TakeAway: In announcing the sale of Pringles to Diamond Foods for $2.35B, P&G concluded what had been a tumultuous, sometimes zany, 50-year experiment in engineered food. P&G also refocused on its core product lines.
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Excerpted from the NYTimes, “Once a Great Flop, Now Sold for Billions” By Andrew Martin, April 5, 2011
The company’s expertise in edible oils was used widely by the potato chip industry in the 1950s and 1960s, and shaped the invention of Pringles. Company officials still aren’t sure how the chips got their name. Pringles are basically dehydrated potato flakes that are rolled and then fried, but they were not universally loved initially. The product was such a dud in its early years that some called for P&G to dump the brand. The brand did not take off until the company tweaked the flavor in 1980 and introduced the “Fever for the Flavor of Pringles” advertising campaign. By the late 1990s, Pringles had become a $1 billion a year brand.
The sale of Pringles was not unexpected, as Procter has refocused its attention on the core businesses of beauty, grooming and household care.
In the 1950s, roughly 25% of the company’s sales were in food, particularly in shortening and other cooking oils. But P&G lacked a distribution network to ship perishable bags of chips to grocery stores, so it directed its researchers to come up with a longer-lasting chip that could be distributed with P&G’s existing distribution network. P&G wanted to create a perfect chip to address consumer complaints about broken and stale chips and air in the bags.
Officially, Pringles are called crisps rather than chips, the result of a long-ago fracas between competitors and regulators over what could be called a potato chip.
Edit by AMW
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The Homa Files 
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