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 day without theheadache 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 sucrose and vegetable oil, whose legion(predicate) fatty acid chainsare indigestible by the human body. Therefore, it imbues potato chips with the sameflavor and texture as their full-fat cousins but diminishes the guilt operator substantially.Olestra chips have zero fat and half the calories of the full-fat varieties (ACSH).Obviously, this is quite an attractive prospect to chip producers, especially in the currenttimes where thinness and physical physical fitness reign supreme. Presently, there appear to bethree major potato chip brands using the fake-fat technology Frito-Lay?s WOW Chips,Procter and put on the line?s spicy Free Pringles, and Utz Bra nd Yes chips (though Utz is soldalmost exclusively on the eastern half of the country). The market structure is a bitinteresting, 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 discover it in 1968. They esterified eight fatty acidresidues to a molecule of sucrose, reasoning that the increased number of fatty acidchains would help premature infants to suckle more fat. However, ... ...98.http//www.acsh.org/publications/story/olestraAnnual Report Pepsico Corporation. ?1998 Annual Report.? 1998http//www.pepsico.comAnnual Report Pepsico Corporation. ?1999 Annual Report.? 1999http//www.pepsico.comAnnual Report Pepsico Corporation. ?2000 Annual Report.? 2000http//www.pepsico.comBaumol, William J. and Alan S. Blinder. Economics Principles and Policy. Fort WorthHarcourt. 2001 mettle 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