RETAILERS: REDUCED-FAT LINES ADD GIRTH BUT AT FLATTER PACE

MARYELLEN LO BOSCO

Reduced-fat products remain a strong category for supermarkets, despite reports that interest is dwindling, according to retailers SN polled.

"I haven't seen any drop-off," commented Dave Herriman, senior vice president of grocery at Giant Food, Landover, Md. "We're adding new items." Herriman said that Giant is also adding private-label low-fat snacks.

Herriman told SN that there's been a decline in Nabisco SnackWell's sales, although he attributed that to greater competition in the cookie and cracker category.

Sales of low- and no-fat products are flat, according to a joint report by NPD Group, Rosemont, Ill., a market research company that tracks U.S. eating preferences, and Chicago-based Information Resources Inc.

Sales figures for low- and no-fat products in 1996 were $16.5 billion, compared with $16.3 billion in 1995, the report states.

"If you look at the last four or five years, the market exploded. Last year may be atypical," said Dave Jenkins, vice president of NPD.

Jenkins indicated that one of the reasons sales have flattened may be that consumers don't like the taste of fat-free products and, therefore, seldom choose low-fat alternatives.

Thus, he noted that technological improvements will be a big factor in the growth of the market, as companies come up with better-tasting items.

But retailers SN polled said they haven't seen a noticeable change in the consumption of low- and no-fat products, except in the cookie and cracker categories. "We are seeing that SnackWell's are down," said Steve Dirnberger, assistant grocery manager for Cub Foods in Stillwater, Minn., an affiliate of Supervalu, Minneapolis.

"It's not that people are necessarily purchasing fewer fat-free items; they are simply choosing from more items that are available."

Joleen Jarvis, category manager for Raley's Supermarkets, West Sacramento, Calif., said sales of SnackWell's grew substantially 18 months ago, but have since tapered off. Yet in spite of the downtrend, Jarvis said SnackWell's are holding their own. As for other categories, Jarvis hasn't noticed a drop-off. "Manufacturers are still coming out with new, better-tasting items," she said.

Bill Drumm, director of grocery, frozen food and dairy at G&R Felpausch, Hastings, Mich., noted that Nabisco is funding more promotions to jump-start its reduced-fat cookies.

Other manufacturers are also moving full-speed ahead with no-fat product promotions, for instance, Frito-Lay, plans to test new versions of its fat-free chips that contain olestra, a synthetic fat, under a new brand name -- Wow! Frito has been testing the chips under the Max brand for about a year in selected markets. Olestra is marketed under the brand name Olean.

Olestra continues to come under fire from consumer-, professional- and health-advocacy groups because it can cause gastrointestinal problems in some users and research indicates it depletes the body of some vitamins.

As reported in SN, many retailers in test markets report the chips have had brisk sales, saying consumers like the taste.