WEIGHING DIETS

DAVID VACZEK

Shoppers' concerns over nutrition and weight-loss have forced supermarkets to reassess traditional diet segments, appetite suppressants and meal replacements, categories often swept by cyclical fads.

Consumers' interest in eating correctly is at an all-time high, bombarded as they are with data on nutrition's effect on health and mortality.

They also have more healthy choices at supermarkets than ever before. Witness the surge in value-added fresh offerings and the "better for you" low-calorie, low-fat, low-sodium packaged foods. Manufacturers also are using the labeling more effectively when possible to tout healthy benefits such as no-fat, low-calorie contents of their products.

These trends may be partially responsible for the negative sales trends in traditional diet products at supermarkets, some buyers speculate.

"Slim Fast and Sweet Success [meal replacements] are not doing that well. I think consumers are going to the fat-free foods," said Vern Buford, director of grocery merchandise at Rice Food Markets, Houston.

Frito Lay's Baked Lays 99%-fat-free potato chip has become the No. 1 selling chip at the chain's upper-end Rice Epicurean Stores, he noted.

Healthy Choice frozen dinners are popular at Ukrop's Super Markets, Richmond, Va., where "Slim Fast sales have died down somewhat," reported Carol Obaugh, senior director of procurement.

Driven by sales increases at mass merchandisers, appetite suppressants such as Dexatrim and Actrim were up 7.6% to $98.6 million in the combined three trade channels for the 12 months ended June 30, according to ACNielsen, Schaumburg, Ill. This segment was off 2% at supermarkets, falling to just $19.9 million. ACNielsen figures confirm some retailers' reports that the meal-replacement segment (defined as diet aids-complete nutritional), aimed at weight-loss, renotched its belt again this year as sales slid 15% to $145.3 million at grocery chains.

Doing well are nutritional supplements such as Ensure and Boost brands. Publicity on the value of maintaining an active lifestyle, proper nutrition and avoidance of high-fat foods has fueled movement of these ready-to-drink supplements, which are intended as adjuncts to normal diets, said merchandisers. Nutritional supplement sales continued their double-digit growth, spurring some chains to add stockkeeping units and new lines. Ross Products division of Abbott Labs, Abbott Park, Ill., has added high-fiber and protein SKUs to its lead-selling Ensure Regular and Ensure Plus items. Sandoz Nutrition Corp.'s Resource, Mead Johnson Nutritional's Boost and store brands are contributing to sales.

"Ensure has done very well for us. We have increased our space because of the growth," said Sam Richardson, health and beauty care buyer at Harps Food Stores, Springdale, Ark.

The chain recently added Boost to the set, which is merchandised adjacent to pharmacy. Temporary 10% price reductions and in-store sampling have helped launch Boost. "The sampling does a good job of moving the product. People can taste it and realize it tastes pretty good," said Richardson.

At a major Florida chain, Ensure sales have been "very strong, with significant growth in the last two or three years," said a category buyer, who asked to remain anonymous. "Ross Products has gotten behind it, and they have broadened the market [aiming at healthy, active seniors], promoting it to folks other than those who are directed to it by their doctors for nutritional purposes," the buyer said.

The segment in food, drug and mass merchant channels grew 38.9% in the 12 months ended June 1996, with 32.8% growth in food stores, ACNielsen reported.

Nutritional drink annualized sales growth has run at about 20% starting in 1993, peaked at a 40% growth rate last year and this year is in the "upper 20% to 30% range," said Robert Dickson, vice president of marketing, general merchandise distribution, at Fleming Cos., Oklahoma City.

"The rate of growth for Ensure has slowed in the last year because of the competition" of Sustical, Boost and private label, said Dickson. "We don't see Resource as a viable line at this point. They are going through their fourth or fifth relaunch. They have had expiration problems at retail," Dickson said.

Resource is running "a poor second place" in sales at Rice Food Markets, where Ensure remains the only other line the chain has taken on, said Buford.

Buyers at grocery chains in several rural markets reported low interest in the nutritional products.

At Ukrop's consumer interest has been low, Obaugh said.

"Ensure is the only one that sells at all and even that is not a big seller," said Obaugh, who has picked up Boost, is "giving Resource another chance" and has dropped Sustical.

Nonexistent margins add to the products' unpalatability, said Obaugh.

The nutritional drinks cannot be helping meal-replacement sales, even though the two segments are aimed at different customers. The overweight, always in search of a quick fix, are undoubtedly trying them, said Connie Dickman, a registered dietitian and spokeswoman for the American Dietetic Association, Chicago.

"Consumers always want a new, more exciting way to lose weight. People may perceive these as 'medical' supplements and therefore as better products than the [traditional] 'diet' products," she explained.

Providing a basic minimum level of nutrients, some also supply a low-calorie intake, such as 200 calories per can for Ensure low fat, for example.

"But that is not the way you lose weight in the long term and not what the products are designed for. The bottom line is you have to change what you are eating and what you are burning," said Dickman.

As a rule, consumers are not using the nutrient drinks in place of the meal-replacement items, Slim Fast and Sweet Success, buyers, vendors, and wholesalers agree.

"The meal-replacement category is peaking and beginning to fall off the back of its life cycle. Slim Fast is showing some gain; Nestle's Sweet Success is on a strong downward trend. The category seems to be going back to the level it was before Nestle's entered the market in 1992," said Fleming's Dickson.

Besides changing consumer attitudes, the meal-replacement fall-off also can be attributed to publicity in recent best-selling books that focused on the negatives of dieting, said Doreen Ida, category director of adult nutrition at Nestle USA, Glendale, Calif.

In the last few months, however, Ida reports a shift in consumer interest back to diet products. She said Nestle reported the diet meal-replacement category last month was 13% ahead, with the liquid segment up 39%, after a year in which meal-replacement sales declined 13%.

"Consumers are interested in dieting again. People have tried the exercising and the low-fat diets. They are once again looking at diet products to help them lose weight," said Ida.

"We've had tremendous growth in our ready-to-drink, which now represents 70% of our volume and for the year is down just 3%," she said.

The climate for a sea change in weight-loss practices has been influenced by the advent of Redux from Wyeth-Ayerst Labs, Philadelphia, said to be the first new diet drug in 23 years. It won Food and Drug Administration approval late last year and began being distributed as a prescription drug in June. Industry analysts expected prescription sales of the anti-obesity drug to hit the $1 billion mark in five years.

Intended to be used along with a weight-loss program, the drug "has actually reopened the interest in weight-loss products. It has helped our category," said Ida.

Ida and others expect the prescription diet pill Redux will fuel sales of diet-aid drinks, powders and bars.

"All of our doctors are prescribing it. People are looking for the prescription remedy because it's quick and they think it's magic," said Gilda Gomez, director of pharmacy at Gerland's Food Fair, Houston.