Growing trend: New Quaker snacks aim to capitalize on wholesome image

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PepsiCo will roll a slew of new products into the snack aisle this January from its Quaker Foods and Beverages unit in an effort to cash in on consumer desire for healthier choices.

Quaker sibling Frito-Lay North America recently announced a variety of initiatives catering to consumers' increasing health concerns (AA, Sept. 2), including shifting to healthier cooking oils for snacks including Doritos, Tostitos and Cheetos. But the Quaker brand is already a formidable player in the growing healthy-snack arena.

"Clearly, there is a leverageable opportunity," said Prudential Securities analyst Jeff Kanter, as "very few brands mean wholesome and better-for-you snacks more than Quaker." Despite its push toward baked products and better fats, Mr. Kanter said, Frito-Lay "can't touch that arena by themselves." Enter Quaker.

Last January's launch of chocolate-covered Quaker Chewy Dipps and Fruit & Oatmeal Bites were said to be just the beginning of an innovation pipeline. Now, top-level Quaker sales executives are telling retailers about plans for at least 20 products set to make their debut in January backed by aggressive marketing, according to retail sales executives.

Omnicom Group's Element 79, Chicago, handles. The PepsiCo unit spent $26 million in measured media on Quaker snack brands during the first six months of this year, according to Taylor Nelson Sofres' CMR.

taking on pop-tarts

One offering, a six-item line of toaster pastries called Fruit & Oatmeal Toastables, is intended to go up against Kellogg Co.'s leading Pop-Tarts brand, which owns the $500 million category with a 72% share. It's a tough niche to tap: In late 2001, Kraft Foods-unable to make a go of it against such steep competition-abandoned its $30 million Nabisco Kool Stuf brand. Even Kellogg has had a hard time gaining growth: Its Pop-Tarts Snak Stix fell 33% recently to $11 million, and the Pastry Swirls line it relaunched last year is down 18.4% to $25 million for the 52 weeks ended Sept. 8, according to Information Resources Inc.

Quaker is confident its growing Fruit & Oatmeal brand can support extension into a new category. The line grew 6% to $65 million in snack bars, and Bites have grown to $20 million. Quaker is also extending the brand with a line of Iced Fruit & Oatmeal Bites.

Its other new products include Quaker Crisp `Ums, baked snacks featuring "a light crispy crunch and cinnamon-sugar taste"; Corn Rings; a new Ranch variety of Quaker Quakes mini-rice cakes; and a variety of new Chewy granola bars (including a new Chewy Trail Mix bar) to capitalize on the double-digit growth of that line.

A Quaker spokesman declined to provide details on the products or the marketing plans to support them.

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