Experts say low carb fad over

markd_at_toad-net.com
Date: 12/20/04 

Date: 20 Dec 2004 11:59:54 GMT

Experts say low-carb craze may be over

   By MARGARET STAFFORD, Associated Press Writer

   KANSAS CITY, Mo. (AP) - About a year ago, Dave Champlin and his two
   roommates lived in what their friends at the University of Missouri
   called the House of Fat. At a combined weight of 890 pounds, the three
   decided to try the Atkins diet. By sticking to the low-carb,
   high-protein diet, Champlin lost about 45 pounds and his roommates
   each lost between 50 and 60 pounds.

   Despite being pleased with the results, all three were off the diet by
   this past summer and have gained back some of the weight. Champlin,
   23, and his friends exemplify why many diet and food industry experts
   are declaring the low-carb diet craze over.

   "It just got kind of tiresome," Champlin said. "Eating the same thing
   over and over. It was monotonous."

   A study by NPD Group, an independent marketing information company,
   found that the percentage of American adults on any low-carb diet in
   2004 peaked at 9.1 percent in February and dropped to 4.9 percent by
   early November.

   Further, it said only one of four people surveyed was significantly
   cutting carbs and "virtually none" were reducing carbs as much as the
   diets recommended.

   That means many companies that rode the low-carb wave are either out
   of business or refocusing their strategies.

   One example: MGP Ingredients Inc. of Atchison, Kan., which profited
   from the low-carb trend, earlier this month announced it was cutting
   its fiscal 2005 per-share earnings forecast by more than half - from
   $1.08 to no more than 50 cents.

   The reason is reduced demand for its specialty proteins and starches
   used to reduce carbohydrates in foods. MGP said low-carb demand had
   peaked, and it did not expect it to return to anywhere near the level
   that sparked a 123 percent increase in sales in the third quarter of
   fiscal 2004.

   MGP always expected the low-carb demand to cool, but it happened more
   quickly than anticipated, spokesman Steve Pickman said.

   "We expected at least to continue at its strong level for the next 18
   to 36 months," Pickman said. "We by no means feel low-carb is dead,
   but it's declined to a much lower plateau than we or the industry
   expected."

   While MGP's future is not threatened, many smaller businesses based on
   low-carb products have closed their doors, and larger companies that
   introduced low-carb foods are changing strategies.

   American Italian Pasta, the nation's largest producer of dry pasta,
   reported a net loss of $12.2 million, or 67 cents per share, in the
   second quarter of this year. The company's reduced-carb pasta was a
   flop, with sales 50 percent lower than expected. Chief Executive Tim
   Webster said the company planned to begin marketing it as a
   low-calorie, high-fiber product.

   No one expects low-carb products to disappear. ACNielsen LabelTrends
   reported that sales of products labeled for low-carb lifestyles were
   still growing but had slowed. Sales, in terms of dollars, rose only
   6.1 percent for the 13 weeks ended Sept. 25, compared to the previous
   quarter. That compared with a 105.5 percent increase in the 13 weeks
   that ended March 27.

   That decline is not surprising, even at Atkins Nutritionals Inc., a
   company founded 30 years ago by Dr. Robert C. Atkins to spread the
   low-carb gospel.

   Colette Heimowitz, vice president of education and research, said the
   market became saturated with low-carb products because companies
   joined the "diet wars" in 2004. She said many companies are expected
   to withdraw from the market because of the intense competition for
   dieters.

   Heimowitz said people have been calling the Atkins diet a fad for 30
   years. "It has already stood the test of time," she said. "There is no
   indication that it's going anywhere."

   She predicted people will continue to incorporate it into their
   lifestyle.

   That's true for Champlin, the Missouri student, who said he will
   continue to buy some low-carb products.

   "It did teach me to watch what I eat and drink," he said. "I'm not
   going to go back to how I ate before."

   Others say the decline in low-carb popularity was entirely
   predictable, much like past crazes such as low-fat or liquid diets.

   "It was overhyped from the beginning, a craze that was never a craze,"
   said Bob Goldin, executive vice president of Technomic Inc., a food
   industry research firm. "It was a little bubble that had zero staying
   power. We've been there, done that, many, many times."

   Goldin said companies suffering because they got on the low-carb
   bandwagon have only themselves to blame.

   "Everyone's always looking for the silver bullet, a magic diet or a
   magic pill," he said. "The whole industry needs to look at nutrition
   from a holistic standpoint. A lot of things go into healthy living,
   and they shouldn't look for one thing to make their fame and fortune."

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