Unilever is biting back
UNILEVER is fighting back against the Atkins diet craze which has taken a large chunk out of its Slim-Fast diet brand. Brokers warn that Slim-Fast's sales decline may have accelerated in the fourth quarter.
A range of 18 Carb Options - low-carbohydrate bars, sauces and salad dressings - is being launched in the US. New products are on the cards in Europe.
Unilever paid $2.3bn (£1.25bn) for Slim-Fast in May 2000 in a buying binge that included Bestfoods and Ben & Jerry's ice cream. Slim-Fast seemed to be prospering until 2003, when sales fell 15% in the first half, then 23% in the third quarter. US brokers fear the final quarter fall was 32%.
Having laughed off the Atkins diet as a fad, Unilever and rival food firms have woken up fast. The new range will have just six grams of 'net carbs' - calories less fibre - per portion.
It will be priced 20% to 25% above normal Unilever products - well below the costly Atkins range. Its US chief John Rice calls it 'a significant and serious launch for us'. He hopes for $1bn (£540m) sales in 2005.
Unilever's annual results are due on 12 February. Slim-Fast is only part of its problem. Annual sales growth in top brands has slowed from the target 5% to 3% and it needs to get back on target.
The shares, down from 628p in April, rose 1/4p to 522 1/4p, just 12 times forecast 2004 earnings. Their rating has slipped behind US food groups and well behind rival Procter & Gamble.
