1999
47
2000
211
2001
352
2002
339
Source: Marketing Intelligence
According to Atkins Nutritionals, 12.7 percent of the U.S. adult population (or roughly 25.4 million people) either follows or claims to have tried the Atkins diet. Another 18.4 percent, or 36.7 million, say they plan to try Atkins. These figures don't include other "low-carb followers" who use Atkins "clone" diets or follow their own low-carb regiments, according to the company.
Russell Stover hasn't changed the fat content in its Low Carb products. While critics point out that the fat content in Russell Stover is often just as high as in regular versions, O'Hara says "people on low-carb diets just aren't concerned with it."
Compared to low-carb, it's been relatively slim pickings in recent years for fat-free and fat-reduced product offerings, Vierhile says. Through August, 12.7 percent of new food and beverage items made fat reduction claims, up slightly from 12.4 percent in 2002 but well below the 25 percent making the claim in the early 1990s. So far, the growth in low-carb products and low-sugar candy products has come without much participation from larger food companies, Vierhile observes. He believes their experiences with low-fat products may account for their reluctance.
"A lot of companies got burned on the fat trend," he says. "Brands like [PepsiCo's Frito-Lay] Wow! and companies like Procter & Gamble went out there with some big propositions and in some cases lost a lot of money. But I think another tier of companies may still jump on the [low-carb] bandwagon, and you're starting to see companies that have gotten hammered by this trend react."
Besides candy, the low-carb trend is making itself felt in beer, where "low carb" is putting a new spin on the light segment. Anheuser-Busch's Michelob Ultra, touted as low-carb, made its way to No. 7 in the premium segment in its first year, prompting Miller Brewing to reposition Miller Lite as "the original low-carb beer."
The Atkins diet and the company it spawned are also shaking up the diet products industry. The once high-flying Slim-Fast brand, whose rapid growth prompted Unilever to acquire the company in 2000, suddenly finds itself fighting a new contestant in the battle for supermarket supremacy.
Sales of Slim-Fast diet drinks and powder fell 13.5 percent to $356.4 million in the 52 weeks ended May 18, according to Information Resources Inc. Much of that decline can be traced to the 2001 Atkins entry into the category, which grew 85 percent to $25 million in the same period.
Cut Carbs, Not Fat
Atkins Nutritionals is assembling a broad line of low-carb products under the famous name.
However, Slim-Fast sales continue ahead of projections made when it was acquired, Howard Green, senior vice president for investor relations, told analysts in a May conference call.
He added that the impact from the Atkins diet and Atkins Nutritionals products only began to be felt significantly in late 2002 and early 2003 , primarily in the U.S. and United Kingdom.
Green said in July that Slim-Fast's recent entries in prepared soups, similar to Campbell Soup Co.'s Soup-to-Go, plus ice cream and low-carb snack bars, should get growth back on track in the second half of 2003. But in an interview published in the Dutch daily Het Financieele Dagblad in late August, Unilever marketing director Anthony Simon was quoted saying that neither he nor Unilever Co-Chairman Antony Burgmans would predict when Slim-Fast may start picking up again.
For its part, Atkins Nutritionals isn't making life easier for Unilever. It has launched entries of its own into ice cream, soups and snack bars on roughly the same timetable as the Unilever launches.
Suddenly, a diet that has fought for two decades for legitimacy is building plenty of clout with retailers and consumers.
Percentage of Candy Products That Are Sugar-Free
2000
6.6%
2001
8.2%
2002
11.7%
2003
15.0%
Source: Marketing Intelligence