Big Launch of Pepsi's New Doritos - Analyst Blog

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PepsiCo International's ( PEP ) billion-dollar snacks brand Doritos tortilla chips will unveil its latest innovation - Doritos JACKED tortillas - on March 15, at the South by Southwest (SXSW) Music Conference and Festival in Austin, Texas.

The new Doritos tortilla chips are 40% larger and come in two flavors, namely Enchilada Supreme and Smoky Chipotle BBQ. With every munch, these new chips promise to give "one-two punch of intense flavors upfront, followed by a twist of spice or tanginess that packs the ultimate crunch."

The new product line will be available in 2.62-oz., 3.375-oz. and 10.5-oz. packages. Doritos JACKED tortillas will be first introduced on a 56-foot-tall vending machine. Consumers at the music festival, who taste the Doritos chips, can get 'larger-than-life Doritos-branded quarters' through Foursquare, Twitter. The giant quarters will be made available throughout the city of Austin

Moreover, they can insert these quarters into the vending machine, which will redeem products and special prizes.

Pepsi had been recently revamping its snacks business. In January 2012 the food maker revealed its plans to purchase Brazilian local cookie maker Marilan Alimentos. Based in Marilan, Sao Paulo, Marilan Alimentos. is the country's fourth largest maker of cookies. Its products include salted snacks, classical Italian, filled, classic, and sandwich biscuits; and butter cookies, cream crackers, and toasts.

On November 2011, the food and beverage giant acquired Brazilian cookie company Grupo Mabel, for an undisclosed price. The takeover added brands like Mabel, Elbi's, Kelly and Skiny into Pepsi's portfolio of snacks. Pepsi already offers snacks under brands like Elma Chips, Quaker, Toddy Chocolate Powder and Toddynho Chocolate Milk in Brazil.

Pepsi's competitor in foods and snacks business, General Mills Inc. ( GIS ) (whose portfolio includes snacks like Cheerios cereal, Nature Valley granola bars and Betty Crocker cake mixes) is also striving hard to bolster its presence in the snacks market, and has subsequently decided to buy the fast-growing natural snack foods company, Food Should Taste Good. The signature tortilla chips of Food Should Taste Good come in a variety of flavors, including sweet potato, lime, olive, chocolate, multigrain and jalapeno.

Our Recommendation

We currently have a Neutral recommendation on PepsiCo. However, the stock carries a Zacks #4 Rank (Sell' rating) over the short term.

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PEPSICO INC ( PEP ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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