LOS ANGELES — Peatos, the brand that brazenly challenged Cheetos in a snack spat last year, is targeting another Frito-Lay franchise with its latest product launch. Peatos Crunchy Rings are inspired by Funyuns and feature an onion flavor. The company formulates its products with peas and lentils instead of corn, which results in a crunchy texture with a healthier nutrition profile.
Developed to disrupt the “$20 billion junk snack market” dominated by PepsiCo’s Frito-Lay, Peatos’ pulse-based take on Cheetos first appeared on retail shelves in late 2017. The following May, Kroger Co. began selling the product in 2,000 stores.
“That is what really catapulted us into the mainstream,” Nick Desai, chief executive officer of Peatos parent company Snack it Forward L.L.C., told Food Business News. “We went from 100 stores to 5,200 stores in less than a year.”
Soon after, PepsiCo sent a cease-and-desist letter accusing Peatos of trademark violations and contesting the competitor’s name, paw-print logo and slogan, “tigers live longer than cheetahs” — a blatant poke at Cheetos mascot Chester Cheetah. Once the orange dust settled, Peatos evolved its branding — but kept the name.
“We made a decision that that tagline wasn’t so essential to our branding … and because we want to branch the platform out of the Cheetos and into these other things, that we’re going to move away from that direction anyway,” Mr. Desai said. “We entered into an agreement with them that we would not use that tagline, in return for them agreeing the Peatos brand name and mark is basically ours and off-limits for them to attack.
“That came out favorably for us because Peatos is really the brand name, and that’s what we wanted to protect in the end.”
Updated packaging is rolling out soon and features a new tagline: “Junk food taste made from peas.” Peatos Crunchy Curls are available in classic cheese, chili cheese, fiery hot, ranch and masala flavors. Peatos Crunchy Rings will debut in classic onion and fiery onion varieties. Both provide four grams of protein and three grams of fiber per serving, which compares with two grams of protein and less than one gram of fiber in Cheetos and Funyuns snacks. Peatos’ products also contain fewer calories and less fat and sodium than the Frito-Lay products with no artificial flavors or synthetic colors.
The key to Peatos’ product development is copying the taste and texture of conventional snack foods, Mr. Desai said. He compared his product to the plant-based burgers produced by Beyond Meat and Impossible Foods. Those companies created convincing alternatives that look, cook and taste like beef, he noted.
“That’s the approach we’re taking when it comes to snacking,” he said. “What we have done is come very close to basically replicating the experience of eating Cheetos.”
He added, “That’s what gets us excited about the opportunity we have to really disrupt and go after the 8,000-lb gorilla… We’re going to do it through innovation.”
Peatos products are sold in approximately 6,000 retail outlets and are typically merchandised in the produce department.
“We know the trends in the grocery store are people are moving to the perimeter of the store,” Mr. Desai said. “The center-store foot traffic is going down; the perimeter foot traffic is increasing, and that’s particularly prevalent among millennial shoppers and younger…
“We know our consumer is in the produce section, so the question becomes how do we get their attention for a snack they may not think of as a produce-oriented snack? How do we make them think of Cheetos while they’re in the produce section? That is something we’re learning about as we go.”
Looking ahead, the company plans to create pea- and lentil-based snacks that mimic many other popular brands in Frito-Lay’s portfolio, Mr. Desai said.
“We’re basically saying you can use peas just as effectively as you can use corn to create some fantastic snacks that you already know and love,” he said. “Don’t try to get the consumer to go too far and move too much because most of the consumers won’t do that. You’ll get a small niche of people who will try anything, but the vast majority of consumers are going to stay grounded in the things that they already know. I think that’s what sets the Peatos franchise apart from the market today.”