Frito-Lay's WOW!
Chips: A Cautionary
Tale
In 1998, Frito-Lay introduced WOW! chips, promising a fat-free snacking
experience. This case study explores the rise and fall of WOW! chips,
examining the marketing strategies, consumer reactions, and lessons
learned.
by Manoj Gowda
Introduction to Olestra
What is Olestra? The Promise Early Adoption
Olestra is a non-absorbable fat It enabled the creation of fat-free Frito-Lay was among the first to utilize
substitute. It provides the taste of fat snacks, revolutionizing the food Olestra. They created WOW! chips: fat-
without the calories. industry. Consumers could indulge free versions of their popular brands.
without guilt.
The Promise of Fat-Free Potato Chips
Marketing Focus Consumer Expectations Initial Success
Frito-Lay heavily promoted the fat-free Consumers were eager for a snack that WOW! chips became a huge hit. They
aspect of WOW! chips. Ads emphasized tasted good. And they believed it would generated massive sales and captured
"guilt-free" snacking and weight not contribute to weight gain. significant market share in the snack
management. industry.
Unexpected Consumer Reaction
1 Gastrointestinal Issues 2 Olestra's Impact 3 Word of Mouth
Consumers reported unpleasant Olestra wasn't absorbed by the Negative experiences spread
side effects. These included body. It interfered with quickly. It affected product
abdominal cramping and absorption of vitamins and reputation despite initial sales.
diarrhea. nutrients.
FDA Warnings and Public Perception
Negative Publicity
Media coverage amplified consumer
2 complaints. Public perception shifted,
FDA Labeling associating WOW! chips with health
The FDA mandated warning labels 1 risks.
on products containing Olestra. This
was to inform consumers of
potential side effects.
Sales Decline
Consumer trust eroded, leading to a
3 significant drop in sales. WOW! chips
lost their initial popularity.
Financial and Brand Reputation
Impact
-500M 📉
Revenue Loss Brand Damage
Frito-Lay faced substantial financial losses due to The negative publicity tarnished Frito-Lay's brand
declining sales. The WOW! chips experiment proved image. Consumers questioned the safety of their
costly. other products.
🤔
Long-Term Effects
The WOW! chips saga served as a cautionary tale. It
highlighted the risks of prioritizing innovation over
consumer safety.
Solutions Adopted by
Frito-Lay
Reformulation Transparency Mitigation
Frito-Lay explored The company Frito-Lay invested in
alternative fat improved consumer research. The goal
substitutes. They communication. They was to understand
sought safer provided clear and mitigate the
ingredients with information about adverse effects of
fewer side effects. product ingredients Olestra.
and potential effects.
Marketing Lessons
Learned
Product Consumer
Development Communication
Prioritize thorough testing and Be transparent about
safety evaluations. ingredients and potential
Understand potential side risks. Manage consumer
effects before launch. expectations effectively.
Brand Management
Protect brand reputation through responsible marketing. Maintain
consumer trust through honesty.
Suggestions as Marketing Manager
CRM Implementation
1
Utilize CRM to gather consumer feedback. Track reports of side effects and address concerns.
Targeted Communication
2 Segment consumers based on past purchases. Communicate personalized
information about product updates.
Loyalty Programs
3 Offer incentives to regain consumer trust. Reward loyal
customers with exclusive deals.
Conclusion
The Frito-Lay WOW! chips case is a stark reminder. Innovation must align
with consumer well-being. Comprehensive testing and transparent
communication are crucial.
Companies should prioritize customer safety above profits. Building trust
is essential for sustainable success. Learn from past mistakes to create a
brighter future.
