Analysis of the Market for Olestra Based Potato Chips Essay -- Busines

An Analysis of the Market for Olestra-Based Potato ChipsWho wouldn?t want to munch on delectable potato chips all daytime without theworry of adding extra inches to the waistline? This is the assumption the manufacturersof Olestra-based potato chips are banking on. Olestra is a ?fake-fat? it is a cooking oil,made by a combination of saccharose and vegetable oil, whose numerous fatty acid chainsare stodgy by the human body. Therefore, it imbues potato chips with the sameflavor and texture as their full-fat cousins but diminishes the guilt factor substantially.Olestra chips have zero fat and half(prenominal) the calories of the full-fat varieties (ACSH).Obviously, this is quite an attractive prospect to chip producers, especially in the realtimes where thinness and physical fitness reign supreme. Presently, there go forth to bethree major potato chip brands using the fake-fat engine room Frito-Lay?s WOW Chips,Procter and put on the line?s Fat Free Pringles, and Utz blade Yes ch ips (though Utz is soldalmost exclusively on the eastern half of the country). The market place structure is a bit beting, considering that the Olestra oil is an innovation of Procter and Gamble alone.Adding to this interest is the heated controversy surrounding the fake-fat chips, which hasundoubtedly had some effect on pricing and market behavior.Before examining the market workings of today, it could perhaps be beneficial toreview a brief history of Olestra. Olestra is not a new fat substitute by any meansProcter and Gamble scientists discovered it in 1968. They esterified eight fatty acidresidues to a molecule of sucrose, reasoning that the increased number of fatty acidchains would do premature infants to absorb more fat. However, ... ...98.http//www.acsh.org/publications/story/olestra annual Report Pepsico Corporation. ?1998 Annual Report.? 1998http//www.pepsico.comAnnual Report Pepsico Corporation. ?1999 Annual Report.? 1999http//www.pepsico.comAnnual Report Pepsico Corpo ration. ?2000 Annual Report.? 2000http//www.pepsico.comBaumol, William J. and Alan S. Blinder. economic science Principles and Policy. Fort WorthHarcourt. 2001Center for Science in the Public Interest. ?A Brief History of Olestra.? 2000.http//www.cspinet.org/olestra/history.htmlCNN. ?FDA Panel Generally Endorses Safety of Olestra.? June 17, 1998.http//www.cnn.com/HEALTH/9806/17/olestra.fdaFDA Backgrounder. ?Olestra and Other Fat Substitutes.? November 28, 1995http//www.fda.gov/opacom/backgrounders/olestra.htmlOlean. ?Answers to Questions about Olean.? Procter and Gamble. 1998http//www.olean.com