Nabisco Biscuit Co. will introduce reduced-fat versions of Oreo and Ritz as part of a new six-item line that extends the company's impressive dominance of so-called wellness cookies and crackers.
Health food store snacks, considered by most consumers the taste equivalent of flavored cardboard, have long been available. But first with SnackWell's and Fat Free Newton, and now with versions of its best-selling cookies and crackers, Nabisco is proving health and good taste don't have to be mutually exclusive.
The marketer has also found the key to growth in a staid market that's under attack from private-label brands.
"A reduced-fat Oreo, that's exciting," said Steven Galbraith, an analyst with Sanford C. Bernstein & Co., New York. "The brand is pure Americana. Nabisco has managed to create enthusiasm and freshness for some old-timers in a really mature market."
Reduced-fat Oreo and Ritz products will be introduced in the Northeast later this month and rolled out nationally once the company is sure it can meet demand. Reduced Fat Chips Ahoy! will make its debut in all areas except the Northeast, and new versions of Triscuit, Wheat Thins and Better Cheddars will launch nationally.
"They're on a new-product run," said Eric Larson, an analyst with Morgan Stanley & Co. "In 1993, they added $835 million in sales from new products alone. That's quite impressive for this category."
Already, competitors are lining up to duel.
No. 2 ranked Keebler Co. will introduce reduced- and low-fat versions of five of its crackers, including Town House, Toastettes and Honey Grahams, in the coming weeks. The company has just added a fifth flavor to its lower-fat Elfin Delights cookie line.
Sunshine Biscuits, fourth nationwide in cookies and third in crackers, is introducing reduced-fat versions of Hydrox, Cheez-It and Vienna Fingers.
While neither is expected to put ad support behind new products, Nabisco on May 16 starts an estimated $15 million marketing campaign. The effort includes four 15-second TV spots by FCB/Leber Katz Partners, New York. In-store displays, couponing and sampling will also support.
The ads are still in production, but Terry Preskar, marketing team leader for the reduced-fat project, said they will use stop-action photography and music for a lively, fun effect.
The spots are part of Nabisco's greater emphasis on ad spending overall. Double-digit drops in 1991 and '92 saw ad spending sink to $54.2 million. But a 50% increase last year and what the company projected as a 35% increase this year would bring ad dollars to $110 million.
Nabisco has 46% of the $6.2 billion cookie and cracker category and 80% of the wellness segment, said President Ray Verdon. He stressed the importance of taste to the success of the company's lower-fat products.
The new entries will be priced in line with their traditional counterparts. Packaging is similar to that of the original products, except for a green flag and a "Reduced fat" line above each brand name.