Hostess Potato Chips

Hostess was formed in 1935 when Edward Snyder began cooking chips on his mother's kitchen stove in Breslau, Ontario, outside Kitchener, Ontario. Potato chips remained a fairly small part of the snack food market until the 1950s, when snack foods in general became more widely available. In 1955, Snyder sold his company to E.W. Vanstone, who expanded the company greatly before selling his interest to General Foods in 1959.[1]

Hostess grew to become the #1 brand through this period and into the 1980s. Its powerful distribution channels made competing on price difficult, and shelf space for competing products was difficult to find, notably in smaller stores such as gas stations. The brand also gained a strong reputation for quality at the expense of other brands. Its packaging was instantly recognisable, featuring simple graphics and colour schemes. For much of the brand's history, only three flavours were sold; Regular in a blue package, Salt and Vinegar in yellow, and BBQ in deep red. The power of the brand was such that competitors generally used the same colours on their packaging as well, creating a standard of sorts.

In the mid-1970s, Hostess decided to expand its lineup and introduced three new flavours, Orange, Cherry and Grape. The attempt was a dismal failure, and the products disappeared from stores only a few months later. The products were so poorly received they remain a topic of derision. Newer introductions followed, starting with the popular Sour Cream and Onion shortly after the fruit flavours disappeared. This was a huge success, and was followed by a series of other now-common flavours such as Dill Pickle and Ketchup. Another success was Hickory Sticks, a hickory-smoke-flavoured potato stick variety which broke the corporate branding by using a wood-grain patterning on their smaller bags.

Starting in 1981, the chips had new mascots known as the Munchies, that were used for advertisements and appeared on the chip packaging. The Munchies were three friendly, goblin-like creatures coloured red, orange, and yellow.

The introduction of corn chips to the market led to a partnership between Hostess and Frito-Lay (owned by PepsiCo) in 1987, bringing Doritos to Canada for the first time (Doritos were in Canada in the late 1970s). This move was followed by the introduction of other Frito Lay brands, including Ruffles, Tostitos and Cheetos (Lay's, Frito Lay's major US chip brand, was already being licensed for Canadian manufacture by another company). Hostess remained the major chip brand in Canada even after the arrangement. The partnership led to a merger in 1988, with the joint company known as Hostess Frito Lay. In 1992 PepsiCo acquired full ownership of Hostess by buying out General Foods' remaining interest.[2]

Through the 1990s a number of "boutique" brands introduced a wide variety of new chip flavours, a pattern that Hostess did not follow. Its brand value was enormously eroded, and they became known as a low-end brand in the same fashion that former Hostess competitors found themselves pushed into for many years. They retained their #1 position, but slipped in sales terms to holding about 10% of the market by the mid-1990s.

Hostess products were replaced or rebranded after the merger; Hostess Taquitos became Zesty Doritos; Cheddar and "nacho"-flavoured Crunchits were supplanted by corresponding flavours of Crunchy Cheetos (BBQ Crunchits had long been out of production).

With the brand popularity falling, in 1996 it was decided to re-brand the product as Lay's. This change presented no small amount of difficulty, as the product was already on sale in Canada via a third party. An aggressive advertising campaign by BBDO Canada featuring famous hockey players such as Mark Messier and Eric Lindros launched the "new" brand in 1997, and within eighteen months Lay's was selling twice the volume of products that it had been under the Hostess moniker.[3] Hostess has largely disappeared, and the company dropped "Hostess" from its name, becoming Frito Lay Canada.

The only remaining major Hostess retail product is Hickory Sticks, a flavoured potato stick brand which maintains broad distribution on par with other Lay's Canada brands.