Quaker Enters Functional Foods

Oatmeal’s healthy plot has thickened. Makers of the miraculous mush – “Oatmeal helps reduce cholesterol,” its familiar cylindrical package boasts – Quaker Oats Co., Chicago, entered into a deal with Swiss-based Novartis Consumer Health, Inc. to develop a functional food line and beverage brands in North America.

The Chicago-based venture, dubbed Altus Food Co., has set its sights on the usual healthy food suspects: kids, women, aging adults, and athletes. Quaker estimates the functional foods category at $10 billion to $20 billion in the U.S. and expects it to grow at an annual rate of 10 percent.

“Not only does Novartis have the nutrition knowledge and clinical research skills necessary to create superior products, but it also is a leader in functional foods,” says Greg Shearson, president-general manager of Altus and former vp of Quaker New Ventures.

Novartis’s key businesses include OTC medicines, health and functional nutrition, infant and baby nutrition, and vitamins and supplements.

Elsewhere on the health front, H.J. Heinz Co., Pittsburgh, has added an organic and nutritional foods unit to its seven “core categories,” which include ketchup, frozen foods, and pet food. Sharon Wicker, vp-strategy for Heinz North America, will head the new unit and work with Kevin Krail, general manager-functional foods, to establish a global marketing team. Wicker joined Heinz from Conagra last December.

Clear Channel Communications, the San Antonio-based radio and billboard king, is buying SFX Entertainment in a deal valued at nearly $4 billion.

The move gives Clear Channel – on the verge of becoming the world’s leading radio broadcaster through a merger with AMFM, Inc. (November promo) – access to SFX’s massive venue-operation and event-production business, which last year produced nearly 25,000 events at its 120 locations. SFX also operates a sports-management group that handles such high-profile stars as Michael Jordan, Pedro Martinez, and Kobe Bryant. Clear Channel plans to link the operations by promoting SFX events on its radio stations and billboards.

Hain Food Group, Uniondale, NY (of which H.J. Heinz owns a 19.5-percent stake) – purchased Celestial Seasonings, the Boulder, CO-based maker of such popular teas as Red Zinger and Sleepytime, for $390 million. Hain president-ceo Irwin Simon will become chairman-president-ceo of the new company, to be called Hain Celestial Group, while Celestial chairman Mo Siegel will serve as vice chairman.

America Online, Dulles, VA, joined with footlocker.com in a two-year, $21.5 million venture. AOL will feature the dot-com’s three brands – Foot Locker, Champs Sports, and Eastbay – on its online shopping marketplace. The effort will be promoted by footlocker.com’s parent, Venator Group, New York City, via P-O-P displays and co-branded catalog promotions.

Chevrolet Motor Division, Detroit, signed a multi-year deal with figure skating star Michelle Kwan that will include advertising, marketing, and promotional work. The 19-year-old Olympic gold-medal hopeful drives a 1998 Cavalier she received for earning perfect scores at U.S. National Competitions. Chevy is in the middle of a 10-year agreement with the United States Figure Skating Association.

The online units of off-line rivals Cox Target Media and Catalina Marketing Corp. have agreed to work together on a Web-based coupon venture. The deal gives consumers access not only to the national coupons found on Valupage.com, St. Petersburg, FL-based Catalina’s SuperMarkets Online service, but to local offers on Largo, FL-based Cox’s Valpak.com.

HispanAmErica Response Marketing, Newfoundland, PA, and New York City-based Rapp Collins have aligned to provide services to U.S. companies targeting worldwide Hispanic markets. HispanAmErica, as the joint venture is called, will be run by HRM president Beatriz Mallory.

Pepsi-Cola Co., Purchase, NY, inked an endorsement deal with Sammy Sosa that will put the baseball slugger in a spring TV spot and on summer P-O-P displays, and get him involved in the company’s Takin’ it to the Fields youth baseball and softball programs. Pepsi has pledged to donate $100,000 to Sosa’s own charitable organization if he hits 70 home runs this season; the Chicago Cubs star hit 66 and 63 homers in the past two seasons.

SoBe Beverages, Norwalk, CT, struck endorsement deals with United States Ski Team member Bode Miller and professional skateboarder Andy Macdonald to become members of the company’s Team Lizard, an athlete stable the company uses for marketing efforts.