Will Fake Fat Yield Plump Profits?

By Gordon Bock

Imagine chowing down cheesecake, feasting on French fries and pigging out on potato chips with little worry about calories. This fat-filled fantasy is still just an overeater's dream, but it moved closer to reality this month when Procter & Gamble dispatched a truck from its Cincinnati headquarters to the Food and Drug Administration in Washington. Its carefully guarded cargo: 30,000 pages of documents detailing tests of a new cholesterol- and calorie- free fat substitute that P&G calls olestra. The shipment included a petition asking the FDA to consider approving the substance's use in deep- fried foods, oils, shortenings and salty snacks.

( It could take two years for the Government to sort through the mound of data, conduct its own tests and allow fake fat to reach menus and supermarket shelves. But Wall Street is already optimistic that the maker of Ivory soap, Crest toothpaste and Crisco oil has its hands on the greatest food-industry breakthrough since, well, sliced bread. Within two days of the FDA filing, P&G shares jumped 10%, to 93 5/8. P&G (1986 revenues: $15.4 billion) has "hit a grand-slam home run," says Hercules Segalas, an analyst for the Drexel Burnham Lambert investment firm. "This is going to be the single most important development in the history of the food industry."

Though P&G apparently has a large lead in the race to market a fat substitute in the U.S., scientists for several rival companies are working on similar substances. Among the possible competitors: the Frito-Lay division of PepsiCo (maker of Lay's potato chips and Fritos corn chips), CPC International (Mazola corn oil and Hellmann's mayonnaise) and the Lever Brothers subsidiary of Unilever (Imperial margarine and Mrs. Butterworth's syrup and pancake mixes).

At the center of all the attention is a class of compounds known as sucrose polyester (SPE). Although that may sound like a new material for leisure suits, SPE looks and tastes like vegetable oil but passes through the body without entering the bloodstream. Research at the University of Cincinnati appears to show that it can reduce a person's existing cholesterol levels. It supposedly satisfies what market researchers call the "mouth-feel" requirement that eludes so many yucky-tasting diet-oriented products. P&G, which has tested olestra on more than 1,800 people in the past 15 years, contends that foodstuffs containing it are as flavorful as those with the cholesterol-laden oils dear to so many American hearts, though perhaps not their arteries.

Despite extensive study, there is no assurance that unexpected side effects of olestra and other forms of SPE will not appear if the compounds go into wide use. Moreover, skeptics fear that many dieters will fill up on SPE-laden snacks and not eat enough natural foods with essential vitamins and other nutrients.

The allure of SPE, though, makes the mind boggle -- and the mouth water. Industry watchers suggest that someday supermarkets might stock extra-low- calorie cookies, diet doughnuts and even fat-free ice cream. Says P&G Spokesman Donald Tassone: "We have done a lot of testing on different & foods." If research produces food that seems sinful but is palatable to waistline watchers, then P&G, and any other companies that follow its lead, should have no trouble fattening their bottom lines.

With reporting by Bernard Baumohl/New York and Ginny Hunter/Cincinnati