FRITO-LAY

BRAND NAME COOKING WITH FRITO-LAY

The official company website:  Frito-Lay

HISTORY

The following is an excerpt from the book Ideas that Became Big Business by Clinton Woods. Published by Founders, Inc. Baltimore, MD, 1959, 414 pages.

Buy this book: Ideas That Became Big Business

The Fritos Story

His small ice cream business was threatened with failure by a price war. A depression made new ventures risky. But Charles Elmer Doolin discovered a new frontier, backed his idea with $75 and in 27 years had built a $50 million plus business.

"In 1932, 29-year-old Charles Elmer Doolin was having a rough time trying to keep the doors open to his Highland Park Confectionery in San Antonio, Texas. At the time, Doolin was manufacturing a high quality ice cream. With the constantly dropping prices of the depression days, his big competitors became involved in a price war. So with this squeeze play on, Doolin began looking around for some other business that was promising, but less competitive.

Doolin knew that finding a new opportunity wouldn't be easy. He already had discarded countless ideas which on the surface appeared to have good potential, but on further investigation proved hopeless during the dark days of 1930 and 1931.

There was the idea he had about taking an ancient product, the Mexican tortilla, and making something new out of it. But wherever he turned, he was informed that it was impossible to make a profit out of such a product due to a staleage problem. However, one idea stuck in his mind. He had noticed that in stores that sold his ice cream, potato chips were displayed in glass jars and he felt that it would be much better to display this merchandise on racks. But merchants told him that the glass jars performed the important function of preventing customers from stealing the potato chips because the lids rattled when a customer took them off to get at the product.

One September day in 1932, Doolin stopped in at one of his ice cream accounts to order a 5-cent sandwich for lunch. Awaiting his order, he spotted a crude package that intrigued his curious mind. A closer examination revealed an even cruder product, one much like the offspring of the tortilla he had considered. Right then, Doolin made an investment that was to change his life forever. Instead of a 5-cent lunch, he splurged to a 10 cent one--a nickel sandwich and a package of corn chips.

After his lunch, Doolin sought out the maker of the corn chips who turned out to be a Mexican, eager to get back to his native land. So for $100, the Mexican sold Doolin his recipe for corn chips and the crude equipment he had for manufacturing them--an old converted potato ricer that was used to extrude dough into boiling vegetable oil.

Of the $100 investment, young Doolin was able to supply only $75. He had to borrow the remaining $25.

Doolin's greatest champion was his mother, Mrs. Daisy Dean Doolin, and together they began making FRITOS corn chips in Mother Doolin's kitchen. Production capacity was about 10 pounds an hour with total sales running about $8 to $10 a day. Profits sometimes amounted to as much as $2.

Gradually sales picked up and a number of production problems arose. Doolin was all alone in the business of manufacturing corn chips and so he began developing his own manufacturing equipment. A press was developed--replacing the converted potato ricer--that was much more efficient even though it had to be struck with a hammer to cut the strips of dough.

In order to wash the husks from the whole grain corn, a concave-shaped wire screen was developed into which the corn was poured. An employee then turned a hose of water onto the corn with one hand and rubbed the corn against the wire screen with the other. This kept the feet nice and cool in the summer, with the water running down on them, but it made for more than a few bad colds in the winter.

As the company expanded, Doolin took to the road to help open up new outlets and territories for his FRITOS corn chips. In his Model T Ford, he slept in front of some of the best hotels in Texas. And in St. Louis, he took a job as a cook at night because he couldn't afford to pay himself a salary.

On these selling jaunts, Doolin was able to try out his theory on display racks. He built the racks, placed them and proved to dealers that not only did the glass jars keep customers from stealing merchandise, but they kept customers from buying as well. About this time, Doolin's mother originated the idea of cooking with FRITOS and developed recipes for consumers to use.

In 1933, Doolin moved The Frito Company's headquarters to Dallas, thinking that the city should be the geographic center for his distribution in the Southwest. A plant was opened in Dallas and soon after plants were opened in Tulsa and Houston. Later plants were added in Amarillo, Texas and Denver and a long move was made to Los Angeles in 1941.

Just when it appeared that the company was finally on the move in a big way, it found its expansion and sales blocked by World War II and rationing. But in 1946, it got rolling again and began granting franchises in many parts of the country to businessmen, many of whom had heard of FRITOS while on military duty in Texas. Too, some of these franchise companies were already in the potato chip business and had facilities readily available for the distribution of FRITOS.

Two other snack-type products were developed for the products line--TA-TOS potato chips and CHEE-TOS corn snacks. A number of jobbed items were added to the rapidly expanding distribution system.

With the company's continued growth, it became necessary to build a much larger organization and to have capable management supervising all phases of the operation. Specialists in finance, advertising, research, engineering and other important facets of the business were brought into the organization and welded into a strong company team that Mr. Doolin had envisioned.

In 1953, The Frito Company made its first public offering of stock which was over-subscribed within a few hours. Shortly thereafter, the company began a series of acquisitions. It purchased franchise operations in New York, New England, Pennsylvania, Ohio and Wisconsin and began consolidating these operations into a national organization.

Sales in 1953 amounted to $18 million and in 1957 they totaled $33 million. In 1958, Frito brought into its orbit with mergers the Nicolay-Dancey Company of Detroit, one of the nation's largest potato chip manufacturers, and Crispie Potato Chip Company of Stockton, California. It purchased outright the Num Num Potato Chip Company in Cleveland. Sales during that year totaled more than $51 million.

Today, FRITOS corn chips have more kissing cousins than a young man by the name of Doolin ever dreamed of. More than 30 products are produced and distributed by the company, including six major brands of potato chips in various parts of the country. And from a family kitchen operation the company has expanded into 22 plants employing more than 3,000 persons.

Thus, the innovation on an ancient tortilla has come a long way and Elmer Doolin, the founder and chairman of The Frito Company, still believes there are many new frontiers that lie ahead just as the corn chip industry was ahead of him 27 short years ago."