Cap’n Crunch and Lunchables are showing up in video games now

(CNN) — Gaming is big business. And snack makers want in.

Beverage brands have long been advertising directly to gamers. Red Bull has been active in the esports world for years, Monster Energy made waves when it appeared prominently in the game Death Stranding and PepsiCo has even developed a product, Mountain Dew Game Fuel, specifically for gamers. Food brands, however, haven’t courted that demographic as aggressively.

Snack makers are “definitely underrepresented,” when it comes to advertising to gamers, said Caleb Bryant, associate director of food and drink at Mintel.

But that’s starting to change — snack brands are vying for a piece of the action.

That means virtual billboards for Cap’n Crunch are popping up in several games, Lunchable logos are showing up in Roblox, and Heinz-sponsored rest areas can be found in Call of Duty. It’s still early days, but the food makers think this strategy has big upside.

A marketing transformation

Kraft Heinz, which owns Heinz condiments, Lunchables, Oscar Mayer and other brands, has started to think more deliberately about how to advertise to gamers, said Sanjiv Gajiwala, the company’s US Chief Growth Officer.

Last year marked “the initiation of our marketing transformation,” he said. That included “getting involved in gaming in more intentional ways.”

In December, Heinz launched an ad campaign within the first-person shooter game Call of Duty. Here’s the gist: Taking a snack break can open players up to attack by opponents. So Heinz paired up with the game’s designers to set up safe spots in the virtual world, where players’ avatars can hide out while they take a quick bite.

Around the same time, Lunchables launched a branded game within the kids gaming platform Roblox.

These may seem like niche ads, but Kraft Heinz doesn’t see it that way. “It’s really important for us to recognize that gaming is more pervasive and is an important part of culture today,” said Gajiwala.

As evidence of the relevance of gaming, Gajiwala pointed to Microsoft’s acquisition of Activision Blizzard, creator of Call of Duty, Candy Crush, World of Warcraft and more. Last month, the tech company announced it would pay nearly $70 billion for the gaming firm, even though Activision and its controversial CEO had been recently accused of fostering a toxic work environment.

The Microsoft acquisition is just one piece of the puzzle. Globally, consumer spending on games, including subscriptions and in-app purchases, hit $180.3 billion in 2021, according to Newzoo, an analytics company for the gaming market. Newzoo predicts that spending will grow to $218.8 billion in 2024.

And it’s not just current gamers spending more — more people are becoming gamers. According to Newzoo, the number of people who said they played games on computers, consoles or mobile devices in the last six months grew 5.3% globally in 2021 compared to 2020.

But for some big snack makers, including PepsiCo, gaming is just the tip of the iceberg.

Welcome to the metaverse

As gaming evolves, so does the food giants’ approach to advertising to gamers, said Adam Harter, SVP of media, sports and entertainment at PepsiCo.

“There was a point in time where we would look at a brand like Mountain Dew and say, ‘well, Mountain Dew is the best fit for a gaming platform. So Mountain Dew is going to be the brand that we go to market and advertise around gaming,'” he said. “That’s not the way we do it anymore. Now, for virtually all of our brands, this is a must-have component of our media communication strategy.”

PepsiCo started marketing more of its products in earnest to gamers around three years ago, said Harter. In 2021, it worked with Anzu, an in-game advertising company, to place ads for Cap’n Crunch in several games. It has also promoted Doritos, Ruffles potato chips and, of course, Mountain Dew, in those virtual spaces.

For Harter, it’s not enough to market more products to gamers. PepsiCo also has to reach different types of gamers.

“Gaming has exploded to such a massive audience,” he said. “It’s not just about those competitive gamers … I see this now as an opportunity to become more surgical in how we reach consumers.”

He also sees gaming as an entry-point to the metaverse, a concept embraced by Silicon Valley that imagines a world where people’s digital avatars engage with each other in a virtual world.

“I see gaming as really the springboard into this new phenomenon we call the metaverse,” he said. “As people live their lives in the metaverse on a more daily basis over the next few years … it’s critical for brands like ours to make sure that we are where those consumers are living their lives.”