Brandweek, January 7, 2008

Strategy: Cheetos on the Prowl for Adult Consumers; Classic Frito-Lay Brand Refocuses Efforts, Increases Ad Spending

After successfully growing its Doritos and Sun Chips brands, Frito-Lay is setting its sights on cranking up Cheetos' flat sales with a new adult and Hispanic focus.

The initiative, which includes boosting the brand's ad spend by more than 50%, follows an internal overhaul in early 2007 at which time Cheetos more than doubled its internal marketing team and installed former Lays marketing exec Dorothy Jones as its marketing director. In August, Cheetos swapped ad agency BBDO, New York, for Goodby Silverstein & Partners, San Francisco.

Though traditionally perceived as a children's brand, consumer research during the retrenching showed that more than 60% of Cheetos consumers were over the age of 18, and moreover, 43% of all childless households were consuming the brand's products.

While the PepsiCo entity is by no means shuttering its child-focused marketing operations, it will beef up its presence on networks such as TBS, Comedy Central, Cartoon Network's Adult Swim and other late night programming in a bid to capture 18- to 49-year-old consumers.

Spending for the new effort was not disclosed. In 2006, the brand spent $22 million on measured media and, through October 2007, had spent $8 million, per Nielsen Monitor-Plus. While previous kid-focused campaigns presented icon Chester Cheetah as a larger-than-life character, a new TV campaign breaking Jan. 14 reimagines him as a devil on the shoulder of adults. "We're going to be talking about Chester a little bit differently to the adults," Jones said. "He's figured more as their inner voice."

In one spot, for instance, a young woman at a laundromat is berated by a fellow afternoon washer while she enjoys a mini-bag of Cheetos. The cartoon cat, now much smaller than in previous campaigns, then appears in a corner, telling the girl to dirty her antagonist's white sheets by putting Cheetos in the drier. The spot plugs OrangeUnderground.com, a showcase for video ads, and links to Cheetos-themed videos from YouTube.

Though it is unusual to try to reposition a kids' brand for an adult audience, Frito-Lay's not the first to try it. Kellogg used a similar approach with its "Shadows" TV ads for its Frosted Flakes. Those ads, which began in 1989, showed adult fans with their faces blacked out like a secret informant in a 60 Minutes-style interview admitting to a love of Frosted Flakes. The ads ran for 13 years.

Gary Stibel, president of New England Consulting Group, Westport, Conn., which helped create the Chester mascot in the '80s, said Cheetos has also had a closet adult following.

"There are a lot of adults that love the brand but won't eat it publicly," he said. "For Cheetos to take their brand to an adult audience, most of whom learned about and started eating the brand when they were teens, and let them age with the brand, just makes infinite sense. That brand has more legs than almost any other brand in the [Frito-Lay] portfolio."

The effort also includes two new limited-time-only flavors released each quarter beginning in February. One flavor will target the general market while the other will target Hispanic consumers. First up will be Double Cheese and Chili Limón, respectively. The Hispanic flavors will be supported by Spanish-language radio and outdoor, via Dieste Harmel & Partners, Dallas.

The new Hispanic targeted offerings are engineered to play to spicier flavor palettes to deepen the brand's connection with the key demographic, Jones said.

"Latinos really do have extreme tastebuds and their taste profile is markedly different from the mainstream [American] consumer," said Barbie Casasus, senior director and consumer strategist for Latino markets at Iconoculture, a consumer culture consultancy based in Minneapolis. "Going with these specific [Hispanic-geared] flavors is a good move for Cheetos because that's where the opportunity in consumer packaged goods exists in this market."

Casasus added that the timing is right for the brand to court younger Hispanics who are embracing new American snacking patterns. She did caution, however, that the product had to be positioned as a social food.

"When I think of all the chips and crackers and cookies that Latinos [in the U.S.] are exposed to but aren't eating as often, the opportunity is really aligning it with Latino snacking culture," she said. "The product has to be positioned as something you can share with friends and family as well as drop-in company."

The effort comes as sales of Cheetos grew only 2% to $405 million last year for the 52-week period ending Dec. 2, per IRI. That's a stark contrast to growth for their Frito-Lay brands like Sun Chips (up 29% to $189 million) and Doritos (up 11% to $721 million).