Why Did PepsiCo Consider Establishing a Potato Chip Plant in China?

various Lay's potato chips

PepsiCo announced an investment of US $ 50 million (about 346 million yuan), invested in a large potato chip processing plant in Sichuan, China, and purchased a large amount of Taizy potato chip processing equipment. Why did PepsiCo consider establishing a potato chip factory in China?

The reasons why Lay’s potato chips so excellent

Pepsi Co.’s Lay’s Potato Chips is now a world-renowned casual snack brand. Among them, Lay’s potato chips are the most representative snacks. There are three reasons can explain why Lay’s potato chips are excellent.

1. Perfect consumer analysis

From the perspective of consumers ‘purchasing psychology, consumers’ psychology of purchasing potato chips mainly includes 1. Taste. 2. Brand. According to a survey, 41% of consumers believe that the taste of potato chips is the most important. So taste is the primary focus of potato chip producers.

In the same grade of products, products with brand influence can often get more sales. The survey shows that 21% of consumers believe that brands are one of the most important factors that dominate their purchases. Consumers buy potato chips mainly because of psychological satisfaction.

Sliced potato chips
sliced potato chips

2. Overall competitor analysis

Lay’s has accurately found its market position after conducting research and analysis on its competitors, such as Cobb Potato Chips, Pringles Potato Chips, and Calbee Potato Chips.

Copic Potato Chips is a snack food brand under the Dali Group. Founded in 1989, it mainly produces puffed food, egg yolk pie, potato chips, and other snack foods. Copic potato chips are endorsed by popular singers and are mainly divided into 4 flavors.

The Pringles Potato Chips pioneered by Procter & Gamble Company of America in 1970 has a history of 50 years. For a long time, with its unique taste, no greasy feeling, easy to carry, and batch eating, Pringles has gradually become a popular snack food in the world, and has become one of the best choices for young people ’s snack .

Fully-automtaic potato chips production line
Fully-Automtaic Potato Chips Production Line

Reasons why Pepsi established a large potato chips plant in China

1. Lay ’s potato chips have a relatively mature market in China. And the consumer’s psychological consumption pattern is basically formed. Therefore, using potato chips processing plants to produce potato chips in China has great market potential.

2. In terms of product taste, Lay ’s potato chips strive to cater to the tastes of Chinese consumers, and have developed a series of potato chips with low calories and good taste.

3. The potatoes in China are of good quality and large output, which is very suitable for the production of high-quality potato chips. Low labor cost is also one of the favorable factors for large-scale processing of potato chips.

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