How Frito-Lay Can Take Their Compostable Packaging Failure Out of the Dumps

This post is part of a year-end series by MBA students at California College of the Arts’ Design MBA Program. Read more about our annual partnership here.

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By Amy Guittard

About a year ago, Frito-Lay, a division of PepsiCo, ventured into the realm of sustainable packaging and launched a much-anticipated 100% compostable bag for SunChips®—their multigrain snack brand.

The problem? The bag made a lot of noise. Consumer complaints inundated the company (yes, it was that loud!) and sales dwindled. As a result, Frito-Lay reverted to their petroleum-based (decidedly non-eco friendly) bags for all but one flavor in their line—not great for their reputation as an innovative company or for the compostable movement at large.

One has to give credit to Frito-Lay for identifying a problem, recognizing a need and acting on it by developing an innovative, eco-friendly solution. When Fortune-500 players enter the realm of organics and sustainability, they bring a new awareness to a demographic that may otherwise be unfamiliar with the notion of sustainable living. But what message does it give already-skeptical consumers when an innovation like compostable packaging, that happens to be one step in the right direction, is recalled from the shelf due to consumer complaints?

Can failed environmentally-friendly innovations, especially when at the hands of highly visible players, push the sustainability movement two steps back instead of two steps forward? 

When “sustainability” as broad of a term as it is, gets integrated into the every day, there is an opportunity to inspire a new level of awareness. Fortune-500 companies, like Frito-Lay, play an important role in successfully converting naive or resentful adopters but their actions can also have detrimental impacts on the relative adoption should they not deliver on the initial “needs” of the consumers. Frito-Lay showed that progressive packaging was possible; they also showed that the allure of saving the planet one bag at a time is not enough of an incentive to inspire buying—product deliverability always gives way to environmental do-good gestures. Frito-Lay’s success, as with any profit-driven business, depends, in part, on the amount of product sold. If the bonus factor, such as an environmentally friendly snack bag, does not deliver the product better than before, the business suffers, consumer ambassadors are lost and the solution most likely nixed in favor of boosting the bottom line.

The problem with Frito-Lay’s first iteration was that it changed too much of the current packaging. For innovative solutions to truly win, consumers need to embrace them; for that to happen, the solution needs to improve that which it replaces. Though the compostable bag is a tremendous improvement from an environmental standpoint, it did not develop the function of the bag. Instead of eating a chip and realizing that they were doing the environment some good, consumers ate a chip and were turned off by the loud noise the packaging made; the environmental gain was detrimental to sales rather than beneficial.

This was an expensive learning experience that could have been avoided should Frtio-Lay have pursued consumer incentive and insight and folded those findings into their innovation process—crucial design thinking principles central to developing an innovation that delivers on multiple consumer needs and sticks with buyers.

Going back to the drawing board, Frito-Lay has an opportunity to take this lesson and build a better bag than that which currently exists. Instead of innovating something that delivers solely on the environmental message, they need to build something that actually fulfills the need-—a consumer-friendly eating vessel (for lack of a better term) that also solves a sustainable pain point.

Framing the problem, asking the right questions and ideating a variation of out-of-the box ideas will get them to true innovation that wins over their snackers. Integrating a human-centered emphasis on their solution can increase their “success”—something they may measure in increased sales but also in consumer engagement with the product and environmental messaging. If done properly, Frito-Lay could tap into a huge education opportunity, informing consumers on the cause and potentially recruiting adopters to the sustainable movement.

Frito-Lay tainted the perception of eco-friendly packaging simply by poor execution. Instead of just adding a sustainable stamp of approval, their next compostable package cannot jeopardize the integrity of the product itself nor can it jeopardize the consumer’s experience with that product. Testing their designs without assumption will lead them down a path toward a more sustainable packaging solution (pun intended). Employing design research techniques to inform their future designs will clue Frito-Lay into what really matters to their consumers. This approach will yield sticky solutions that inspire purchasing and consumer activism, and what company would not want that?

These articles were created as part of the course work for “Live Exchange” the foundational course on communication for The MBA Design Strategy Program at California College of the Arts. Read more about the project here.

9 responses

  1. I’d be curious to know how many complaints they got in total or if this was another case of an anecdotal issue being overblown.

    Particularly as I am sure they tested the packaging through focus groups, which should have brought this issue to light early on.. if it really was an issue.


  2. Was the issue with the packaging really consumer reaction to the noise level? I’m more concerned that the bags won’t compost in a home composting pile and few consumers have access to the “hot, active compost” required to make the bag breakdown. Back the drawing board indeed!

  3. I don’t agree that for a product or innovation to be embraced it needs to improve its basic function. Look at disruptive technologies that will typically have reduced capability but satisfy a different set of consumers. In my opinion this is a marketing issue more than anything. The compostable bag is being pushed in Canada now ( using some fantastic marketing techniques such as offering earplugs to consumers. It will be interesting to see how well this works and if it may encourage PepsiCo to sneak the new packaging back onto shelves in the US.

  4. It sounds like a good idea on paper, but ummmm, how many people do you know that are composting their chip bags? Some of this green stuff is just rediculous. Newspapers last for years in garbage dumps. They are designed that way so there are less chemicals seeping down to the bottom where they can pose an environmental problem.

    The only ‘green’ solution to packaging is less packaging.

    1. You couldn’t be more wrong that the only sustainable packaging is less packaging. There are so many elements that go in to the sustainable packaging equation. Less is not always open.

  5. I think if they decide to go back to the eco-friendly packaging, it will be in their best interest to test the product and like the article mentioned, “tap into a huge education opportunity, informing consumers on the cause and potentially recruiting adopters to the sustainable movement.”

    I think consumers liked the fact they were helping the environment, but that feeling couldn’t override the annoyance of the loud bag.

  6. Next time the Frito-Lay company just need to add a free bowl with it where the chips can be put in to. That will bring the noise down to a minimum and is the lay bag still good for the enviroment. Bring the bowl in 6 colours and people can choose their bowl, and re-use it later.

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