For many years, the 7-Eleven convenience store chain has been the most successful provider of our everyday needs.   7-Eleven began catering the “dashboard diner” in 1997. A “dashboard diner” is a consumer who frequently chooses to eat in his car on the run.  Some items that 7-Eleven has created to directly target this market segment are the Burger Big Bite, El Taco, Bakery Sticks, as well as a few others.  In early 1998, Jim Keyes, chief operating officer of 7-Eleven had the idea to develop a new product to target the dashboard diners.  

This addition was to be the Frito Pie.  This food item was already well known in some parts of the United States.  The original recipe for the Frito Pie is to add chili and cheese to a bag of Fritos, and mix the ingredients together by simply shaking the bag.  This sounds very messy. .   Keyes believed that there was room for refinement and expansion.

Keyes believed that the logical next step in the pursuit of pleasing the dashboard diner segment would be distributing a prepackaged version.  The prepackaged version of Frito Pie would be an efficient alternative to the original sloppy technique.

Unfortunately, 7-Eleven had experienced issues with some of its past endeavors, namely, its nachos and soups.  The 7-Eleven Nachos, which were Tostitos with cheese sauce, had problems during shipping as well as shelf stocking which resulted in far too many chips being broken.  This attempt lasted only one month before it was abandoned.  Also, 7-Eleven introduced soups to the fast food menu.  Alas, they found that too much attention was needed from the store employees in order to keep the products running smoothly.

These were problems and setbacks that 7-Eleven did not wish to repeat.  This meant that the introduction of Frito Pie would challenge the company to solve the many past issues with distribution and packaging.  The companies were aware of the problems, but were unaware of how exactly to solve them.

Several combinations of Frito Pie packaging were tested.  Keyes wished to give his customers a fresh-looking food item, however, he did not want them to be packaged in bags, like other items already available on 7-Eleven’s shelves.  On the other hand, Frito-Lay wanted to guarantee that its chips would be fresh, and therefore enclosed neatly in bags.  Each partner having its own best interests in mind, this conflict proved to be long-lived.

Due to the fact that Fritos lose their crunchiness after having been exposed to air for a long period of time, guaranteeing they were in a sealed package was very important.  After careful deliberation, and assistance from a food marketing agency, Noble and Associates, a few options were agreed upon.   Chips could be place in a sealed tray accompanied by chili and cheese in a combination cup.  The second option would be to place the corn chips in a bag and distribute separate cups for chili and for cheese.  It was also taken into consideration that pumps for hot dog toppings had recently been installed throughout the chain.  Although the two companies had come to an agreement on these options, there were still many remaining issues to be dealt with. 

            First of all, Mr. Keyes could not decide on a pleasing tray design.  He felt that most of the prototypes being introduced to him were “hokey”.  Also, Frito-Lay refused to let the issue of packaging the chips in bags be dismissed.

 

            Finally, an idea for a compromise was reached for the Dallas market test by May of 1999.   Frito-Lay agreed to use trays instead of bags for the Dallas launch, but not on subsequent launches.  Also, Frito-Lay insisted on delivering the trays to insure chip freshness.  The final product to hit the Dallas area was a sealed rectangular tray of Frito Scoops.  The customer was free to add the desired amount of chili and cheese from already placed toppings pumps. 

            Although this product was deemed a success, evidently there are still many issues.  It is difficult to fathom that a dashboard diner, a customer in such a hurry, would stop and try to figure out how the product is put to together.  New customers would also be reluctant to interpret its assembly.  The product is very messy, and would be most difficult to eat in a hurry, or in a car.  Also by adding the free chili and cheese the employees are accepting the responsibility of maintaining the pumps and restocking the area.

            It seems that, instead of just introducing a new food item into a growing market, 7-Eleven created more problems for an incredibly simple end result.  The methods in packaging and distribution of the 7-Eleven Frito Pie seem to be similar to the problematic methods involved in two already failed products, the 7-Eleven Nachos, and the 7-Eleven Soups.  The packaging already proved unsuccessful in the nachos attempt, and the added trouble of the soup station proved not to be worth the trouble.  How can this amalgamation of two recent failures be anything but a new failure?

            Our recommendation is to use different packaging and distribution methods for the entire product.  The item would be self-contained, in a sealed, three-segment, microwaveable container which houses the three ingredients separately.  The package could be opened by the customer, the ingredients combined in one of the sections of the container, and microwaved on location.

The product would be shipped under refrigeration, assuming that the chosen recipe for chili needs refrigeration.  Refrigeration would, of course, cause no harm to the chips or the cheese packaged with the chili.  Also, the product could be shelved in the deli section of the store, which is situated very near the microwave unit.  If, however, the chili needs no refrigeration, the distribution becomes less problematic, as does the issue of stocking the item.  It could then have shelf space next to other chips.

An alternative to this route is one that involves the packaging and distribution scheme agreed upon earlier by Frito-Lay and 7-Eleven.  This strategy would involve reintroducing the nachos and soups.  Since the Frito Pie distribution would call for a station to be dedicated to some of its ingredients, adding soup to the bar would add minimal cleanup and stocking responsibility for the employee.  Also, the cheese for the nachos could be the same source of cheese for the Frito Pie.  The reintroduction of these two past attempts would be a relatively simple endeavor next to the introduction of the Frito Pie, and the cross-usage of supplies would increase profitability.