The Rising Influence of Rising Affluence

[DewDiligence]

(PEP/KFT/K)—Crab-flavored potato chips?

http://finance.yahoo.com/news/crab-chips-fruity-oreos-theyre-134801543.html

For the first time last year, revenue from [PEP’s] international snacks division surpassed revenue in North America. To achieve that, PepsiCo has had to adjust its recipes.

In 2005, PepsiCo's food division began a quest to make its Lay's potato chips more appealing to local tastes in Russia. It wasn't easy. Russians still like packaged versions of a Soviet-era snack — stale bread slathered in oil and baked to a crisp.

"Potato chips were not big in the Communist time, so it's something we're gradually building," [LOL] says Marc Schroeder, who heads PepsiCo's food division in Russia.

To get a better sense of what Russians like, employees traveled around the country to visit people in their homes and talk about what they eat day-to-day. That was a big task. Russia has nine time zones and spans 7,000 miles, with eating habits that vary by region... In the eastern part of the country, PepsiCo found that fish is a big part of the diet. So it introduced "Crab" chips in 2006. It's now the third most popular flavor in the country.

A "Red Caviar" flavor does best in Moscow, where caviar is particularly popular. "Pickled Cucumber," which piggybacks off of a traditional appetizer throughout Russia, was introduced last year and is already the fourth most popular flavor. Other favorites include onion, bacon and "sour cream and herbs," which is a bit sweeter than the American version.

The chip translations are paying off; sales of Lay's have more than doubled in the past five years. As for the classic Lay's — an American favorite — Russians still aren't biting. "They find it a very boring flavor," Schroeder said.

The above article also contains commentary about KFT and K, but I singled out the stuff on PEP.