That healthy underlying growth led to a 10% gain in operating profit. In fact, the fourth quarter of 2000 marked Frito-Lay's eighth consecutive quarter of double-digit profit growth.

Strong performance in core brands - like Lay's, Ruffles, Tostitos and Cheetos - contributed to the growth. So did innovation, an area in which Frito-Lay excels. A few examples: Fritos and Tostitos brand snack kits that combine a container of chips and a container of dip; Ruffles Flavor Rush potato chips, in flavors more intense than traditional Ruffles; new flavors of Doritos tortilla chips and Cheetos Xs and Os. Frito-Lay's innovation efforts generated some $1 billion in retail sales in 2000. More important, they reflect the company's extraordinary ability to bring excitement to the marketplace quickly and drive growth year after year.

Frito-Lay also grew by exploiting underdeveloped distribution channels, with particularly strong gains in mass merchandisers and convenience stores as well as in the vending and foodservice channel.

And a relentless focus on improving productivity and using its vast system to the greatest advantage helped Frito-Lay raise operating margins to an all-time high.