Fourteen years after Unilever spent $2.3bn (€1.7bn) to buy Slim-Fast, it has sold up for an undisclosed sum to a private equity player. Analyst and author Julian Mellentin tracks the decline of a mega-brand and considers what he sees as a category in crisis.
Launched by the Thompson Medical Company back in 1977 Slim-Fast was the original diet-shake.
Unilever said it was going to make it the centre-piece of its weight management strategy. What became apparent was that its marketing skills don't transfer well to the weight management arena.
Unilever’s weight management strategy an expensive failure
Problems with Slim-Fast began almost immediately after Unilever executives took over the controls. Sales of $600 million (€460 million) in 2000, the year Unilever bought the brand, slid to $550 million (€423 million) by 2002, despite Unilever upping marketing investment.
Then in 2003 the Atkins Diet burst onto the scene and Slim-Fast – with its carbohydrate-heavy shakes, powders and bars – was in trouble. Sales fell more than 20% in 2003 alone, to about $410 million (€315 million).
By 2012 Slim-Fast's sales had fallen by 70% compared to when Unilever bought it. Haemorrhaging.
Over the years Unilever tried every possible tactic to reverse the slide – and every one has proved a failure. A few examples:
- Hoodia gordonii. In 2004 Unilever announced that it was investing $40 m (€29.5m) to secure exclusive global rights to Hoodia gordonii - the extract from a cactus plat found in the Kalahari desert used by the indigenous Kalahari people as a satiety aid – despite the fact that there was very little supporting clinical data and a novel foods approval would be needed and the ingredient is very difficult to formulate into foods and beverages. Slim-Fast was touted as the likely platform but by 2008 Unilever announced that its venture into hoodia was over. $40 million invested for zero return.
- Lipton Linea. Remember "weight management tea" based on green tea catechins? Didn’t think so. It didn’t last long.
- Changing the product portfolio
- New marketing slogans
- Focusing on value and low prices
- Loyalty points
- Focusing on social media
- Supermodel presence: Slim-Fast brand was originally grown on the back of celebrity endorsements, which Unilever scaled back. It revived these, with Rachel Hunter – the supermodel best known as the former wife of ageing rocker Rod Stewart – representing the brand.
Since Slim-Fast was first exposed as an Achilles’ heel for Unilever’s ambitions, the weight management market has been transformed. It can be argued that weight management is no-longer a distinct category – since keeping a healthy weight is in the back of many consumers’ minds every time they make a purchase.
For example, it’s now normal among health-conscious consumers to reduce their sugar consumption and question the sugar content of products – aided and abetted by a media that, in most countries, seems keen to attack any product that is perceive as having too much sugar.
Sports nutrition has also begun to blend with weight management, with the sales growth in sports nutrition driven by people who are managing their weight. High-protein brands are much more credible in the consumer’s mind than a brand like Slim-Fast, with its very strong dieting identity.
Peter Wennstrom, President & Expert Consultant, The HealthyMarketingTeam:
"The dominant trend is health and wellness through balanced diet with right nutrition and Emerging Trend is more holistic lifestyle and balanced diet is part of that healthy lifestyle.
Any quick fix ‘solution’ that promises weight reduction is no longer aspirational or ethical or worse still is losing credibility on effectiveness also.
I think diet foods positioned as problem (obesity) – solution (diet brand) is a recessive trend!"