Re: Low carb fad losing gas

From: tcomeau (tunderbar_at_hotmail.com)
Date: 08/31/04 

Date: 31 Aug 2004 12:41:38 -0700

It was only a matter of time before it became clear that people will
balk at paying a premium for inferior tasting manufactured crap even
if the label says low-carb. The manufacturers over estimated the need
for these kinds of products and the level of gullibility of the
low-carb market.

Why eat tasteless manufactured crap when you can eat filet mignon?
Literally.

TC

markd@toad-net.com wrote in message news:<41347f97$0$21383$4d5ecec7@reader.city-net.com>...
> Lean times for low-carb sellers
>
> By KAREN ROBINSON-JACOBS
> THE DALLAS MORNING NEWS
> DALLAS - After taking the nation's waistlines by storm, the low-carb
> juggernaut appears to be loosening its beefy grip.
>
> Product sales, mainly at smaller specialty retailers, have slumped.
> Many low-carb dabblers have defected. And in a bit of dietary
> Darwinism, some makers and retailers of products aimed at what seemed
> like an endless sea of low-carbers now find themselves in lean times.
>
> "Sales have waned," said Lora Ruffner, who co-owns Low Carb Luxury, a
> Web site and magazine. "We've begun to see the small merchants
> struggle. There is a shake out going on."
>
> Theories abound on why the air leaked from the low-carb balloon.
>
> Some say an influx of products from major manufacturers flooded what
> had been a niche market. American consumers can be notoriously fickle.
> Many low-carb products simply don't taste good.
>
> Even long-time carbers find it hard to argue with the recent barrage
> of downward barometers. The number of U.S. adults on a low-carb diet
> fell to 10 percent in the three months ended June 30, off from a peak
> of 12 percent in the first quarter of the year, according to Morgan
> Stanley's equity research group.
>
> Another study from market researcher NPD Group Inc. shows the
> percentage of adults on a low-carb diet dropping from a peak of 9.1
> percent in January and February to 6.2 percent by April. By early
> July, the firm said, the percentage rose slightly to 7.3 percent.
>
> Among the erstwhile adherents is Ronnie Ramirez, a North Dallas
> resident who found the diet too inconvenient when he needed to grab
> something from a fast-food drive-through lane.
>
> "Most of them don't offer low-carb products," said Ramirez, 39, who
> lost nearly 30 pounds while on a low-carb diet from January through
> May.
>
> Also, he said, feelings of deprivation started setting in.
>
> "I wanted pasta," he said. "I wanted chicken fried steak now and again
> - with gravy."
>
> To be sure, millions of Americans remain enthralled with the results
> of diets such as Atkins and South Beach. The Natural Marketing
> Institute said in July that based on its research, "the low carb
> movement is here to stay."
>
> By one estimate, there are still at least 15 million "hard core" low
> carbers. Millions more are trying to limit their carbohydrate intake,
> but aren't fully committed to a special diet. Others are switching to
> low-carb products to combat diabetes and other illnesses.
>
> About $1.3 billion in low-carb branded products were sold in U.S.
> supermarkets and mass merchandisers in the 52 weeks ended July 10,
> research firm ACNielsen says. (The data doesn't include sales at
> Wal-Mart.)
>
> But even though that sales figure represents a dramatic 283 percent
> increase over the prior year, the ACNielsen data also shows the growth
> rate for "carb conscious" foods isn't climbing as quickly.
>
> "It's passed peaked," said Dean Rotbart, executive editor of
> LowCarBiz.com, a Web site that follows the industry. He started
> noticing a fall-off in March.
>
> "Much of the industry is already in the valley. Many, many of the
> manufacturers I'm talking to are telling me that sales are less than
> 50 percent of what they were in January and February," he said.
>
> "I have one manufacturer in just one line of packaged baking mixes,
> and he has more than $1 million in unsold inventory," Rotbart said.
>
> The big change, many smaller retailers and manufacturers said, is the
> arrival into the marketplace of "the big boys."
>
> An estimated 1,863 low-carb products have been introduced so far this
> year, said Tom Vierhile, executive director of Marketing Intelligence
> Service Ltd.'s Productscan Online.
>
> Smaller firms make most of those products. But a rapidly increasing
> portion of the portfolio comes from the likes of Dean Foods Co.,
> PepsiCo's Frito-Lay unit and Unilever NV, which introduced products
> such as low-carb ice cream and tortilla chips in the spring and early
> summer.
>
> Most of their goods went straight to the shelves of mainstream grocery
> stores and mass merchandisers, bypassing specialty outlets that popped
> up to support the low-carb movement.
>
> "The time has come to close the doors in the face of the Wal-Marts,
> Walgreens, local grocery stores and other large retail outlets that
> have started carrying Low Carb Foods!" said a note to consumers at
> lowcarbnexus.com, one of the first and largest online low-carb
> retailers, which recently announced it was going out of business.
>
> With the industry giants now in the game, some smaller players are
> getting out - or trying to. One California-based low-carb merchant
> tried to sell his store on E-Bay and got no takers, even after
> lowering the price.
>
> The Low Carb Store in Flower Mound, Texas, closed in June. One
> low-carb manufacturer said at least two retailers that carry her
> products plan to close soon.
>
> "I don't want to be in every grocery store in the country if it's
> going to mean that the little Ma and Pa stores that supported us in
> the beginning aren't going to have any customers," said Julee Dennis,
> who heads Gram's Gourmet in Pflugerville, Texas, and has seen sales of
> her low-carb snacks fall from $180,000 in January to about $60,000
> today.
>
> Loyalty notwithstanding, she's trying to get her products into
> Walgreens.
>
> Dennis and others feel that some of the products being aimed at
> low-carbers have carb-conscious names and marketing approaches, but
> still have more carbohydrates than allowed in most strict low-carb
> diets.
>
> Other products tout having fewer net carbs - the total number of
> carbohydrate grams in a product, minus the carb grams that cause
> little or no increase in your blood-sugar level.
>
> But the net carb figure is usually an estimate, rather than a figure
> determined from scientific testing, said Jon Anfinsen, a principal of
> DNA Dreamfields Co., which developed a low-carb pasta.
>
> Actual net carb count can actually be six times higher than the level
> stated on the packaging, based on tests his firm ran.
>
> Consumers try some of the products under the mistaken impression they
> have fewer carbs, several industry experts said. When those consumers
> don't shed the pounds, they drop the diet.
>
> Unlike claims about "low-fat," the U.S. Food and Drug Administration
> doesn't regulate what's classifies as low-carb and doesn't require
> testing for net carbs.
>
> "This industry needs regulating badly," said Dennis, adding that if it
> guidelines are eventually established, "a whole lot of companies are
> going to have to reformulate, or re-label.
>
> Some in the industry speculate that many of the major manufacturers,
> especially those with carb-laden marquee products, would be just as
> happy to see the low-carb movement die.
>
> "They put the money into low-carb not to be market leaders, but to
> defend their sugar-based carb franchise," Rotbart said.
>
>
> (Published: August 29, 2004)

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