Frito Lay to up contract farming by four-fold

Food and beverages major PepsiCo’s salted snacks division Frito Lay is looking at increasing contract farming of potato in India by almost four-fold over the next three years.

“Currently, there are 15,000 farmers doing contract farming of potato for us while we are sourcing the commodity from 40,000 farmers. Our intent is to build a win-win self-sustaining contract farming model to improve quality,” Frito Lay India executive vice-president Ruchira Jaitly, told mediapersons here.

The company, which already has contract farming agreements with farmers in Punjab, Karnataka, Maharashtra, Madhya Pradesh, Uttar Pradesh, Jharkhand, Uttaranchal and West Bengal, is also contemplating entering into similar tie-ups in Andhra Pradesh and Tamil Nadu.

As part of its consumer engagement programme, Frito Lay today launched four new flavours in the domestic market. The four flavours were shortlisted from 1.3 million ideas that came from consumers, each of whom got Rs 5 lakh for their ideas.

“We are running a 10-month campaign and based on the maximum consumer votes, the best ideator would get a cash prize of Rs 50 lakh and 1 per cent of sales revenue,” she said.

Stating that the branded salted snacks market in India is pegged at Rs 2,500 crore of which the potato chips segment accounts for Rs 1,250 crore, Jaitly said the company was scaling up its manufacturing capacity at its Kolkata plant by 30 per cent by July this year.

“We have replaced palmolein with rice-bran oil and had been able to achieve 40 per cent saturated fat reduction since 2007. Now, we are attempting to cut various products’ average sodium and added sugar per serving by 25 per cent each in a couple of years,” said TSR Murali, director (R&D – food and beverages) of Frito Lay India.