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It's not that Americans have lost their taste for no-fat, low-fat, reduced-fat foods.

After all, retail sales of reduced-fat foods in the U.S. totaled $23.8 billion in 1996, and will grow at a compounded annual rate of 5.8% through 2001, reports Find/SVP.

What is emerging is a growing sense that consumers are beginning to balk at reduced-fat foods because of texture or the lack of flavor. Consumers may as well be saying: if the products don't taste like the real thing but still deliver high calories, then hand over the rich food.

As an example, sales of the richest ice creams-premium and super-premium-are up 28% in the first six months of 1997, while sales of low-fat ice creams have dropped 5% from 1996. Sales of frozen yogurt are even down 23%, according to International Ice Cream Association.

As such once super-hot lines like Nabisco Brands' SnackWell's and ConAgra's Healthy Choice experience growing pains, olestra-based snacks under test are ready to invigorate the no-fat, low-fat genre.


SnackWell's, introduced in 1992, quickly extended beyond cookies, to crackers, yogurt and candies. Stores couldn't get enough product. That was then.

Product sales monitored in 1996 by Information Resources Inc. show several SnackWell's key product lines turning stale.

Crackers slipped 20.4% in 1996 in three-outlet dollar sales from the prior year, and 29.9% for first-half 1997, according to IRI. Cookies, key to SnackWell's fortunes, dropped a dramatic 32.2% in sales in 1996 from the previous year. The entire cookie line was down 19.1% for a 52-week period pulled this July.

Taste is thought to be part of the reason. Consider Nabisco's most recent introduction of SnackWell's Peanut Butter Chip cookies. Ads were careful not to tout a low-fat selling point because they weren't all that low in fat. Despite depressed sales in several key areas, SnackWell's overall sales are moving up-largely a function of the new-product mill where new entries are fed to the market as flankers and extensions. This is typical of any food company.

SnackWell's is treading well in yogurts, for example. The new line, in only its first year on the market, hit a handsome $49 million in retail sales in '96 for a 3% share in that $1.7 billion category.

Co-branding also has broadened SnackWell's exposure into non-Nabisco areas. Pillsbury Co. licensed SnackWell's for its Pillsbury SnackWell's brownie mixes, a product line that generated $7 million in sales in '96, its first year on the market.

Like SnackWell's, Healthy Choice relies on new-product growth to sustain sales volume. There currently are 300 SKUs in the line begun by ConAgra in 1989.

New product lines like microwave popcorn ($27.7 million in '96), still give weight to sales even with all those SKU exposures.


This week Healthy Choice unveiled a national campaign for a line of premium fresh-frozen seafood steaks (halibut, salmon, shrimp and tuna), promising freezer-to-plate mealtime preparation of seven minutes.

But megabrand sales have remained flat the last two years at $1.4 billion-$1.5 billion, and most big category lines are down.

One category of no-fat foods that has seemingly eliminated the no-fat taste problem are the new olestra salty-snacks in test.

PepsiCo's Frito-Lay unit is promoting six varieties of Wow chips, including Tostitos. Nabisco is trying Fat Free Wheat Thins and Fat Free Ritz crackers positioned as "fat free with all the taste."

Procter & Gamble Co., marketer of olestra under the Olean brand name, is testing three varieties of fat-free Pringles.

P&G predicts products with olestra soon will represent 20% of the salty snacks market. There are public health concerns about the side affects some people experience after ingesting Olean, including abdominal pain and diarrhea.

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