Chips Ahoy
Let The Fritos Fall Where They May...
Anybody out there involved in the salty snack food business?
I've got a daily stop in the morning at a convenience store to pick up a supply of diet fizzy drinks, ice and the occasional over-sugared pastry-like substance.
Over the years, you get to know the convenience store routine pretty well. What days the tankers deliver gas, when the grocer's supply truck blocks half the parking lot, when the Coke trucks and beer trucks do the same thing...
And, of course, the Monday & Thursday visit from the Frito-Lay guy.
He's got a panel van packed full of cardboard boxes, each of which contain some variety of bagged chip or other salty snack. He carries in a dozen or more boxes, rotates the stock, fills the racks and then trundles off to his next stop on the line.
Now, judging from the time he takes to do one store's stock of chips, plus the account reconciliation with the store staff, the packing of the boxes, etc., he can't be doing more than one or two stores an hour. Put that into an eight hour day, and there's a top end on how many stores he can be servicing. Even with a 6 day workweek, he can't be moving all that much product.
My question is, how are they making money?
Let's face it, those bags are mostly air, even the big ones. They take up a lot of space, limiting the number of stops before you have to go back to the warehouse and re-up. That big gas-guzzling panel van can only move so many bags of chips per day, and with a cost averaging a buck and a quarter per bag, I can't see how they pay the jobber's salary, much less the truck operating costs, the packaging, the factory upkeep, the multitude of office staff, advertising, depreciation, and all the other overhead costs involved with a national brand.
I'm guessing their production & raw material cost must be next to nothing. If the net contents of each bag are just a few pennies, then perhaps I can see how Frito-Lay, Tom's, Lance, Wise, Utz and the like make their coin.
Anybody know for certain?
Anybody out there involved in the salty snack food business?
I've got a daily stop in the morning at a convenience store to pick up a supply of diet fizzy drinks, ice and the occasional over-sugared pastry-like substance.
Over the years, you get to know the convenience store routine pretty well. What days the tankers deliver gas, when the grocer's supply truck blocks half the parking lot, when the Coke trucks and beer trucks do the same thing...
And, of course, the Monday & Thursday visit from the Frito-Lay guy.
He's got a panel van packed full of cardboard boxes, each of which contain some variety of bagged chip or other salty snack. He carries in a dozen or more boxes, rotates the stock, fills the racks and then trundles off to his next stop on the line.
Now, judging from the time he takes to do one store's stock of chips, plus the account reconciliation with the store staff, the packing of the boxes, etc., he can't be doing more than one or two stores an hour. Put that into an eight hour day, and there's a top end on how many stores he can be servicing. Even with a 6 day workweek, he can't be moving all that much product.
My question is, how are they making money?
Let's face it, those bags are mostly air, even the big ones. They take up a lot of space, limiting the number of stops before you have to go back to the warehouse and re-up. That big gas-guzzling panel van can only move so many bags of chips per day, and with a cost averaging a buck and a quarter per bag, I can't see how they pay the jobber's salary, much less the truck operating costs, the packaging, the factory upkeep, the multitude of office staff, advertising, depreciation, and all the other overhead costs involved with a national brand.
I'm guessing their production & raw material cost must be next to nothing. If the net contents of each bag are just a few pennies, then perhaps I can see how Frito-Lay, Tom's, Lance, Wise, Utz and the like make their coin.
Anybody know for certain?
posted by El Capitan | 5:20 PM
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