The encyclopedia · R&D & Science · Product decision · 1968–2016
P&G spent 28 years developing Olestra — Wow! Chips caused 'anal leakage' and collapsed
P&G invented Olestra in 1968, spent 28 years on FDA approval. Frito-Lay launched Wow! Chips in 1998, selling $400M in year one. Then came the side effects.
Procter & Gamble · Frito-Lay (PepsiCo) · 1998
What happened
Procter & Gamble researchers discovered Olestra accidentally in 1968 while studying fats for premature infants. The compound — a sucrose polyester — tasted and cooked like fat but passed through the body without being absorbed, delivering zero calories. P&G spent 28 years and an estimated $200 million+ on testing, clinical trials and regulatory battles before the FDA finally approved it for use in prepackaged snacks on 24 January 1996 — one day before the original patent expired.
Frito-Lay was the first major customer, launching Wow! brand potato chips in 1998 with a $40 million marketing campaign. The launch was explosive: Wow! sold over $400 million in its first year, making it one of the most successful new snack introductions in history. Consumers loved the promise of guilt-free chips with all the taste of full-fat versions.
The problem emerged quickly. Olestra caused steatorrhea — greasy, urgent stool — colloquially known as 'anal leakage.' The FDA required a warning label: 'This Product Contains Olestra. Olestra may cause abdominal cramping and loose stools.' The CSPI ran a campaign collecting thousands of adverse-event reports. Sales collapsed to $200 million by 2000. The Wow! brand was rebranded as Lay's Light in 2004 and discontinued entirely in 2016. Olestra is now banned in the European Union and Canada. P&G sold its Olestra factory in 2002 and the compound lives on only as an industrial lubricant.
Why it happened
- Olestra caused steatorrhea (anal leakage) in many users — a side effect no amount of taste or calorie savings could outweigh, and one that made the product a national joke
- The FDA-mandated warning label on every bag turned the package into an advertisement for the problem — consumers read about cramping and loose stools before tasting the chip
- P&G spent 28 years and $200M+ ensuring the ingredient was safe to eat — but never asked whether anyone would want to eat something that caused oily stool, which was safe and unsellable
The lesson
A food additive that is safe but unsellable is a $200M research failure. The question is not 'can people eat it?' but 'would anyone choose to?' Nobody defines chips by loose stools.
Aftermath
The Olestra episode damaged P&G's reputation and the credibility of fat-free food technology. Frito-Lay reformulated Wow! chips but the brand never recovered. Olestra left the US market entirely by 2016 and remains banned in the EU and Canada. P&G repurposed the chemistry as Sefose, an industrial lubricant. The case is studied as a cautionary tale: regulatory approval does not equal consumer acceptance, and a warning label that says 'may cause loose stools' is not a label — it is a product killer.
Sources
- Wikipedia — Olestra (discovered 1968 by P&G; FDA approved 24 Jan 1996; Frito-Lay Wow! chips 1998; $400M first-year sales; anal leakage / steatorrhea; FDA warning label; sales fell to $200M by 2000; Lay's Light 2004; discontinued 2016; banned in EU and Canada)
- Mental Floss — The Olestra Fat-Free Snack Controversy of the 1990s (1968 discovery, 1998 rollout, $347M Wow! sales, FDA warning label, 2004 rename)
- LA Times — FDA Approves Olestra for Salty Snacks (Jan 25, 1996; P&G product to be marketed as Olean)
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