The move comes as part of a settlement agreement with the consumer advocacy group Center for Science in the Public Interest (CSPI), which in January this year threatened to sue to snack firm.
The pressure group had teamed up with a Massachusetts consumer who planned to sue the company as a result of suffering severe gas and cramps after eating Frito Lay's Ruffles Light potato chips.
The firm, which uses Procter & Gamble's olestra brand Olean, now says it will move an existing Olean logo up to the top of its chip packets, as well as display a banner reading "made with olestra." The back of the packets will also feature a statement noting the presence of the ingredient.
The agreement also includes a $150,000 award payment to the Harvard Medical School Division of Nutrition, which Frito Lay says is a group that "continues to impact our understanding of nutrition and health."
Olestra has been under attack by consumer groups due to its possible link to a reduced absorption of important nutrients and certain abdominal symptoms in some consumers.
Consumer complaints of side effects associated with the product, such as abdominal cramping and loose stools, had led the nation's Food and Drug Administration (FDA) to require that olestra-containing foods carry a warning label clarifying its presence and possible side effects.
But in 2003 the FDA dropped the label requirement, saying that new research revealed consuming olestra-containing chips resulted in a "minor increase in bowel movement frequency," but that these side effects were similar to those experienced when eating fruit or fiber. It concluded that consumer awareness of olestra's possible effects was high enough, and therefore considered the warning unnecessary.
However, the terms of the current settlement agreement highlights the thin line walked by food manufacturers who market their products within legal requirements, but who increasingly become the target of consumer lawsuits.
According to the CSPI, more than 3,700 consumers have filed reports on its website about adverse reactions to olestra-containing products in the past decade.
In one example of these, a 37-year-old woman who had eaten Doritos Light and Ruffles Light chips was admitted to hospital after suffering vomiting and diarrhea. Her symptoms lasted for two days and she required six bags of intravenous fluids, said the CSPI.
Frito Lay, which uses the fat replacer in its Doritos Light, Lay's Light, Ruffles Light and Tostitos Light, told FoodNavigator-USA that the changes to the packaging of these products will make it easier for consumers to recognize products containing olestra. However, it would not reveal any further information about the settlement.
"We're pleased that Frito-Lay agreed to these modest changes, which are sufficient to avoid a lawsuit and will help consumers who know enough to avoid olestra to do so," said CSPI executive director Michael Jacobson.
"That this unsavory chemical was allowed to enter-and remain-in the food supply at all represents a serious mistake by the Food and Drug Administration," he added.