George Weston rolls out low-carb bread
Meet the $5.99 loaf of bread.
Sold under the Atkins brand name, the product is aimed at devotees of the popular low-carbohydrate diet.
The company that makes it, George Weston Ltd., is also hoping it will help lift sales as health-conscious consumers shun traditional calorie- and fat-laden foods.
"If it's well received, you'll see some big stuff," Weston chairman and president Galen Weston told analysts in a year-end conference call yesterday.
The company also hopes to eliminate trans fats from its products by the end of the year, he added.
The Toronto-based company, which operates the Loblaw family of supermarkets as well as the bakery business, yesterday reported its slowest quarterly profit gain in two years.
Fourth-quarter profit rose 9.1 per cent to $252 million, or $1.86 a share, as sales climbed 10 per cent to $7.28 billion.
The bakery division accounted for most of the slump as the company took a $35 million charge to cover the cost of closing two bakeries.
Weston bakery sales fell 3 per cent during the quarter, mainly due to the lower value of the dollar in the United States, where the company makes most of its sales. Operating profit fell 36 per cent.
The firm said its bakery division hopes to gain a competitive edge this year by introducing healthier products, which also tend to have higher profit margins.
"The consumer is showing a great interest in healthy whole grains, low sugar and no carbohydrates," said Gary Prince, president of the U.S. bakery division. "There's been a move away from white bread. We applaud that move. It's positive for the industry even though that brand is large."
Atkins bread is just the start. Part of a licensing deal Weston signed with Atkins Nutritionals Inc. last fall, Weston has the North America exclusive rights for many baked goods.
This week, Weston introduced six categories of Entenmann's low-carb snacks and cakes, the company revealed yesterday. Initial U.S. sales have exceeded expectations, the company said, which could lead to more of the products in Canada.
The company said it's also developing a low-carb breakfast muffin under its Thomas brand.
While the value of the deal was not disclosed, an estimated 35 million people have embraced some form of low-carb diet of the type espoused by the late Dr. Robert Atkins. A recent controversy surrounding his excessive weight at the time of his death has apparently not hurt sales.
Referring to another hot topic among health-conscious consumers, Weston said it's working to eliminate trans fats from its foods by the end of this year. There is no trans fat in its bread, but there is some in its cakes and doughnuts, Weston said.
The problem isn't cost, Weston said. "It's a taste issue, getting the right taste, the right substitute. The challenge will be the doughnuts."
For the year, sales at George Weston, including the Loblaw-owned stores, rose 6 per cent to $29.2 billion, while earnings rose 15 per cent to $792 million, or $5.80 per share. The results include the positive impact of a year that included 53 weeks.