The latest fad craze that overtook America seems to be finally at an end. First there was the pet rock, then there was retro-70's and now you can add to that lame pantheon the low-carb diet. In a brilliant marketing ploy Atkins and its famous logo managed to con its way onto so many products racking up a huge amount of revenue simply off of licensing the logo to quick start low-carb items that companies cranked out. Americans went nuts ridiculously abandoning bread and requiring their burgers to be wrapped in lettuce.
I've been skeptical of this since the beginning and if you can't tell by the paragraph above I always saw it as a simple marketing gimmick to make a huge amount of profit before everyone figured out it was just a ridiculous con. After the low fat craze in the 90's and low fat being slapped on everything one company figured out that if they could have trademarked "low fat" and had a logo they would have made a killing. After Dr. Atkins died it seems that the Atkins company managed to do just that and started a nationwide fad and made a killing by licensing it's logo to everything giving any product an instant pseudo legitimacy via an the simple "A" logo.
Now the New York Times is reporting that that low-carb diet boom seems to be on the wane. So all you obese people sitting on a couch hoping for the magic bullet to make you skinny without exercise, moving or having to modify your six meals a day, you've once again been hoodwinked.
New York Times (Need a registration login and password? Visit Bug Me Not)
Last July, executives of the American Italian Pasta Company decamped at the Atkins Nutritionals office in midtown Manhattan, determined to cook up a new blockbuster product. They spent several days hammering out a deal to put the Atkins name on a line of low-carbohydrate, soy-based pasta.
It was the latest food group to be Atkinized. The two companies seemed certain that soy pasta, with 5 to 10 grams per serving of what manufacturers call "net carbs," would be a hit. Regular pasta contains up to 45 grams of carbohydrates, so the new product would offer a great way for people on Atkins and other low-carb regiments to indulge - free of guilt - in fettuccine Alfredo and baked ziti. Atkins allotted $15 million for a campaign to announce the introduction.
Today, boxes of the stuff are gathering dust in warehouses ... A month ago, American Italian said that it didn't ship any soy pasta in the previous quarter and that sales of its own line of reduced-carbohydrate pasta were 50 percent below projections. The company's stock plunged 23 percent on the news.
According to the NPD Group, a research firm, the percentage of Americans who followed low-carb diets like Atkins, South Beach or the Zone fell to 4.6 percent in September from 9 percent in January.
As a pioneer of all things low-carb, Atkins Nutritionals is taking some of the biggest financial hits. Formed in 1989 to sell products based on the diet philosophy of Dr. Robert C. Atkins, the business ramped up quickly after news articles ignited interest in low-carb eating. Atkins licenses its name to companies like Entenmann's and CoolBrands but also sells its own baked goods, snack products and frozen goods.
Yet in the last six months, after two years of rapid growth, sales of Atkins products plunged 32 percent, according to Information Resources Inc. ... In May, the company had to write off $53 million of unsold and expired food, leading to a loss of more than $58 million for the second quarter and sending the company into financial turmoil, according to a Standard & Poor's report.
Over the last year, according to S.& P. estimates, revenue has fallen, from $87 million in January to $51 million in May and $29 million in August.
To trim costs they laid off 40% of their workforce in September. The sad thing about all of these fads is that people get sucked into them and in the end the only ones that profit are the executives. Snake oil sales is a hard business to predict.
The companies that shifted products to low-carb and have huge inventories are also being bitten hard by this.
Mr. Bey at Keto Foods says he wishes that he would have stuck to what he knows best: selling specialty products at health food stores to resolute low-carb dieters. In early 2003, the company, which is privately held, envisioned big prospects outside its niche. It expanded its product line and went into large supermarkets.
"If I could do it over again I would have stayed a cottage industry and not assumed supermarkets were the answer," said Mr. Bey. "But it was a low-carb gold rush, and like everyone else, we got swept up in it."
Even previous people that have worked with Dr. Atkins are now coming out of the shadows to slam the low-carb craze as the sham that it is.
Many experts say the main flaw of the low-carb diet is that, unlike low-fat and oat-bran products, low-carb offerings aren't very effective at helping people lose weight and eat healthier. "How can you feed fake muffins, brownies and pancakes to people who are trying to lose weight and expect it to work?" asked Dr. Stuart Fischer, a protégé of Dr. Atkins who worked for nine years as associate medical director of the former Atkins Center for Complementary Medicine. "No one in the history of man has ever been able to lose weight eating anything like those foods or any substitute for them," said Dr. Fischer, who now runs his own nutrition practice in Manhattan.
It's not all Dr. Atkins fault. Most of this was done after his death. The article even goes on to explain that "since Dr. Atkins's death, the company has more than tripled the number of products bearing its name, to 175 from 50." Most of these being snacks and other things that Dr. Atkins never would have approved of. For instance chocolate cake with low-carb and the Atkins symbol.
Tipped by: Ace of Spades