Filed under: Company News, Pepsico, Food & Beverage, Restaurants, Investing
The latest Papa John’s (PZZA) television commercial features pizzeria founder John Schnatter and Denver Broncos quarterback Peyton Manning talking up the Fritos Chili Pizza. The chain’s latest specialty pie substitutes chili sauce for marinara. It is topped with beef, tomatoes, onions and — more important — a handful of PepsiCo’s (PEP) Fritos corn chips.
“I can’t believe it took me 30 years to put Fritos on a pizza,” says Schnatter.
Three decades may be a long time, but the only real surprise here is that Yum! Brands’ (YUM) Pizza Hut didn’t beat Papa John’s to the punch.
All in the Family
Papa John’s is a friend of PepsiCo, the food giant behind the namesake soda and Frito-Lay empire of salty snacks. Papa John’s is one of the few national pizzerias to stock Pepsi products, choosing to offer Pepsi, Sierra Mist and Mountain Dew instead of the more popular Coca-Cola (KO) line of carbonated beverages.
The same can be said about Pizza Hut. It’s been choosing Pepsi over Coke for ages. However, Pizza Hut’s affiliation with PepsiCo runs deeper than the association between PepsiCo and Papa John’s. In fact, Pizza Hut and Fritos parent Frito-Lay are siblings. PepsiCo owned Pizza Hut, KFC and Taco Bell before spinning off the three quick-service chains in 1997. Pizza Hut reportedly has a lifetime contract to serve Pepsi’s beverage products. It would have only made sense to roll out a Fritos-topped pizza through Pizza Hut.
It’s not as if Yum! Brands is a stranger to the magnetism of PepsiCo’s Frito-Lay. It leaned on another Frito-Lay staple — Doritos — to introduce the Doritos Locos Tacos at Taco Bell two years ago. The offering has been a colossal and crunchy hit. Yum! Brands announced earlier this year that it has sold more than 825 million of the tacos served on Doritos-flavored shells, making it the most successful launch in the fast-food chain’s history.
Thinking Outside of the Pizza Box
The runaway success of Doritos Locos Tacos should have inspired PepsiCo and Yum! Brands to work more closely together. The two corporate siblings could’ve put out Cheetos-breaded chicken tenders at KFC or a Tostitos-topped Mexican pizza at Pizza Hut.
It hasn’t happened — yet. Then again, it’s not as if Doritos Locos Tacos was an in-house concoction at either company. The origins of the treat go to 2009, when a fan of Taco Bell and Doritos wrote Yum! Brands to suggest that a new taco be introduced, served in a Nacho Cheese Doritos shell. His idea was shot down, but Todd Mills didn’t stop there. He launched a Facebook group inspiring the movement that went on to attract thousands of followers. Three years later, Taco Bell invited Mills to its test kitchen to be one of the first to try the new treat.
If the Fritos Chili Pizza is a hit, we can argue that Pizza Hut missed the boat. Instead of trying to appeal to foodies with new gourmet pies, it should’ve gone the other way, channeling the “Frito pie” fare that’s popular at some regional amusement parks and carnivals.
Whether it’s a hit or not, someone should go ahead and launch a Facebook group movement in support of Cheetos-breaded chicken at KFC. There may be something there.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola and PepsiCo. The Motley Fool owns shares of Papa John’s International and PepsiCo and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.
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Source: Investing
