PepsiCo purposely packs fewer chips into the flavored chip bags, Hugh Johnston, the company"s CFO, said the connected Press. "There can be an ounce or two less ," Johnston said.

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Actually, it"s fifty percent an ounce less. Continuous Lay"s are sold in 10-ounce bags; flavored Lay"s are offered in 9.5-ounce bags; and both are offered for the very same $4.29 price.


Americans purchase some $1.6 billion worth of Lay"s potato chips every year. Much of that is marketed in bulk—or simply in bags bigger 보다 the conventional ones mentioned above. Yet let"s assume for a 2nd that those 10-ounce bags space the only ones Lay"s sells. That would mean the firm sells an ext than 372 million bags of Lay"s in the U.S. Each year—or 3.72 billion ounces of chips, in ~ 43 cents per ounce. That would likewise mean the that fifty percent ounce distinction is precious 21.5 cent per bag, and more than $80 million in full per year.


That number is most likely a good deal lower, however it"s not entirely unreasonable. If Lay"s is charging a premium for the smaller flavored chip bags, it"s most likely doing the very same for the larger ones, too. That tiny half-ounce tweak can only mean a potato chip or 2 to you, yet it"s probably worth tens of millions to PepsiCo annually.


PepsiCo confirmed that flavored and also unflavored Lay"s chips are offered for the very same price, but not in the same quantity. "This allows us to save the same price point throughout the brand," Jeff Dahncke stated in one e-mail. He likewise suggested that the chip difference has nothing to do with extra profit. "The factor there is a slightly higher price per oz for flavored chips is the included seasonings," that said.


Some that the mark-up (or chip down) is simply meant to make up for the included input expenses that enter sprinkling top top cheese, barbecue, cake cream and onion, and other flavorings. Yet some of it is additionally there (or not there) to pad the potato chip-maker"s profits. PepsiCo has a soft spot for its specialty potato chips, since its specialty potato chips are more lucrative than its consistent ones, according to Johnston.


John Staszak, a PepsiCo analyst and also former Frito-Lay employee, agrees. "He is right," Staszak stated of Johnston"s remarks.

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Perhaps that"s why Lay"s is gaining ready to launch a horde of brand-new specialty potato chip flavors, i m sorry will include flavors like Cappuccino, Mango Salsa, Wasabi Ginger and Bacon Mac & Cheese (Businessweek tried them, so you don"t have actually to). The start is part of PepsiCo"s annual "Do united state a Flavor" contest, in which it lets customers get involved in the flavor creation process.