Companies Rush to Get the Dreaded Fat Out : * Food: Taste is considered the key to success and the reaping of profits. A selection of substitutes is already available.

Imagine being able to eat gallons of ice cream, trays of pastries and huge bags of french fries without having to worry about consuming too many calories or too much fat and cholesterol.

Now you can.

Following the success of sugar substitutes such as NutraSweet, food-making companies have streamed into the fat-replacement market with products that imitate the texture and consistency of oils, butter, lard and other authentic fats.

These products--some being made from blends of skim milk, egg whites and grains--contain little or no fat and are used to substitute for real fats in salad dressings, frozen desserts and baked goods.

Fat substitution is nearly a $500-million industry--one that could balloon to $1 billion by the end of the decade, analysts say. But as companies invest in this growing market, industry observers question whether these products will generate thick or lean profits in the coming years.

“Everybody is chasing the golden goose,” said John M. McMillin, a food analyst for Prudential Securities in New York. “We are only in the first inning of the game, and everybody’s rushing to be a player. It’s difficult to quantify who’s going to win the game.”

Analysts say that although the fat-substitute industry is full of potential for food companies, they are uncertain whether manufacturers will be able to create fake fats that give foods the same taste as those made with authentic fats.

For while health experts agree that most Americans should reduce their consumption of fat products, industry observers say that taste will be the bottom line on whether fat replacers are a success.

“People want to eat light. But in the end, the taste buds are the ultimate discriminator,” said James D. Kappas, marketing manager for Lite Food Ingredients of Pfizer Inc. Pfizer’s fat replacer, polydextrose, is being used in M&M;/Mars’ new Milky Way II candy bar, which the company says has 25% fewer calories than its original brand. The new bar will be introduced in April in seven states, including California.

Meanwhile, National Starch & Chemical Co., a subsidiary of Unilever Group, has introduced N-Lite, a line of starch-based fat replacers that will soon be available to manufacturers.

The Bridgewater, N.J., company has developed five different patterns of fats that mimic the taste of oils and shortening, heating the race to introduce the perfect fat substitute to a “frenzy,” analysts said.

“We look at these five different patterns as high-tech products,” said Gary A. Zwiercan, vice president of the company’s food-products division. “Unlike many of the fat substitutes on the market today, ours is user-friendly, it’s commercially available and we already have received orders from food processors.”

Zwiercan would not disclose the companies that have expressed interest in N-Lite products.

N-Lite products need no approval by the Food and Drug Administration, because the fat substitutes are made from ingredients--such as guar gum and nonfat dried milk--that are deemed safe.

Other fat substitutes are still awaiting FDA approval. For example, Kraft General Foods, the nation’s largest food company, is still awaiting approval for its Trailblazer fat substitute, which would be used in frozen desserts and other products.

For two decades, Procter & Gamble Co. has failed to get its fat substitute, Olestra, on the market. Olestra, made of sugar, is not absorbed or digested by the body and adds no calories to food products. The manufacturer says it can withstand high temperatures, but the FDA has yet to approve it for any use.

Already, however, there are at least four major fat substitutes available to food makers and contending with N-Lite:

* Simplesse, introduced in 1988 by Monsanto Co., the company that manufactures NutraSweet, is made of egg whites and milk protein. It is available in Simple Pleasures, a frozen dessert.

* Stellar, made by A. E. Staley Manufacturing Co., a unit of Britain’s Tate & Lyle, was introduced last year. It is a corn-starch-based fat substitute that can be used in cheese spreads, frostings and margarine.

* Slendid, produced by Hercules Inc., is made from pectin.

* Pfizer Inc. has Litesse, which can be used to substitute for fats in frozen desserts, candies and chewing gum.

With so much competition, food companies will have to focus their attention on flavor, said Mel Wolkstein, a food consultant at South Orange, N.J.-based Reach Associates.

“Now, it’s a question of recipe and tastes,” Wolkstein said. “There are so many different recipes for making different foods. It’s like being a cook: You keep trying different ingredients and hope it tastes good. That’s the whole ballgame.”