A former janitor at Frito-Lay has filed a lawsuit against the company, saying that he was the mastermind behind the creation of the iconic Flamin’ Hot Cheetos. The ex-employee, Richard Montañez, claims that his career suffered a significant setback after the company discredited his role in the snack’s inception.
What Happened: Montañez, who rose to the position of VP of sales at Frito-Lay, has taken legal action against the company and its parent, PepsiCo Inc. PEP, for allegedly distorting the history of Flamin’ Hot Cheetos, reported The Washington Post.
The lawsuit, filed in the San Bernardino Superior Court, accuses the companies of providing false information to the Los Angeles Times, which published an article undermining Montañez’s claim to the snack’s creation.
Montañez contends that this article led to a decline in his career as a public speaker and consultant, roles he took up after retiring from his 43-year tenure at Frito-Lay and PepsiCo in 2019. He alleges that the companies’ “open racism and blatant lies” have severely impacted his professional opportunities.
"I created Flamin' Hot Cheetos not only as a product but as a movement and as a loyal executive for PepsiCo," Montañez said.
PepsiCo and Frito-Lay did not immediately respond to Benzinga's request for comment.
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Why It Matters: The Flamin’ Hot Cheetos controversy has been a topic of debate for several years. Montañez, who claims to have invented the snack in the 1980s, has been celebrated for his rags-to-riches story, which was even adapted into a biopic.
However, in 2018, a former Frito-Lay employee disputed Montañez’s account, sparking an internal investigation by the company. This investigation, as reported by the Los Angeles Times in 2021, found no evidence of Montañez’s involvement in the product’s development.
Despite the controversy, Flamin’ Hot Cheetos have remained a billion-dollar brand for Frito-Lay and PepsiCo, inspiring a range of chile-flavored snacks and even influencing pop culture.
The lawsuit comes at a time when PepsiCo is facing multiple challenges. Recently, the company reported weaker-than-expected revenue for the second quarter of FY24, with sales growth of just 0.8% year-on-year, missing analyst estimates. Despite this, the company managed to beat earnings expectations, with an adjusted EPS of $2.28.
Additionally, PepsiCo has been making strides in sustainability. The company recently partnered with Yara International ASA to reduce crop emissions across Europe, aiming to decarbonize its food value chain.
Moreover, the company has faced setbacks in its North American market, particularly with its Quaker Foods North America division, which experienced product recalls.
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Photo courtesy: Frito-Lay
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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