CORRECTED - Kraft expands LiveActive to cereal and drinks

(Deletes "nuts" from headline and "Planters nuts" from paragraph 2; Planters will be promoted as having digestive health benefits but will not have LiveActive label)

By Brad Dorfman

CHICAGO, Dec 19 (Reuters) - Kraft Foods Inc (KFT.N) is expanding foods it says promote healthy digestion, but some analysts are not sure consumers are ready for prebiotic fiber -- the additive used in the new products.

The company plans to expand the LiveActive brand in January with new Crystal Light drink mix sticks, and a new breakfast cereal, according to Amy Wagner, senior director of integrated marketing at Kraft.

Kraft, which has been using health and wellness claims as a way to boost sluggish sales, has already had some success with LiveActive cheese snacks and cottage cheese.

The new products use prebiotic fiber to help promote regularity, not the probiotic cultures consumer might be more familiar with, a change that analysts said could confuse shoppers.

"Prebiotic, probiotic, I think that's a meaningless distinction for consumers," said Bob Goldin, executive vice president at Technomic, a food and restaurant research and consulting firm.

Foods and vitamins with probiotics have been a growing market, with sales of $954 million in the 52 weeks ended Dec. 1, up 42.2 percent from a year earlier, according to the Nielsen Co, which tracks data in the U.S. food, drug and mass merchandiser channels, excluding Wal-Mart.

Of that, $729.8 million was from yogurt and yogurt drinks, Nielsen said.

Probiotics are live cultures, also known as "good bacteria," that are used in foods to help aid digestion. Prebiotic fiber, which will be used in the new Kraft products, feed the probiotics.

HELPING THE GUT

While consumers in other countries, such as China and Japan, have embraced the concept of digestive health, it is still relatively new in the United States, said Linda Van Horn, professor of preventive medicine at Northwestern University's Feinberg School of Medicine.

"The food industry, I believe, is recognizing an awareness and a growing interest in this area," she said.

Kraft's LiveActive natural cheese, launched in September, has already gained 2.6 percent of the market in its category, Tim McLevish, executive vice president and chief financial officer, said during a conference call on Oct 31. Kraft declined to provide more recent data.

Wagner said Crystal Light was a product that was already seen as having the health benefit of hydration, so adding something else to promote health and wellness with the product made sense.

But consumers might be more skeptical about getting a benefit from an manufactured product such as Crystal Light than from a natural dairy product, Technomic's Goldin said.