J&J READIES U.S. INTRO OF BENECOL NUTRACEUTICAL: SENSATION IN EUROPE; SALES COULD REACH $2.5 BILLION

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Johnson & Johnson's McNeil Consumer Products Co. is getting close to breaking a nutraceutical barrier with its much-anticipated U.S. introduction of what could become a blockbuster new product, cholesterol-reducer Benecol.

Although J&J has been secretive about what product form Benecol will take, Advertising Age has learned it is now making initial approaches to grocery-store buyers with both a salad dressing and a tub margarine bearing the Benecol name.

According to two retail executives, the company hasn't yet distributed sales materials, but has told them that it will rely heavily on professional communications to spread the claim that Benecol reduces cholesterol an average 14%.

The company declined comment on its product and marketing plans.

SPENDING COULD HIT $350 MIL

Saatchi & Saatchi, New York, in late summer was given the assignment for the January launch. Spending levels haven't been disclosed, but it's expected that ad outlays for such a landmark product could reach $35 million.

J&J won't say whether it will launch Benecol as a dietary supplement -- a method that would give it considerable leeway in making health claims -- or as a food. But the margarine and salad dressing forms would suggest the latter.

It's believed McNeil has performed clinical trials, which could indicate the company may have applied for U.S. Food & Drug Administration approval.

J&J acquired North American marketing rights for Benecol from Finnish company Raisio Group in July 1997 and, subsequently, global rights (AA, Aug. 17). The active ingredient is stanol ester, a wood-pulp derivative. J&J recently brought online a Charlotte, S.C., plant to produce the ingredient.

REPUTATION OF TASTING TERRIBLE

In Finland, the product was a runaway success. Even though Benecol was priced more than 10 times higher than regular margarine -- and was reputed to taste terrible -- there were persistent product shortages.

Estimates vary for its potential in the U.S., but there's little doubt it could be huge. There are 90 million to 100 million Americans with elevated cholesterol, and one published estimated attributed to First Boston suggested sales could reach $2.5 billion in the first few years.

"We could be talking hundreds of millions of dollars" in the first year, said an analyst who asked not to be identified.

Such estimates haven't escaped notice of most major food companies. Unilever is racing out its own cholesterol-reducing margarine to compete with Benecol, and Kellogg Co. is close to introducing the first product from its new Functional Foods division. Monsanto Co. also is known to be tinkering with several nutraceutical lines.

Contributing: Laura Petrecca, Michael Wilke.

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