Snackonomics

by Russ Roberts on August 22, 2011

in Podcast

This week’s EconTalk is Brendan O’Donohoe of Frito-Lay talking about the snack business–how chips are made, shipped, and sold. The podcast was made after a tour of a local Safeway and Brendan let me see the store through his eyes. Amazing. I also discovered how they make sure that bad chips don’t make it into the bag. Hard to believe. But evidently true. Listen in.

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{ 14 comments }

Speedmaster August 22, 2011 at 12:43 pm

Fantastic podcast. I love these off-the-beaten-path interviews. I learned quite a few things, most interesting, that they have a modern facility here in Rochester, NY.

jjoxman August 22, 2011 at 1:43 pm

I love this one. Nothing helped me more as a business professor than touring several production facilities. Including a brewery (yum!).

Bill August 23, 2011 at 7:27 am

Brewery tours are about as awesome as it gets! … to ah … enhance one’s understanding of … ah … business. Yeah. That’s it!

That being said, I love these kinds of interviews as well!

Doc Merlin August 22, 2011 at 1:44 pm

Best hour and a half I have ever heard on the salty snacks business.

Seth August 22, 2011 at 1:58 pm

I once ran into the Hostess cupcake vendor at a local store and got a glimpse of the profit motive working to give people what they want and to maximize the performance of the company, without ‘greed’.

I wrote about it here:
http://ourdinnertable.wordpress.com/2010/03/20/the-market-in-action/

Matthew August 22, 2011 at 9:20 pm

Surprised I didn’t hear crunching in the background throughout the podcast. Great willpower, Russ!

Mark August 22, 2011 at 10:47 pm

Fantastic!

Chucklehead August 23, 2011 at 3:48 am

I have seen a similar optical inspection system used by Uncle Bens to inspect every single grain of rice for size and colour as a curtain of rice flows down and a puff rejects a individual grain. Amazing.
What stood out was the level of obsessive detail that they go through to produce and present the product. This exceeds the customers expectation by such a level that most are unaware that it exists. Compare this thoughtfulness on such a inconsequential item as snack food to how congress throws together something as important as health care (we have to pass it to know whats in it.)
Although Frito is truly proficient, there is still a tremendous variety of niche manufacturers able to survive with less efficient technologies.
It was interesting to see that they held a zero carbon footprint more than the highest value use of their waste stream. It sounds like they are cooking their biomass to produce methane to run their plant to augment their green energy initiatives. I would think that producing potato vodka and selling the waste for feed would yield a better return. I am sure Pepsi makes a suitable soda mixer.
Finally, may I be so bold as to recommend you update the econtalk intro music? When I first heard it it was interesting because the instrument was unidentifiable. Over the years my impression has changes and it now sounds a bit sad and melancholy.
Thank you for a enlightening and free podcast.

Seth August 23, 2011 at 11:25 am

I appreciated your slight throat clearing when your guest explained that the biomass energy projects were profitable with “government subsidies” factored in. Incentives matter.

Doug August 23, 2011 at 12:45 pm

Darn you Russ! I find myself looking at EVERY FREAKING POTATO CHIP at lunch time after listening to the podcast :)

Mike August 23, 2011 at 8:43 pm

This was a great podcast. I really enjoyed the descriptions of how they handle the quality process and how they handle peak demand

Pugsley August 25, 2011 at 4:25 pm

I thoroughly enjoyed this podcast; as well as the one with you did with Ms. Abdallah on operating her hair salon several months ago. They provided a fascinating insight into aspects of the economy that are far more complex than I would have ever imagined.

Thank you and your team for the podcast, as always.

Kryx August 25, 2011 at 9:54 pm

Great podcast – had to go grab some chips though after I heard it. When I worked at Wal-Mart (15 years ago), I always wondered why the Frito Lay stocker were independent works from the company. How are you going to top this one? What is the next subject?

David August 26, 2011 at 5:51 pm

Prof. Roberts – your tangent about what I can only call the ‘process’ of playing beer pong is priceless. What else would you use a ping-pong ball for?

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