After investing three decades and more than a half-billion dollars, Procter & Gamble Co. is about to go national with snacks containing its fat substitute olestra.
P&G and snack food giant Frito-Lay are expected today to announce they will begin shipping fat-free snacks fried in olestra within weeks to a few select markets - including Cincinnati about March 1 - ramping up to national distribution by this summer.
Procter simultaneously will announce the completion of its $200 million olestra-making plant in Cincinnati and plans for a major marketing blitz to educate American consumers about Olean (the brand name for olestra). The campaign includes the company's largest in-store sampling program ever, the launch of Olean commercials Feb. 21, the next-to-last night of the Winter Olympics, and print ads in major magazines beginning Feb. 23.
''This is one of a handful of events . . . that they will look back to and help define what this company is at its best,'' P&G Chairman and Chief Executive Officer John Pepper said in an interview with the Enquirer. ''It's been torturous and at moments a source of some anxiety, but our people have stayed with it.''
Fun facts
A 1-ounce serving of potato chips fried with olestra contains 75 calories and 0 grams of fat, compared with 150 calories and 10 grams of fat in regular chips.
Americans eat more than 5.6 billion pounds of salted snacks a year, consuming some 774,000 tons of fat and 6 trillion calories.
P&G conducted more than 150 clinical studies on more than 20,000 people over a quarter century to win approval to market olestra in snacks.
More than 28 million servings of snacks containing olestra were sold in test markets. If those buyers had eaten regular chips, they would have consumed more than 2 billion calories and 285 tons of fat.
The new olestra plant includes 7,000 pieces of steel, requiring 200 rail cars to deliver. Some 30 miles of pipe with 15,000 attached pieces wind through the facility.
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At stake for P&G is a potential billion-dollar-a-year product and its global reputation if Americans don't bite on taking a chance with olestra. If Olean potato chips and corn chips gain acceptance, P&G could have its biggest chance to create a new global market since it introduced Pampers 36 years ago.
P&G's hometown of Cincinnati - along with Toledo and Dayton, Ohio - will begin receiving P&G's Fat-free Pringles potato chips made with olestra in early March.
Frito-Lay is taking a similar, build-up approach. The Wow! fat-free version of Frito-Lay's Ruffles, Lay's and Doritos chips could be available in selected West Coast markets such as San Francisco, Portland and Seattle as soon as this week.
As an equity partner in P&G's olestra plant, Frito-Lay is the only snack food company guaranteed enough olestra in 1998 to make enough snacks for national distribution; others will have to wait until mid-1999.
P&G, one of the world's largest advertisers, is unleashing one of its most aggressive campaigns ever to herald Olean. The commercials focus on how olestra is a zero-calorie - no-fat cooking oil made from natural ingredients, such as soybean oil and cottonseed oil. A proud soybean farmer serves as a spokesman.
P&G intends to use massive in-store sampling, direct mail sampling and other event give-aways to make sure everyone so inclined has had a chance to taste Olean snacks.
Olean marketing manager Billy Cyr said it became apparent during test markets that not only were people uncertain what Olean was (a cooking oil), they were concerned about negative publicity over its possible digestive side effects.
To gain FDA clearance, P&G was required to put a warning label on snacks made with olestra oil saying: ''Olestra may cause abdominal cramping and loose stools. Olestra inhibits the absorption of some vitamins and other nutrients. Vitamins A, D, E and K have been added.''
The FDA says that, so far, reports of digestive problems in test markets are at acceptable levels. Even anecdotal reports are hard to verify, the FDA says, given that so many foods and circumstances can cause gastrointestinal distress. P&G, for its part, touts a new company-sponsored study in which volunteers said olestra chips caused no more stomach pains, gas or other digestive problems than regular chips made with fat.
Moreover, Procter has gained the support of organizations such as the American Diabetes Association, which lauds olestra as a strong tool for fighting obesity. Among the favorite statistics of P&G nutritionists: The average person eats about 22 pounds a year of salted snacks, 7 pounds of which is fat.
''Olestra is not a magic bullet. This is not a panacea,'' Mr. Pepper said. ''I think this has a role to play along with common sense, diet and exercise.''
The most vocal critic of olestra, Michael Jacobson of the Center for Science in the Public Interest (CSPI), remains undaunted. By CSPI's count, more than 2,000 people in olestra test markets have reported it caused gastrointestinal problems in themselves or relatives. At least 18 people went to a hospital complaining of severe symptoms.
''As they are on the brink of going national, the problem will be that much greater than when olestra's products were marketed in only a few cities,'' Dr.Jacobson said, vowing to continue his crusade to have olestra banned by the FDA.
The CSPI chief hasn't backed off from his claim that ''it's only a matter of time before (olestra) chips cause deaths'' from dehydration or severe cramps when swimming.
Procter executives contend the best way to counter CSPI is to let people taste for themselves.
''I think in time if people eat the product and don't have the problems, (the concern) goes away,'' said Bob Gill, P&G vice president of snack food brands. The final judge is the marketplace, where P&G and Frito-Lay appear to be winning.
Olestra has scored high marks for taste, helping P&G sell fat-free Pringles at a 40 percent premium, whereas Frito-Lay has experimented with prices as much as twice the cost of its regular chips.
More than 28 million servings of Olean snacks have been sold in test markets to date. Grocery stores in several test markets have relayed tales of customers traveling long distances to buy the snacks or paying high premiums to secure some off an informal olestra black market.
''For a while there, we felt we were almost a catalog place, we were getting so many requests,'' said Dixie Burmeister, who works for the City Market supermarket chain in Grand Junction, Colo., a test market for Frito-Lay's olestra chips.
City Market, a 43-store division of Cincinnati-based Kroger, was besieged by callers from across the country.
''We had somebody drive from Fort Collins, Colo. . . . which has to be about 325 miles away,'' Ms. Burmeister said. ''They drove over here and filled up their car with the chips and drove back. Must've been a hundred bags. They had orders from all of their friends.'' Mr. Pepper recalled his brother-in-law making a similar trek to Columbus to stock up on fat-free Pringles.
''I'm glad he went up and paid full price,'' Mr. Pepper joked. P&G's history is one of innovation - from the first mass-marketed disposable diaper (Pampers) to the first mass-marketed vegetable shortening (Crisco) to the first toothpaste with fluoride (Crest) to the first two-in-one shampoo and conditioner (Pert Plus). Yet in terms of investment in time and money and potential payoff, olestra is unique.
''A way to look at it is (Frito-Lay parent) Pepsi's U.S. snack business . . . was about $6.97 billion last year and international was $3.41 billion,'' said Doug Christopher, an analyst with Crowell, Weedon & Co. ''If olestra adds at least three percentage points (to sales), I'd imagine Pepsi is expecting over $200 million in sales from olestra products alone this year. It could be over $300 million.''
The potential is off the charts - even for a $35 billion powerhouse like P&G - if the FDA eventually approves the use of olestra to make fat-free french fries, baked goods and possibly even to be marketed as a fat-free cooking oil or shortening similar to Crisco.
Given P&G's lengthy journey to regulatory approval to use olestra in salty snacks, other uses of olestra are likely several years away, if at all.
Linda Sandefur, P&G vice president and general manager overseeing Olean, said the company has several options but hasn't decided what fat-free application it will seek next with the FDA. French fries are considered likely.
Even further away, she said, is seeking approval in other countries to sell foods made with olestra.
In addition to Frito and P&G, Nabisco in April began test-marketing its Ritz and Wheat Thins crackers made with olestra in a handful of grocery stores in Marion, Ind., and Grand Junction, Colo. About a dozen other regional chippers have signed agreements with Procter to buy Olean once the national supply becomes available in 1999.
''There will probably be two . . . waves of olestra products - this summer, and in mid-1999, another significant wave would be expected,'' Ms. Sandefur said.
''It's a matter of logistics. . . . We're moving as fast as we can.''
Mission: Get people to try one
Plant built on time
Olestra chronology
