Frito-Lay

Frito-Lay, Inc. (/ˈfriːtoʊ leɪ/; FREE-toh-LAY) is an American food company that manufactures, markets, and sells snack foods. It began in the early 1930s as two separate companies, the Frito Company and H.W. Lay & Company, that merged in 1961. Frito-Lay itself merged with the Pepsi-Cola Company in 1965 to create PepsiCo. Since the merger, Frito-Lay operates as a wholly owned subsidiary of PepsiCo. The primary snack food brands produced under the Frito-Lay name include Fritos corn chips, Cheetos cheese-flavored snacks, Doritos and Tostitos tortilla chips, Lay's and Ruffles potato chips, Rold Gold pretzels in North America and is part of PepsiCo North America Inc. Each brand generated annual worldwide sales over $1 billion in 2009. Through Frito-Lay, PepsiCo is the largest globally distributed snack food company, with sales of its products in 2009 comprising 40 percent of all "savory snacks" sold in the United States, and 30 percent of the non-U.S. market. In 2018, Frito-Lay North America accounted for at least 25 percent of PepsiCo's annual sales.

In 1932, Kansas City, Kansas-born Charles Elmer Doolin, manager of the Highland Park Confectionery in San Antonio, Texas, purchased a corn chip recipe, a handheld potato ricer, and 19 retail accounts from a corn chip manufacturer for $100, which he borrowed from his mother. Doolin established a new corn chip business, The Frito Company, in his mother's kitchen. Doolin, with his mother and brother, produced the corn chips, now named Fritos, and had a production capacity of approximately 10 pounds per day and roughly 30¢ per product. Doolin distributed the Fritos in 5¢ bags. Daily sales totaled $8 to $10 and profits averaged about $2 per day. In 1933 the production of Fritos increased from 10 pounds to nearly 100 pounds due to the development of a hammer press. By the end of the year, production lines were operating in Houston and Dallas. The Frito Company headquarters also moved to Dallas to capitalize on the city's central location and better availability of raw materials. In 1937 The Frito Company opened its research and development lab and introduced new products, including Fritos Peanut Butter Sandwiches and Fritos Peanuts, to supplement Fritos and Fritatos potato chips, which had been introduced in 1935.

In 1939, the company purchased Fluffs pork skins and incorporated the Dallas business. Frito relocated the operation from Haskell Avenue to a new facility at 2005 Wall Street. Alice Rupe, who was one of Fluffs' original six all-woman crew, was placed in charge of operations. In 1940, she was named assistant treasurer and manager; in 1949 she was promoted to treasurer.

In 1941, the company opened its western division in Los Angeles with two sales routes, which would become the prototype for The Frito Company's distribution system. In 1945, The Frito Sales Company was established to separate sales from production activities. Expansion continued with the issue of six franchises through the Frito National Company in the same year. In 1950, Fritos were sold in all 48 states. The Frito Company issued its first public stock in 1954. In 1958, Frito entered the Midwest potato chip market by acquiring the Nicolay Dancey Company, which made New Era potato chips. At the time of Doolin's death in 1959, The Frito Company produced over 40 products, had plants in 18 cities, employed over 3,000 people, and had sales in 1958 in excess of $50 million. By 1962, Fritos were sold in 48 countries.

In 1931, Charlotte, North Carolina-born salesman Herman Lay (1909–1982) sold potato chips in the Southern United States out of his car. In 1932, he began a potato chip business in Nashville, Tennessee. Lay was hired as a salesman for the Barrett Food Products Company, an Atlanta, Georgia, manufacturer of Gardner's Potato Chips, and eventually took over Barrett's Nashville warehouse as a distributor. Lay hired his first salesman in 1934, and three years later had 25 employees and a larger manufacturing facility where he produced popcorn and peanut butter sandwich crackers.

A representative of the Barrett Food Company contacted Lay in 1938, offering to sell Barrett's plants in Atlanta and Memphis to Lay for $60,000. Lay borrowed $30,000 from a bank and persuaded the Barrett Company to take the difference in preferred stock. Lay moved his headquarters to Atlanta and formed H.W. Lay & Company in 1939. He later purchased the Barrett manufacturing plant in Jacksonville, Florida, along with additional plants in Jackson, Mississippi; Louisville, Kentucky; and Greensboro, North Carolina. Lay retained the Gardner trademark of Barrett Food Products until 1944, when the product name was changed to Lay's Potato Chips.

Lay expanded further in the 1950s, with the purchase of The Richmond Potato Chip Company and the Capitol Frito Corporation. By 1956, with more than 1,000 employees, plants in eight cities, and branches or warehouses in thirteen others, H.W. Lay & Company was the largest manufacturer of potato chips and snack foods in the United States.

In 1945, The Frito Company granted H.W. Lay & Company an exclusive franchise to manufacture and distribute Fritos in the Southeast. The two companies worked toward national distribution and developed a close business affiliation. In September 1961, The Frito Company and H.W. Lay & Company merged to become Frito-Lay, Inc., combining their headquarters in Dallas, Texas. At this point, the company's annual revenues totaled $127 million, largely generated from sales of its four main brands at the time: Fritos, Lay's, Cheetos, and Ruffles.