Belt-Tightening & the Diet Aisle

The food industry has looked many places for growth, but the source of its latest scheme may be the unlikeliest yet , a deceased cardiologist and his 21-year-old diet book.

It's a sad irony that cardiologist Robert Atkins died last April just as the low-carbohydrate diet he championed for years was scaling new heights of popularity and influence.

Within a month of his death, The New England Journal of Medicine and Harvard Health Letter published research indicating that his low-carb diet, long maligned by much of the medical community, appears to be effective in reducing both weight and cholesterol.

The Atkins diet, which has people munching on pork rinds rather than carrots, and eschewing high-carbohydrate foods such as fruits , and even some vegetables , while still eating plenty of fatty foods, has long flown in the face of conventional medical wisdom. Accordingly, most doctors, along with the U.S. Dept. of Agriculture's (USDA) food guide pyramid, historically encouraged high-carbohydrate, low-fat diets.

Medical researchers are only now coming around to what many Atkins adherents have believed , and practiced , for years. Recently, Unilever partly blamed its disappointing first-quarter on sales the Atkins diet had taken from its Slim-Fast products.

Slim-Fast into the act

Now Slim-Fast is marketing its own line of low-carbohydrate snack bars. And with a line of its own low-carb products built around the diet and the name, Atkins Nutritionals, Ronkonkoma, N.Y, is bringing new products to market even faster. Meanwhile, a host of other food and beverage marketers are working to make low-carbohydrate products the next big thing for the food industry.

New product tracker Marketing Intelligence Service (MIS), Naples, N.Y., publisher of Product Scan, indicated that low- or no-carbohydrate food and beverage products numbered 339 in 2002, down slightly from 352 in 2001 but still well above 211 in 2000 and only 47 in 1999.

"I think you'll probably see a lot more of these [no- or low-carbohydrate] tags on products that don't have any carbohydrates anyway," says Tom Vierhile, general manager with MIS. He's also seeing a surge in the closely related sector of sugar-free or reduced-sugar candy products, which accounted for 15 percent of 2003's new candy offerings through August, compared to only 6.6 percent in 1999.

"It's more than doubled, so it's a very strong trend there," Vierhile says. "They really go together, since processed sugar is something the Atkins diet warns against."

Russell Stover, which already claims to market the top-selling sugar-free candy, also recently moved into low-carb candies, in part based on the experience of company president Tom Ward, who reportedly lost 25 pounds on low-carb diets.

In a departure from its traditional boxes of chocolates, the nine-item Russell Stover Low Carb line launched in May comes in blazing red packages and candy bar-size quantities, which sell for about $1 each and include chocolates, mints, pecan bars and peanut butter cups.

"They're targeted to low-carb-conscious people," says John O'Hara, Stover's vice president of marketing. "It's an offering that allows people to satisfy their chocolate cravings and still stay on the diet. It's just been tremendously successful."

The Low Carb formulation is more than just another way of saying sugar free, O'Hara says. "The chocolate flavoring is a little different," he says. Still, he concedes, "when you take out the sugar, it automatically makes it low carb. Someone on a low-carb diet could eat our sugar-free candy."

Low-carb dieters may seem like a small niche, but they really aren't, O'Hara says. Russell Stover learned from its experience with sugar-free products that the market is far broader than it suspected. While the company initially targeted advertising fairly narrowly in magazines for diabetes sufferers, it found more success when it moved to general-market magazines such as People, O'Hara says. Russell Stover is following a similar broad-based advertising plan for Low Carb, in addition to an extensive tie-in with the WebMD site.