BRAND HEALTH CHECK: Slimfast - Atkins poses problem for struggling Slimfast

Unilever has blamed Slimfast as a major contributor to its misfiring growth plan. Can the consumer goods giant counter the Atkins diet effect, asks Mark Kleinman.

It has been a less than impressive week for Unilever. When the Anglo-Dutch consumer goods giant reported a surprise trading update last week, industry commentators were quick to point out the firm's 'Path to Growth' strategy was in less than rude health.

Instead of the 5% to 6% growth target for its core brands, Unilever co-chairman and chief executive Niall FitzGerald said the full-year figure would be closer to 3%.

He was not slow to point his finger at the decline of once-dominant dieting brand Slimfast as a major contributor to the slowdown in growth.

Unilever's health and wellness foods unit, in which Slimfast sits as the flagship product, saw sales tumble 23.5% in the third quarter. Suddenly, the £1.4bn acquisition of the Slimfast business three years ago might be looking a tad expensive.

The reason for this decline can be summed up in one word: Atkins. The low-carb craze that has swept across the Atlantic has had the effect of a tornado on the credibility of Slimfast. Despite a series of health scares, there is little sign of the whirlwind abating.

It has prompted serious Unilever soul-searching and earlier this year it relaunched Slimfast in the UK. This involved revamped packaging design and products, and a dieting model based on 'the Slimfast Day', which includes controlled snacking.

Early signs suggest the sales decline has been arrested, although investors will want concrete information when the company formally reports third-quarter results.

Unilever has announced further plans for Slimfast with the brand's launch into the frozen ready-meals category. With the UK market for slimming foods worth £110m, according to Mintel, its revival strategy is under the closest scrutiny.

We asked Miriam Jordan-Keane, who ran the Heinz Weight Watchers account at Bates UK, and former Walkers Crisps marketing director Jonathan Turner, now running his own consultancy, Makari, for their perspectives on Slimfast's turnaround plan.

VITAL SIGNS

UK retail sales of slimming foods by type

2001 1999

(pounds m) % (pounds m) % % chng

Meal replacements 99.1 90.6 93.3 90.5 6.2

Appetite suppressants/

controllers 7.3 6.7 6.8 6.6 7.4

Very low calorie diets 3.0 2.7 3.0 2.9 -

Total 109.4 100.0 103.1 100.0 6.1

Source: Mintel

DIAGNOSIS

JORDAN-KEANE

Was there ever a world without Atkins? Pick up a newspaper or magazine or join any group engaged in the business of eating and see how popular it is. Poor old Slimfast.

A year or so ago, it seemed that the biggest threat was coming from the 'positive health' category and that the competition was Tesco's Healthy Eating and Sainsbury's Be Good To Yourself ranges. The emergence of these brands served to position Slimfast, and other seemingly dated diet brands, as the punitive health option, all about deprivation.

The message was clear - a little of what you fancy does you good. I defy anyone to find a dieter who would choose a 'delicious milkshake' over spaghetti bolognese, if both had equal amounts of calories and fat. And then came Atkins.

And a lot of what you fancied did you good - as long as it wasn't carbs.But there is hope for Slimfast. Playing up the positive benefits of a balanced diet must be the way forward. But to beat off supermarkets and Atkins, it has to taste good. And it needs to work fast. If it can deliver on both of these, it may yet make Atkins an early-noughties fad.

JONATHAN TURNER

Slimfast is a great invention: a diet in a can. It is quick and convenient to use, requires no calorie-counting and is a clinically proven, healthy way to lose weight. The proposition is clear; it helps you do exactly what it says on the can.

We all remember the 90s commercials based on testimonials of people shedding weight the Slimfast way, but now the brand is in crisis.

Nine out of ten dieters are habitual dieters, trying every diet in a constant cycle of boom-and-bust weight loss. The majority of these will have tried Slimfast and have now moved on.

Although Slimfast recommends a structured eating plan, the nature of the diet is artificial. The diet was founded on milkshakes, powdered drinks and soups. The appetite appeal hardly compares with the Atkins diet, which allows carnivores to feast on fillet steak and deep fried Camembert. Weight Watchers says you can eat everything in moderation - just count the points.

Contrast this with the limited Slimfast. Boredom has set in and the lack of satisfaction has driven many dieters to the larder.

TREATMENT

- Invest in R&D. Develop products that taste great and people really enjoy eating.

- Communicate the positive benefits of healthy eating, perhaps even beyond just slimming - great skin and shiny hair, for example.

- Confidently celebrate the heritage. It's a great name and has worked successfully for years. The 'generations of women ...' route has frequently proven effective.

- Extend portfolio of products offering credible meal alternatives.

- Improve the appetite appeal of the products.

- Take the dieting high ground. With the Atkins diet under pressure from health lobbyists, Slimfast can own the health platform.

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