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Putting the fat back

Published Sep. 13, 2005

All right, American eaters, you win. Nabisco is throwing in the towel.

In a nod to the longstanding disconnect between what people know is good for them and what they will actually put into their mouths, Nabisco plans to reintroduce its pioneering line of low-fat and fat-free cookies and crackers this summer _ this time, with more fat.

Five years ago Nabisco introduced Snackwell's, promising a guilt-free taste of foods once feared by the fat-conscious. The crackers and cookies hit supermarkets like a whirlwind: Snackwell's sales zoomed, peaking at about $490-million in 1995. But sales recently have slumped amid fierce competition and complaints about the taste.

"I thought they tasted like sugary straw," said Marion Nestle, head of nutrition and food studies at New York University.

To fan new life into its languishing brand, Nabisco plans, for starters, to include 50 percent more fat per serving in its Snackwell's Zesty Cheese Crackers. The Cracked Pepper crackers, like the Wheat Crackers, will go from no fat to 1.5 grams a serving, which is about 40 percent of the fat in a leading mainstream cracker, according to the company, which would not name the cracker.

While still below the levels of full-fat products, the Chocolate Sandwich will have 20 percent more fat. One new cookie product will tip the scales with 3.5 grams of fat per serving, and another has been cranked up to 4 grams of fat, the most any Snackwell's product has ever had. A typical mainstream cookie has anywhere from 6 to 8 grams of fat per serving.

With one exception _ the Devil's Food Cookie Cakes, which are remaining fat-free _ all Snackwell's cookies and crackers will be classified as "reduced-fat," rather than low-fat or fat-free.

Foods with less than the customary component of fat have a checkered success rate with consumers, and even the popular ones may be losing some of their allure.

The McLean Deluxe, a reduced-fat hamburger introduced by McDonald's in 1991, was driven from the market five years later. Sara Lee Corp.'s line of low-fat frozen desserts bombed, as did Taco Bell's Border Lites tacos and KFC's skinless chicken option. Taco Bell and KFC are now owned by Tricon Global Restaurants.

Baked Lay's potato chips, made by the Frito-Lay division of Pepsico, surged over the past two years, a spokeswoman said, but are now flattening out. The company's response has been to increase the fat this year in two flavored varieties of Baked Lay's. Sales of reduced-fat baked goods by the Entenmann's division of Bestfoods also have declined, although adding more fat to the mix last year has slowed the decline, a spokesman said.

In general, consumption of artery-friendly foods has trailed off over the past couple of years, with only about 13.3 percent of snack foods falling into the "better for you" category last year, according to the NPD Group, a research organization that follows the eating habits of 2,000 families. That figure was down from 15.3 percent in 1996, though it had risen steadily in the previous six years. Only about 11 percent of the cookies consumed in the second half of last year were fat-free or low-fat, according to NPD.

Much of the reason may be a matter of taste. But deeper psychological issues may also be involved, a kind of flinging caution to the winds, perhaps, or a late-blooming adolescent rebellion _ the same one that has people taking up cigars and ordering giant steaks again.

At the same time, consumers still insist they are worried about fat in their diets. "Shoppers' greatest nutritional concern continues to be fat," said Carole Throssell, a spokeswoman for the Food Marketing Institute, a supermarket trade association.

"They were initially interested in low-fat foods because they thought, "We'll be able to consume without guilt.' But they found they weren't getting their cravings satisfied. Now there's been sort of a shift, to thinking that you can eat slightly less of a higher-fat product and get your craving satisfied."

Nabisco, which has watched its Snackwell's sales decline by at least 15 percent a year since 1995, with a further 25 percent falloff in the first quarter of this year, says the reworked versions are simply a response to the changing marketplace.

"The leading-edge consumers were going for the maximum fat reduction possible," said Terry Preskar, senior business director for Snackwell's. "Then we found consumers were willing to accept a little bit more fat in pursuit of better taste."

Nabisco has a lot riding on the revamping. Gone are the days when consumers used to chase the company's trucks down the street, hoping to get their hands on Snackwell's products, which were in chronically short supply when they first hit the market.

Supermarket sales alone fell from a peak of $333-million in 1995 to $215-million last year, according to Information Resources Inc., which tracks supermarket sales. "This went up and down like a technology stock," groused John M. McMillin, a food industry analyst for Prudential Securities.

The latest annual report for RJR Nabisco Holdings Corp., the parent company, mentions Snackwell's as a drag on profits more than once, pointing out that it erased gains made elsewhere in the company by brands like Oreo, which continue to grow. Net sales in the biscuit division were 4 percent lower last year, the report states, "primarily due to volume declines in Snackwell's and breakfast snacks, which more than offset volume increases in other core cookie and cracker brands."

Critics say Nabisco was at fault from the start, wrongly assuming that the product line's popularity would be self-sustaining.

"Snackwell's was put on the market too early," said Erika Gritman Long, an analyst with J.P. Morgan, "and the product didn't have a terrific taste. They failed to upgrade the product as technology allowed them to do that, and the competition increased dramatically. On top of that, you had inconsistency in terms of marketing dollars. It's a recipe for disaster for a brand."

Long says the company's new strategy is to win over consumers with an improved taste, and then reduce fat as technology and products like Olestra become available for baked goods. "It sort of erodes part of the value of the brand to the consumer," she said of the decision to add fat. "But it's a lot less of a gamble now than it used to be. It's either going to keep dropping at 30 percent a year, or help stabilize it a little bit."

The new cookie products include chocolate-covered Mint Cremes, which have 1.7 grams of fat and 55 calories each, and Caramel Delights, which have 2 grams apiece. Each is about half the fat of a comparable mainstream cookie, Nabisco says. A serving of Mini Chocolate Chip cookies now has 4 grams of fat, versus 3.5 in the old version, which also works out to half the fat of a mainstream brand.

Calorie counts will rise marginally in the new products, Nabisco says. With extra sugar there are 130 calories in a 29-gram single serving of Mini Chocolate Chip cookies, nearly as much as the 160 calories in the 32-gram single serving of Chips Ahoy.

Only the Devil's Food cookie has been re-engineered without adding fat, Preskar said, though the marshmallow component has been bolstered. The fat content was left alone, she said, because the Devil's Food cookie is "the biggest icon in the line," the top seller, "and it was very important to us that we keep it fat-free."

Two products are being discontinued: the Golden Cracker and the Cinnamon Graham Stars. "We felt they weren't as distinctive as we wanted them to be," she said.

The suggested retail price will remain the same, at $2.29 a box. "We are expecting significant growth, and a significant reversal in the business trends that we've seen."

All the new products are supposed to be in stores by the end of June. Even the green Snackwell's box has been redesigned, with bolder lettering, the words "New" and "More Tender" on some labels and, most noticeably, the absence of words like "low-fat" or "fat-free."

Those words, Preskar said, are really not necessary. "Consumers already identify Snackwell's as being low-fat or reduced-fat," she said. "There's no longer any need to scream it on the package."