07 Apr 11 Pringles – once a flop, now sold for billions
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In announcing the sale of Pringles this week, Procter & Gamble concluded what had been a tumultuous, sometimes zany, 50-year experiment in engineered food.
The $2.35 billion deal with Diamond Foods is also a milestone for Procter as it sheds its last food brand after having already sold Jif peanut butter, Folger’s coffee and Crisco shortening.
The company’s expertise in edible oils was used widely by the potato chip industry in the 1950s and 1960s, and shaped the invention of Pringles, the thinly sliced saddle-shaped crisp.
In the 1950s, roughly 25 percent of P&G’s sales were in food, particularly in shortening and other cooking oils.
“We provided most of the oils to the potato chip industry,’ says Greg McCoy, a corporate archivist. “We were already frying up potato chips to test the oils.”
But it lacked a distribution network to ship perishable bags of chips to grocery stores, so it directed its researchers to come up with a longer-lasting chip that could be distributed with P.& G.’s existing distribution network.
“They knew from the get-go that they wanted it to be uniform in size, texture and taste,” McCoy said. Procter wanted to create a perfect chip to address consumer complaints about broken and stale chips and air in the bags.
Company officials still aren’t sure how the chips got their name, but one theory holds that two Procter advertising employees lived on Pringle Drive in Cincinnati and the name paired well with potato.
The creator of the famous Pringles can was so proud of his invention that he asked that his ashes be buried in one.
Yet Pringles, which is basically dehydrated potato flakes that are rolled and then fried, was not universally loved.
It was such a dud in its early years that some called for Procter to dump the brand. The brand did not take off until the company tweaked the flavor in 1980 and introduced the “Fever for the Flavor of Pringles” advertising campaign.
By the late 1990s, Pringles had become a $1 billion a year brand. On the television series “Ally McBeal,” Ally got into a grocery store skirmish with a woman over a can of Pringles.
“When I was there 30 years ago, it was dead,” says Charles Jarvie, vice president of Procter’s food division in the late 1970s. “It’s a great example where they just didn’t give up.”……