Atkins diet tastes good to retailers

But plan's popularity is hard for pasta, bread makers to stomach

05/26/2003

By MARIA HALKIAS / The Dallas Morning News

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Millions of Americans have lost an untold amount of weight by sticking to Dr. Robert Atkins' high-protein, low-carbohydrate diet.

Now, food companies and retailers are hoping for similar happy results by focusing on products that fit the Atkins plan. But some of those sales gains are coming at the expense of companies whose foods aren't Atkins-friendly.

The winners include the makers and sellers of meat snacks such as beef jerky, which have few or no carbohydrates. But bread bakers and the makers of the once-trendy high-carb energy bars are feeling the pinch as more and more Americans turn to the Atkins plan.

"Beef jerky sales have gone through the roof, with industry sales up 20 percent on top of 17 percent last year," said Kenneth Fries, category manager for snacks at 7-Eleven Inc. "Meat snack makers are making better product flavors and using better cuts of meat, and making it easier to carry in tubes and in chunks."

Demand is being fueled by recent studies that have rehabilitated the reputation of the Atkins diet, once derided by the medical establishment as too dependent on fatty foods to be of any health benefit.

Two studies published last week actually found that heart health improved in some people who followed low-carbohydrate diets for six months or a year.

Those reports are expected to boost popularity of the Atkins diet, which about 25.4 million people, or 12.7 percent of U.S. adults, say they have tried, according to the National Marketing Institute.

Cashing in

Food industry experts credit the Atkins plan for the rise in U.S. beef consumption since 1999 and the drop in sales of flour-based foods.

Retailers such as Dallas-based 7-Eleven and Eckerd Corp. are ready to cash in.

7-Eleven is stocking new Atkins-approved products and has moved meat snacks such as Slim Jims and Pemmican Beef Jerky to prominent locations, advertising them with 3-foot displays.

And Eckerd, which seldom stocked such products several years ago, is "doing very well" with them now, said Jack F. Morris, Dallas regional operations manager.

Low-carb dieting is changing the beverage aisles, too.

Debbie Wildrich, a 7-Eleven beverage category manager, said industry forecasts predict bottled water sales will outpace soft drink sales sometime in the next five to 10 years.

"People are looking for drinks that don't take on added sugar," Ms. Wildrich said.

Later this summer, the chain expects to begin stocking a low-carb soft drink, she added.

Sales of energy and meal replacement bars also are flat or down, but high-protein and low-carb bars are doing "extremely well," Mr. Fries said.

"I don't see these trends stopping in 2003 or 2004," he said.

Dr. Atkins, who died last month from head injuries suffered in a fall on an icy Manhattan sidewalk, first popularized the diet 31 years ago.

In 1989, taking advantage of the diet's steady popularity, he founded Atkins Nutritionals Inc. to make and market snacks that fit his diet.

The privately held company, which doesn't reveal sales numbers, distributes 90 to 100 products to retailers, including its Advantage bars and shakes. Last week, it announced its newest product, Atkins Endulge Ice Cream.

A low for carbs

The Atkins boom worries companies that depend on carbohydrates – such as pasta, tortilla and bread makers.

Pasta consumption is still growing, but hardly at the carbo-loading inspired rates of the 1980s, according to American Italian Pasta Co., the largest U.S. pasta maker.

"Our industry would be growing faster if not for the Atkins diet," said Tim Webster, president and chief executive of the company, based in Kansas City, Mo. "I've seen no other diet's effect be as substantial."

The Tortilla Industry Association addressed the threat head-on this month in a seminar titled: "An Industry in Crisis: The High-protein, Low-carb Diet and Its Effects on the Tortilla Industry."

Wheat flour consumption started dropping after 1997, when U.S. consumption hit a peak of 147 pounds per person. Last year, that figure fell to 139 pounds, said Judi Adams, president of the Wheat Foods Council in Parker, Colo.

"I like to equate what's happened to the industry to the book The Perfect Storm," she said. "Everything is hitting the industry all at one time."

Milling & Baking News executive editor Josh Sosland also used a nature metaphor to sum up the flour industry's problem. It "is in the middle of a hurricane right now," he said.

The industry is responding with low-sugar breads and low-carb pastas, but that's not the answer, Mr. Sosland said.

"When you look at headlines, it's horrifying for the industry," he said. "People are saying horrible things about refined flour. At the last meeting of the American Bakers Association, the industry committed to educating consumers. They've decided they're going to fight back."

The bread industry needs to remind people "it's making the staff of life, feeding Americans folic acid and doing more to prevent birth defects than the March of Dimes," Mr. Sosland added. "The industry knows it's making a wholesome product. It's frustrating."

Beefing up

The beef industry, on the other hand, is celebrating.

After declining steadily in the 1980s and much of the '90s, the industry saw consecutive quarters of increased demand during the last half of 1998. Beef sales have gone up for 12 of the last 14 quarters.

U.S. per capita consumption of beef in 2002 was 64.4 pounds, up from 62.9 pounds in 2001.

"Attention on high-protein diets has prompted the consumer to discover, or rediscover, the health benefits of protein," said Shalene McNeill, senior manager of nutrition communication at the Texas Beef Council, which represents 140,000 Texas cattle producers.

Richard Wortham, the council's executive vice president, said beef sales have been aided by "an industrywide focus to tell our science-based nutrition story" and the introduction of more convenient beef products.

E-mail mhalkias~dallasnews.com