There was a time when getting a taco with Doritos as a prime ingredient required getting inventive in the kitchen or visiting a Yum! Brands (NYSE: YUM) Taco Bell location. Now, PepsiCo's (NYSE:PEP) Frito-Lay brand has brought taco-like products based on its most-popular snack chips to convenience stores, concession stands, and college campuses. Called "Top N Go Walking Tacos," the product was actually launched via food truck in February at the Super Bowl and they have been touring the country for almost a year. That apparently successful tour has led the company to try a wider rollout, bringing portable savory meals/snacks involving Doritos, Cheetos, Fritos, Ruffles, and Tostitos to all the aforementioned locations.
It's a bold brand extension by a company that has previously worked with Taco Bell on a variety of Doritos Locos Tacos, as well as some other products involving snack chips. Frito-Lay has also recently partnered with Restaurant Brand International's (NYSE: QSR) Burger King for a series of Cheetos-based foods. The walking tacos represent the next logical step in taking brands that started as snack chips and leveraging their name recognition into expanded markets.
What is PepsiCo/Frito-Lay doing?
The company was smart in gauging reaction for its news snack-chip-based meal/snack option by test marketing it via food truck. Consumer reaction to the Top N Go products -- which are snack chips served in a bag with a choice of taco-appropriate toppings -- was clearly strong. The truck went through 30 states in six months, serving 23,000 of the Walking Tacos, according to PespsiCo.
Is this a good idea?
Taco Bell reignited sales and interest in its brand with the Doritos Locos Taco, and now has multiple variations on its menu. Burger King does not appear to have ignited the same business success with its Mac N' Cheetos or its Cheetos Chicken Fries, but it certainly got significant media attention and that likely led to sampling as well as increased traffic in its stores.
It makes sense for Pepsi/Frito-Lay to leverage the name recognition of its popular snack chips to attempt to enter new categories. The creation of Top N Go Walking Tacos lets the company offer a meal-like alternative that competes with the hot dogs, pizza slices, and burritos offered in a convenience store setting. Next to those choices, a well-known snack chip selection might get people's attention. Frito-Lay is inserting its products into a situation where being a well-known brand will trump the fact that its "tacos" are snack chips topped with your choice of meat, cheese, onions, and/or jalapenos.
These walking tacos could be a hit
With Top N Go Walking Tacos, Pepsi and Frito-Lay are going after a younger audience simply looking for quick, tasty, and easy. College students made Taco Bell's "fourth meal," essentially a late-night second dinner, a viable concept and they are largely why certain pizza chains stay open well past midnight.
This is food for people who don't put a ton of thought into what they are consuming or at least they are not being all that discerning in the moment. Doritos, Cheetos, Fritos, and Tostitos bring name recognition to a part of the convenience store where it's lacking. That could make these a very big hit simply by being the best choice at times and locations where choices are limited.
Daniel Kline has no position in any stocks mentioned. Yuck. The Motley Fool owns shares of and recommends PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.