Slim-Fast 's delay in going low-carb still hurting results
low-sugar alternatives to its Slim-Fast brand sooner, as the diet
food subsidiary continued to under-perform during the second
quarter of 2004, according to the Anglo-Dutch consumer group's
results published today, reports Philippa Nuttall.
Overall, leading brand sales were flat in the second quarter and there was a futher slow down in Unilever's market growth, but the company has nonetheless stuck to its full year earnings forcast.
Unilever's underlying sales declined by 0.7 percent in the quarter and within this leading brands declined by 0.2 percent.
"The group's sales performance continued to be affected by the loss of market share in Slim-Fast during 2003," said Unilever in a statement.
The company chairman FitzGerald Burgmans acknowledged that plans to turn round the underperforming business of Unilever included "a full revamp of the Slim-Fast range."
"Slim-Fast was slow on the uptake as far as the low-carb trend was concerned," said London-based company spokesman Trevor Gorin. "The group saw Atkins, but not the trend behind it and it then took longer than Slim-Fast would have liked to get the low-carb and low-sugar brands together."
As recently as this week - at the launch of its low-sugar Optima range - Slimfast took a swipe at trendy diets, such as the low-carb regime saying: "The Slim-Fast Optima Diet arrives at a time when experts are calling for healthier weight-loss solutions instead of extreme diets that, unlike Slim-Fast, do not provide the balanced nutrition required to promote short-and long-term, healthy weight loss."
Despite, the company's distaste for "extreme trendy diets", Gorin commented that by the end of 2003, before Slim-Fast's low-carb range was on the shelves, 20 percent of its product portfolio was low-carb, and by the end of 2004, the whole brand will have been relaunched.
This has helped to stabilise market share over the last six months, but year on year sales are still down because of the progressive share loss through last year.
Slim-Fast hopes to make this up through sales of "Optima" launched this week with 50 percent less sugar than the classic shake, and with more low-carb alternatives.
Gorin denied there was any conflict between the idea of offering a "healthier weight loss solution than trendy extreme diets", and providing low-carb options.
"We are a consumer goods company and therefore take into account what customers need," he said. "A recent survey showed that 50 percent of Americans were on some kind of low-carb diet and so we provide what they want."
Unilever is the world's third-largest food group after Nestle and Kraft and ahead of Danone.
