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FRITO-LAY CORPORATION

FRITO-LAY. Frito-Lay, food manufacturer, is the result of a merger between the Frito Company based in Dallas and H. W. Lay and Company based in Atlanta. 

The Frito Company was born in 1932 at the height of the Great Depression. The family of Charles Elmer (C. E.) Doolin owned the Highland Park Confectionary in San Antonio, and Doolin, twenty-eight at the time, wanted to add a salty snack to their repertoire. He responded to an ad in the San Antonio Express. The ad, placed by Gustavo Olguin, listed for sale an original recipe for fried corn chips along with an adapted potato ricer and nineteen retail accounts. Doolin bought the small business venture for $100, and began to manufacture the chips in his mother’s kitchen with the help of his father, Charles Bernard Doolin; mother, Daisy Dean Stephenson Doolin; and brother, Earl Doolin. These four founders made up the first board of directors, with Charles Bernard Doolin serving as the first chairman.

Soon afterward, the company hired its first employee, Jim Jones. Another employee, Ruth Ragsdale, followed, and the company moved its operation into the garage behind the Doolins’ house at 1416 Roosevelt Avenue in San Antonio. The Doolins eventually bought the house next door to accommodate the growing industry. In 1933 C. E. Doolin licensed two men to make corn chips at a plant located at 1405 N. Haskell Avenue in Dallas. This business venture failed after five months; the operation was purchased by the Doolin family and became the family’s second Frito-manufacturing plant. At about the same time, C. E. Doolin opened a separate corn-chip manufacturing business, independent of his parents and brother, in Tulsa, Oklahoma; this began operations in 1934 and was later taken over by the family and became yet another Frito-Company-owned plant.

Shortly after C. E. Doolin opened the plant in Tulsa and acquired the plant in Dallas, he moved the company headquarters to Dallas so it would be centrally located. Four months later a branch plant was opened in Houston. Also in 1934, in order to qualify for bank loans, Frito diversified into making potato chips, which they named Fritatos (later renamed Ta-tos). In 1937 Efsees peanut butter cracker sandwiches, named after the initials of the Frito Company, made their debut; also in 1937 Cheez-Sans cheese cracker sandwiches and Frito peanuts were introduced. In 1939 the company began producing fried pork skins (later called Fluffs).

In 1935 the company began an advertising campaign offering Texas housewives one dollar for each recipe they sent in containing Fritos as an ingredient. The company printed some of these recipes—ones that were seasonally appropriate—on tear sheets and placed them with the products in grocery stores. The recipes were also included in printed folders that could be ordered by consumers through the mail. In 1937 this campaign was formally named “Cooking with Fritos.”

In 1938 the company established its first research and development laboratory in Dallas. In the lab, the company did quality control testing for freshness and experimented with creating new and improved ingredients, such as unique cooking oil blends. A Los Angeles plant opened in 1941, and Frito National Company was formed to grant franchises to producers in other regions of the country and abroad. The company's first six licenses were sold in 1946 to H. W. Lay and Company of Atlanta, owned by Herman Warden Lay, a potato-chip manufacturer.

In 1932, the same year C. E. Doolin began the Frito Company, twenty-three-year-old Herman Lay started a potato chip route in Nashville, Tennessee, and distributed the products of the Barrett Potato Chip Company of Atlanta. A couple of years later he had six men working five routes. By 1939 he had bought out the Atlanta and Memphis plants of the Barrett Company as well as the brand name of one of his competitors, Gardner’s; moved from Tennessee to Atlanta; and named his new business H. W. Lay and Company. In that same year he produced his new company’s first manufactured product, Lay’s Tennessee Valley Popcorn. In 1942 he moved his factory to a larger location in Atlanta and began production of the first Lay’s brand potato chips. In 1944 the trademark “Gardner’s” was changed to “Lay’s.” In 1945 H. W. Lay and Company was given the exclusive franchise to manufacture and distribute Fritos brand corn chips in the Southeast.

Meanwhile, in 1945 the Frito Company also continued to grow and opened a separate new company, the Frito Sales Company in Dallas, for licensing, equipping, supplying, and supporting franchises. At the same time, a new office manager, Mary Livingston, was hired to help with marketing and organizing the newly-relocated headquarters on Cedar Springs Road. Mary Livingston and marketing department head Bill Jones began representing the company at food conventions and promoting “Cooking with Fritos” as a substantial part of Fritos marketing. This part of Mary Livingston’s job was taken over by a home economics specialist, Nell Morris, in 1950.

In 1947 the company established a plant in Denver solely for the production of Fritatos potato chips. Frito products, advertised with the slogan "Golden Chips of Corn," selected in a 1945 company contest, won popularity with servicemen during World War II. In 1948 the firm began advertising in national magazines, such as Life, Ladies Home Journal, and Good Housekeeping, and sponsoring early radio and television shows such as The Lone Ranger. In 1952 an advertising and public relations division was added. That same year the company purchased Champion Chili of Dallas and added chili, bean dip, and other canned and packaged Mexican-inspired fast foods to its product line. It also acquired Belle Products, which produced bottled and canned items such as cherries, olives, and cocktail onions, for customers on the bean dip sales route. Eventually the Frito Company added Cheetos (1948) and Ruffles (1958). In the merger with Lay and Company (1961), it acquired Rold Gold pretzels, and Ta-tos became Lay’s Potato Chips. In 1965 Frito-Lay licensed a special formula for tortilla chips from the Adams Company, located in California, and named the chips Doritos.

In 1950 the company developed its research and experimental farms thirty miles south of Dallas, near Midlothian. In 1953 it acquired Texas Vegetable Oil Company, which manufactured cooking oils such as corn, peanut, and sesame oils from the nuts and seeds grown on the company’s farms. Company manufacturing plants making Fritos and potato chips were added in Hawaii and Venezuela and numbered more than fifty in all by 1955.

In 1959 C.E. Doolin stepped down as president of the Frito Company and became the chairman of the board. He died of heart failure a month later.

At Doolin’s death, the Frito Company was worth an estimated $60 million in sales per year. By 1960 H.W. Lay and Company was worth $45 million in sales per year, having just acquired Rold Gold pretzels. In 1961 the Frito Company merged with H.W. Lay and Company to form Frito-Lay. In 1965 Frito-Lay became a major division of the newly-formed conglomerate PepsiCo. During the 1960s Frito-Lay had a 40 percent market share and was the nation's largest consumer of peanut oil, but it still packaged its products by hand. In the late 1960s an ethnic controversy developed over the firm's use of the “Frito Bandito” in a new advertising campaign and the campaign was cancelled in 1971.

By the 1980s Frito-Lay had 25,000 employees, worldwide distribution, and annual sales of $2 billion and was known for the strength of its network of 9,000 salespeople who visited stores, both large and small, on a weekly basis. By the 1990s the company was the nation's largest producer of snack food. In the 2000s the company began building “green” manufacturing plants and moving in a health-conscious direction with its products, acquiring such product lines as Naked Juice and Aquafina. By the 2010s the company, with headquarters in Plano, employed more than 48,000 people and generated more than $13 billion in annual sales. Frito-Lay products comprised approximately 62 percent of salty snacks sold in the United States.

BIBLIOGRAPHY: 

Kaleta Doolin, Fritos® Pie: Stories, Recipes, and More (College Station: Texas A&M University Press, 2011). “Our History,” FritoLay.com (http://www.fritolay.com/about-us/history.html), accessed August 14, 2013. PepsiCo: Frito-Lay Brands (http://www.pepsico.com/Brands/Frito_Lay-Brands.html), accessed August 14, 2013.

Kaleta Doolin

Citation

The following, adapted from the Chicago Manual of Style, 15th edition, is the preferred citation for this article.

Kaleta Doolin, "FRITO-LAY CORPORATION," Handbook of Texas Online (http://www.tshaonline.org/handbook/online/articles/diffs), accessed October 25, 2014. Uploaded on June 12, 2010. Modified on August 27, 2013. Published by the Texas State Historical Association.