Pringles: Brand Profile

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Stacked snack Pringles grew to become one of Procter & Gamble's biggest brands with annual sales rising to around $1.45bn by 2011. It was also the company's most global product, distributed in more than 140 countries worldwide. Yet despite its value it had become something of a problem child for the group. By 2010, it was the only edible in P&G's huge portfolio of products, and its development had long been hampered by the lack of a wide-reaching distribution network, like that available to its arch-rivals Lay's and Ruffles, owned by PepsiCo's Frito-Lay. As a result, Pringles had been considered a prime candidate for sale for several years. An attempt to shift it into a joint venture with Coca-Cola at the end of the 1990s was blocked by shareholders. A subsequent deal was agreed in 2011 to spin the brand off into snack marketer Diamond Foods, but that arrangement too was derailed as a result of a financial scandal at the smaller company. Finally, a new deal was inked in early 2012 with Kellogg's, transforming that company's snacks business, especially in Europe.

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Free for all users | see full profile for current activities: Although it only began to take the world by storm during the mid 1990s, the Pringles brand is actually almost 50 years old. Pringles were first conceived in the late 1950s, almost by accident. Among the vast number of details uncovered by P&G's painstaking research into household buying habits was the fact that American consumers were frustrated by the fact that potato chips were always irregular in size, got broken easily in their soft bags and went stale quickly. Typically for the time, the company decided to explore this nugget of data more methodically, and spent the next 10 years tinkering with different sorts of potato chip products.

Pringles were first introduced in 1968. The chips were made from reconstituted potato flakes, moulded and fried. Answering those original consumer negatives, they were made to be identical in size and shape, were packed in protective tennis ball tubes, and had a 15-month shelf life. The name was chosen from a long list assembled by a P&G researcher, who had scoured the local phone directory for a list of street names in Cincinnati (where P&G is based) beginning with the letter P. Pringle Avenue in the suburb of Finneytown was available for trademark. The mustachioed brand mascot was introduced at the same time on packs of the product, and baptised as "Julius Pringles". The snack was launched locally that year in what has become its familiar cylindrical can, then extremely futuristic. It was rolled out nationally in the US in 1972. Despite initial reservations from retailers, Pringles were almost immediately successful with shoppers, for exactly the reasons those consumers had identified years before. By 1974, Pringles was the #1 potato chip brand in supermarkets. But a year later, sales began to fall sharply. A new light version was introduced in 1981 and again lifted sales, but again only temporarily.

For the next 10 years Pringles remained a comparatively undistinguished member of the P&G portfolio. Sales remained satisfactory but didn't really grow consistently. Despite P&G's claims that it was among the company's most profitable brands, marketing pundits generally wrote Pringles off as a flop. The biggest obstacle facing the chips was the fact that P&G's distribution network was strong with larger retailers, but failed to reach convenience store outlets where most potato chip impulse purchases are made. The next stage in the brand's development also happened by accident. By 1990 the single factory in the US where Pringles were manufactured was producing more chips than could be sold locally. As a result, P&G's export department was tasked with disposing of the balance of Pringles manufactured, and so more or less dumped them in the European market. The first port of call was Sweden in 1990, where they proved a surprise success. Introduced almost without marketing in the UK a year later, they were an immediate hit there as well. The launch in Germany in 1992 was supported by a modest ad campaign, and the brand took joint second-place in the market within six months.

The next breakthrough came mid-decade, following P&G's development of olean, a fat-free oil. Fat-Free Pringles were launched in 1996, and gave a lift to US sales. Meanwhile, international sales had by now spread to more than 40 countries, with the brand's total sales more than doubling from around $400m in 1996 to almost $1bn. It was obvious that the next real difference in the market would be made by getting distribution to smaller grocery outlets, taking consumption out of the home and onto the streets. In 1999, P&G and Coca-Cola agreed the terms for an important new joint venture that promised to solve exactly that problem. At the time, Pringles were only available in around 10% of the 16 million retail outlets worldwide supplied by Coca-Cola. Mirroring the success enjoyed by PepsiCo, which was able to distribute its soft drinks and salty snacks via a single network to the smallest outlets, P&G agreed to combine its Sunny Delight and Pringles brands in a joint venture that would have full access to Coke's unrivalled network. Unfortunately for P&G, it was not to be. Analysts and shareholders were very unhappy about the apparent imbalance between the assets contributed by the two companies, and the venture was eventually abandoned.

Meanwhile, Pepsi's Frito-Lay division finally responded to the threat provided by Pringles when it began testing a stacked snack of their own. Developed in 1999 as a reaction to the possible threat from the Coke-P&G tie-up, Frito-Lay Stax began testing in 2000. Despite attempts by P&G to block the product for patent infringement, Stax were cleared for national launch in late 2002. P&G got their own back at Frito-Lay, launching similarly stackable tortilla chips under the Torengos brand name in 2001.

As competition between the rivals became more intense, production of Pringles in the US was briefly suspended in 2003 after a tornado hit its only manufacturing plant in the country. See full profile for current activities

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