yogurt is one of those foods that has the nutrients parents love, but it’s not always portable and easy to take with you."

Imagine Cheese Stars represents an innovation emanating another product in PepsiCo's snack portfolio, Stacy's Cheese Petites, said Jody Denton, executive research chef at PepsiCo's Frito-Lay division. With cheese as the first ingredient, the bite-size baked snacks were inspired by French cheese puffs and feature sophisticated flavors, such as Parmesan with rosemary.

"We were really happy with that product... so (we took) that product and (worked) some positive nutrition into the formulation, and we ended up with the Cheese Stars," Mr. Denton said. "It's fun for me to see these brands launching... we've been working on various versions of what could be in the better-for-you portfolio for some time now, and now we're starting to see brand launches right and left, and there's more coming that we can't talk about."

Balancing flavor and nutrition

Another new product featured at Expo West comes from Frito-Lay's Off the Eaten Path brand of snack crisps made with chickpeas, vegetables and rice. The latest addition is a rosemary and olive oil variety of hummus crisps.

"Everything we do is grounded at every level with consumers," Mr. Denton said. "We do exhaustive research with consumers and will build multiple touchpoints. When we first have vague ideas, we’ll ask them what they think, and then when we have refined ideas, we’ll ask them what they think, and then when we have super refined concepts, we'll ask them what they think, and then when we have prototypes, we’ll ask them what they think, and then when we have refined prototypes, we’ll ask them what they think.

"We don’t go down the rabbit hole of a brand launch without knowing that there is a group of consumers out there that actually wants what we’ve designed and developed and are launching."

Particularly among millennial consumers, flavor is more important than ever, and Frito-Lay prides itself on its proprietary process for developing spot-on flavors that evoke an emotional response from the consumer, Mr. Denton said.

"Flavors on snacks used to be very simple — Doritos nacho cheese, Lay’s sour cream and onion… Those were designed in the era before we used chefs," Mr. Denton said. "But the flavor preferences of consumers have evolved to ever more complex flavors. They want meal-like flavors, flavors that remind them of a dish. They want flavors that are more exotic and take them on a journey around the world."

But it's not just about flavor anymore, said Elizabeth Roark, registered dietitian and principal scientist, PepsiCo Nutrition Services.

"It’s an exciting time for me as a dietician because people also want more nutrition in their snacks," Ms. Roark said. "It makes it challenging, but it’s nice for me because they want the nutrition so if it helps me get food groups that are lacking into their snacks." 
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