FRITO-LAY CORPORATION

FRITO-LAY CORPORATION. Frito-Lay Corporation, food manufacturer, developed during the height of the Great Depression in 1932, when Elmer Doolin bought the recipe for the original "Fritos" along with thirty-nine retail accounts from a Mexican in San Antonio. Doolin began to manufacture the tortilla-related chip with the help of his father, brother, and mother, who constituted the first board of directors. After a period of home production using a potato ricer, the company moved its headquarters to Exchange Park in Dallas and established a plant in Tulsa, Oklahoma. The first company newsletter, the Frito Bandwagon, was published in 1934, and in 1938 the company established its first research and development laboratory in Dallas. A Los Angeles plant opened in 1941, and Frito National Company was formed to grant franchises to producers in other regions. The company's first licensee, H. W. Lay and Company of Atlanta, was a potato-chip factory owned by Herman Lay. In 1945 the Frito Sales Company opened at Dallas and separated sales from production. The first employee-pension plan was introduced in 1943 and a personnel department in 1948. Frito diversified in 1935 to make potato chips, and in 1947 established a plant at Denver solely for the production of "Ta-tos." Using the slogan "Golden Chips of Corn" selected in a 1945 contest, Fritos products won popularity with servicemen during World War II. The firm began national magazine advertising in 1948, sponsored early television shows, and in 1952 added an advertising and public-relations division. Also in that year the company purchased Champion Chili of Dallas and added to its product line chili, tamales, barbecue, wieners, and barbecue sauce; the firm later acquired Grandma's Cookies in Oregon and produced Frito Brand Peanut Butter Sandwiches known as Efsees, Frito Brand peanuts, Fluffs (a pork-skin product), Chee-tos, and Doritos. In 1950 the company developed its Research and Experimental Farms thirty miles south of Dallas, near Midlothian.

In 1961 Frito merged with the Lay Company to form Frito-Lay and in 1965 became a major division of the newly formed Pepsi Company, known as Pepsico. Plants were added in Hawaii and Venezuela and numbered more than fifty in 1955. During the 1960s Frito-Lay had a 40 percent market share and was the nation's largest consumer of peanut oil, but still packaged its products by hand. An ethnic controversy developed over the firm's use of a mascot, the "Frito Bandito," in advertising. 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 distribution network of 9,000 salespeople who visited stores, both large and small, on a weekly basis. Other controversial company policies included pricing to benefit large-scale buyers and attempting to corner the peanut-oil market. In 1984 Frito-Lay became the first corporate sponsor of TexArt/150, a program of art exhibits and projects for the Texas Sesquicentennial. In the 1990s the company was the nation's largest producer of salted snack food.