Low-carb food sales slow as more consumers turn to balanced diets

Food & Drink Weekly, Nov 8, 2004

The percentage of Americans following diets like Atkins and South Beach dropped to 4.6 percent in September from 9 percent in January, according to research firm the NPD Group. Sales of "The South Beach Diet" book slowed to about 20,000 copies a week in early October, down from around 70,000 a week during what some experts said was the peak of the low-carb diet craze in early March, according to Nielsen BookScan. "The bloom is off the rose," said Bob Goldin, executive vice president of food industry consulting firm Technomic. "It doesn't look like the market has any staying power."

The fall-off in interest has been accompanied by slower sales of products aimed at enhancing low-carb diets. Dollar sales of such foods rose 6.1 percent during the 13 weeks ended Sept. 25, down from double and triple-digit gains in the previous six periods, according to ACNielsen LabelTrends.

NPD vice president Harry Balzer attributed the continued sales growth to consumers' willingness to try new things, but said the challenge is to get them to keep buying products often seen as costing more while not tasting as good as than the original versions. "That's where the problem lies," Balzer said, adding that he did not expect the low-carb trend to last any more than another two years. "We'll see a lot of (food companies) discover that this just isn't selling."

The race by food manufacturers to offer low-carb versions of everything from yogurt to bread has contributed to the problem by creating a glut of those foods. Saturation in the low-carb market has taken the biggest toll on smaller niche players, the most high-profile of them being the company behind the Atkins Diet. Atkins Nutritionals Inc. said in September it hired a turnaround specialist and will cut jobs due to stiff competition from the growing number of low-carb products.