According to the Wall Street Journal, the folks at Frito-Lay want to eliminate any ingredient that we wouldn't have in our kitchen cabinets!

To make potato chips, it takes beet juice, purple cabbage and carrots. At least that's what Frito-Lay has concluded as part of its big push to use natural ingredients in its chips. The veggies replace ingredients such as FD&C Red 40, an artificial coloring agent.

A group of hungry employees put Frito-Lay's new "all natural" chips to the test, to see if they can taste the difference from the original chips.

"If the ingredient isn't in a consumer's cupboard, can we get it off the label?" says Tim Fink, director of Frito-Lay's seasonings team.

Frito-Lay, the biggest U.S. seller of salty snacks, is embarking on an audacious plan. By the end of the year, it intends to make half its snacks sold in the U.S. with only natural ingredients. Many are already in grocery stores.

The PepsiCo Inc. unit is responding to conflicting currents in the marketplace: Many customers say they want to lose weight and eat better—but it's not clear that healthy snacks sell as well as junk food.

Original Ingredients

* Potatoes

* Sunflower Oil and/or Corn Oil

* Salt & Vinegar Seasoning: Lactose, Sodium Diacetate (a vinegar flavor common in the food industry), Maltodextrin, Salt, Malic Acid, Sodium Citrate (gives chips a tart, acid tanginess and flavor), Sunflower Oil

Still, Frito-Lay is saying so long to monosodium glutamate and roughly three dozen other artificial ingredients in more than 60 snack varieties. Lay's flavored potato chips, Tostitos tortilla chips, multigrain SunChips and Rold Gold pretzels are all getting a makeover.

Of course, the company is mindful of chip-munchers who may equate the term "healthy snacks" with "tastes like cardboard." While market researchers believe "all natural" is a consumer magnet, the company has adopted a stealth health strategy for another move: It's not advertising that it's reducing sodium by 25% in many of its snacks. U.S. Dietary Guidelines issued earlier this year call for Americans to cut back on salt, and federal and local governments are pressing food manufacturers to reduce sodium in their products.

Frito-Lay is holding off so far on converting its Doritos and Cheetos brands to all-natural ingredients. Those products, with bold flavors, are harder to retool and are marketed to teens and other consumers who might be turned off if told the chips were all natural. As well, going all natural risks highlighting the artificial ingredients that were in the chips before.

Making snacks with natural ingredients doesn't necessarily make them healthy, nutritionists and industry critics caution, even if they are potentially less bad. That includes potato chips, which contain a lot of fat and salt. The revamped Frito-Lay's chips' fat and sugar content hasn't changed much.

New All-Natural Ingredients

* Potatoes

* Vegetable Oil: Sunflower, Corn and/or Canola Oil)

* Salt & Vinegar Seasoning: Maltodextrin (a corn-based starch, is a flavor carrier that helps more evenly distribute dry seasoning), Natural Flavors, Salt, Malic Acid, Vinegar

"Foods that are less loaded with sugar, fat and salt, that's what's important. Everything else is marketing," says David Kessler a former Food and Drug Administration commissioner and snack-industry critic.

The FDA hasn't established a formal definition for the term "natural" and notes most "natural" foods are processed. But it also doesn't object to such marketing if food doesn't have added color, artificial flavors or synthetic substances.

All-natural products represent only about a fifth of the $15 billion in annual U.S. savory snack sales, a category including chips, nuts and crackers. But such sales grew an average of 14% over the past two years, compared with 4% for the category as a whole, according to industry data.

Kraft Foods Inc. touts its Triscuit crackers as being made from three "simple" ingredients—wheat, oil and salt—and tells consumers it's "a fan of real food" on its packaging. Utz Quality Foods Inc. markets a line of potato chips in which the word "NATURAL" dominates the packaging, dwarfing the brand name.

George Mensah, PepsiCo's vice president of global nutrition, says he wouldn't tell his children to eat all-natural chips for breakfast. "But it's a sensible snack treat that is better than most available treats," he adds.

Frito-Lay wants to boost sales of its chips. Frito-Lay North America's 2010 revenue was flat in the fourth quarter and up just 1% last year over 2009. The switchover to natural ingredients coincides with a push by PepsiCo into healthier products and to cut back on unhealthy ingredients in its biggest sellers like soda and potato chips. Chairman and CEO Indra K. Nooyi wants to build its healthy brands into a $30 billion business by 2020, or more than double sales of its healthier products today—a strategy that some investors have questioned.

Frito-Lay made a startling discovery a few years ago: Many Americans didn't believe there were actual potatoes in Frito-Lays chips, even though the company's chips have been made from potatoes (and vegetable oil and salt) for decades. In 2009 it launched a nationwide advertising campaign featuring local potato farmers who supply Frito-Lay.

In recent years, Frito-Lay has eliminated trans fats and reduced saturated fats in its snacks. It also introduced a smaller line of baked, rather than fried, potato chips, lowering the amount of fat.

A Salt Worth Its Chip

* Frito-Lay has been lowering the sodium in its flavored chips. To retain the existing salty taste, it cut salt crystals differently so they remain on the chip's surface, closer to the tongue, instead of falling into the chip's recesses. Using more natural ingredients also means less salt is required, it says. The company is designing a new salt for use in its plain classic Lay's potato chips that is shaped and sized in a way that reduces the amount of sodium consumers ingest when they eat the chips.

Much of the recipe re-engineering has been taking place at corporate headquarters in what it calls its "flavor kitchen," which opened in 2009 and resembles a high-end, residential kitchen. But in addition to counters and sinks, it has a walk-in cold room for storing vegetables and a miniature factory to test ideas.

On a recent afternoon, Stephen Kalil, an executive research chef at Frito-Lay, dipped a spoon into a freshly-made puree of cucumbers, mint leaves and limes.

"This could end up on a potato chip," he said, standing next to a wok range and tandoor oven.

Frito-Lay says it ran through more than 300 all-natural versions of its barbecue potato chips before landing on one that tasted like the original, though without monosodium glutamate, or MSG, a powerful flavor enhancer allegedly linked to headaches and obesity. To get there, it ramped up the other seasonings—including molasses, malted barley flour and paprika—and tested them on 120 to 1,500 consumers at a time.

Another ingredient on the outs is FD&C Red 40, a bright food coloring allegedly tied to hyperactivity in children that is being scrutinized by the FDA.

Some ingredients—like ascorbic acid, a color stabilizer—sound artificial but are not. Frito-Lay is eliminating those from some of its snacks, too. Ascorbic acid has been replaced with rosemary, another natural antioxidant.

Frito-Lay is slapping "all natural" stamps on its packaging as it rolls out the reformulated snacks—part of the company's largest-ever marketing campaign to drive home that many of its products are made from regular ingredients.

Some of the natural substitutes cost as much as 35% more than artificial flavors and colorings, according to Frito-Lay. The company declined to say whether the higher costs would affect its snack prices.

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