Wednesday, July 05, 2000

Olean product sales thinning

By Randy Tucker
The Cincinnati Enquirer

        Cincinnati-based consumer-goods maker Procter & Gamble likes to point out that the company has sold more than 2 billion servings of its Fat Free Pringles, made with the company's controversial fat-substitute Olean.

        But consumption of the uniformly shaped chips that come stacked in a can is in decline, based on figures made available by Chicago-based market-data tracker Information Resources Inc.

        The figures show that sales of Fat Free Pringles fell more than 70 percent from a high of $40.3 million for the 13-week period that ended Sept. 27, 1998, to just over $11 million for the 13-week period that ended March 26.

        Sales of all chips made with Olean — which is made at P&G's Ivorydale plant in Greater Cincinnati and used in Fat Free Pringles and Wow! chips made by Frito-Lay, as well as chips from smaller snack companies — fell about 60 percent during the same periods, according to Information Resources.

        Overall, sales of salty snacks increased 4.4 percent, Information Resources said.

        Peter Jacobs, president of Jacobs Idea Group — an Illinois-based new-product consulting firm — said that today taste is the most important factor influencing shoppers' food purchases.

        And although P&G claims olestra snacks have “great taste and texture without adding any fat or calories,” many consumers aren't buying it — literally.

        “The reason is simple,” Mr. Jacobs said. “Even if Fat Free Pringles taste just as good as regular chips, the fat-free label will turn many consumers off from even trying them.”

        That's not to mention a warning label that tells consumers to beware of the potential side effects of Olean.

        Although Olean has been approved by the U.S. Food and Drug Administration (FDA), the approval came with one condition: products that use Olean as an ingredient are required to carry a label warning of possible gastrointestinal problems.

        P&G has petitioned the FDA to allow it and other snack-makers using Olean to remove the label from their products.

        But that might not be the biggest problem facing Fat Free Pringles and other snacks made with Olean.

        Mr. Jacobs said the decline in consumer interest in no-fat or low-fat food items is reflected in the slowdown over the past few years of new-product introductions with a no- or low-fat claim.

        He pointed to a recent survey by data-tracker Marketing Information Services that showed the percentage of new products making such claims has declined from 49.3 percent of all snack introductions in 1996 to 30.6 percent last year.

        That could spell disaster for Fat Free Pringles and the dozens of employees working on the brand in Cincinnati.

        “Pringles are still popular, so I wouldn't expect them (P&G) to sell the brand,” Mr. Jacobs said. “But I wouldn't be surprised to see them discontinue the fat-free version.”

        In addition to fighting waning consumer demand for Fat Free Pringles, P&G continues to battle publicized concerns about Olean-based products' safety.

        Most recently, Health Canada — Canada's health protection branch — acknowledged that it has banned the use of Olean for more than a year in Canadian snacks.

        Health Canada said it banned the substance because P&G failed to prove that Olean doesn't interfere with the body's absorption of vitamins and other nutrients.


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