New tortilla chips made in Vancouver will compete with Oregon product

Maker of Juanita's is confident his product can withstand Frito-lay challenge

By Gordon Oliver, Columbian business editor

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The tortilla chips recently added to local grocery shelves would seem well-suited for those who prefer to buy local.

The product is "La Cocina De Josefina Mexican Restaurant Style Tortilla Chips," and the sign in some stores says they're made in Vancouver.

A closer look at the package reveals a business address of 4808 N.W. Fruit Valley Road. That's the address of the manufacturing plant for Frito-Lay, a snack food industry giant whose products dominate the chips section of most grocery stores.

It turns out that Frito-Lay has launched the Josefina tortilla chips in Oregon, Washington and Idaho to test market acceptance of the thicker tortilla chips commonly offered in Mexican restaurants.

Across the Columbia in Hood River, Ore., Juanita's Fine Foods president Luis Dominguez can't help but feel that Frito-Lay is doing its test in the Northwest because of the remarkable popularity of his company's restaurant-style tortilla chips.

He expects his loyal customers to stay with him, but he's worried that some will be confused by the similar brands and packaging, as well as the pitch to buy local.

"They copied our label to confuse the consumer and to knock us down," Dominguez said. "They're the giants. Don't get me wrong. They scare me."

Aside from the Vancouver address, Frito-Lay certainly is staying in the shadows in this product rollout. Josefina's is not listed as a Frito-Lay brand on the company's website. The corporate name doesn't pop up on a call to Josefina's toll-free number, listed on the chip package. The recorded message is delivered first in Spanish and then in English.

Juanita's has a significant price advantage: its 15 ounce package generally sells for $2.39, compared to $3.49 for a same-sized package of Josefina chips. But at the Salmon Creek Fred Meyer store this week, Jofefina's had its own display shelf, making its product stand out from the competition. A Frito-Lay spokeswoman said those displays will remain in some stores for six months. And the local product pitch undoubtedly will appeal to some who don't know that Juanita's is produced by a 30-year-old family company that not too many years ago realized its chips could appeal to a large group of consumers.

Dominguez said he'd heard a rumor about four months ago that Frito-Lay was coming out with a "knock-off" to compete against his company's chips, a strong competitor to Frito-Lay's tortilla chips and Doritos in the Northwest. "Our consumers are taking business away from Frito-Lay," he said.

Dominguez insists that he doesn't spend a lot of time figuring out ways to beat the competition. "We don't try to go after anybody. That's not our intention," he said. "We try to give consumers a good product at a (good) cost."

A spokeswoman on behalf of Frito-Lay's North American headquarters in Plano, Texas, who asked not to be identified, said the company is always looking for new products to offer that satisfy local markets. "We've really looked at what our consumers are demanding and enjoying, and our portfolio is based on community needs," the spokeswoman said.

Frito-Lay is not named, she said, because,"this is a specialty brand in the Northwest. We wanted it to have that local feel." The labeling could change, the spokeswoman said, if the product is rolled out to a larger market.

Despite his concern, Dominguez says in the end he can weather the competition even from an industry giant. "The consumer will vote with their dollars," he said. "We're pretty confident."