With low-carb sales stalled, a great shakedown is under way in the market, writes functional foods developer Saul Katz. Since diabetes, obesity and heart disease remain at the forefront of consumers? minds, who will win, who will lose and where will the race go next?
One thing is certain: the low-carb revolution embraced by millions of Americans and popularised by a household-name diet has raised carbohydrate awareness and is still evolving. In fact, the low-carb craze is the stuff that moves society forward.
It has sparked an emotional debate because of its relationship to the serious concerns of obesity, diabetes and heart disease. It has galvanised opposition that polarised camps and set off the diet wars. It has generated controversy that mesmerised the media, tantalized industry, raised consumer awareness, spurred research and caused re-regulation. In short, it has been both popular and controversial.
Low carb is not an all-or-nothing proposition but rather part of the continuum of nutritional science — in particular it has advanced our knowledge of carbohydrates. The Atkins diet was without question a tipping point; Dr Atkins was the revolutionary who got us thinking differently.
But now there?s speculation about what?s next. Low-carb sales stalled last year, catching the food industry by surprise and forcing manufacturers to retrench. Today, a low-carb shakedown is in progress, which will result in some companies withdrawing from the category while others change their strategies. As a legacy of the low-carb evolution, many new products will sport reduced carbs, albeit coupled with conservative nutritional strategies that are grabbing consumer attention (eg, whole grains, good fats, high fibre, low calories and the glycaemic index).
Low-carb numbers plunge
The growing incidence of obesity and diabetes and the promise of rapid weight loss contributed to phenomenal growth in the low-carb category. In response to the demand, many food manufacturers launched low-carb versions of their products or developed new low-carb lines. Retailers responded with expansive, dedicated low-carb sections and promotions.
According to Mintel, during the 2003 diet season, most US retailers were left without low-carb inventory. Not to be caught short again, in 2004 they built up significant low-carb stock positions, just as demand began to weaken. This contributed to reduced sales for low-carb manufacturers and retailers, triggering inventory adjustments and mark-down programmes.
The declining number of low-carb dollar sales underpins this story. The popularity of low-carb diets soared at the beginning of 2004, with 9.1 per cent of Americans adopting such a regime. By April, the brakes had clearly been applied when NPD Group reported virtually none of the 11,000 subjects studied were cutting carbs to the degree recommended, with only one in four cutting carbs significantly. By November 2004, the percentage of Americans on the regime had dropped steeply to 3.6 per cent, according to NPD. The decline was also reflected in product introductions. New product entries trended down from 633 SKUs in June 2004 to 306 in July and 209 in August.
Companies face off
Even though 2005 projections do not mirror the triple-digit growth rates of early 2004, the category is still alive. Rival low-carb and conventional diet companies are engaged in diet wars as they compete for market share. Unfortunately for the low-carb companies, misunderstanding and confusion surrounding low carb is working in favour of the detractors — and competitors. When Atkins brought in a turnaround specialist last September to respond to stiff competition from other low-carb products, cynics heralded the end of Atkins? reign, but the company believes the rumours of its demise have been greatly exaggerated.
Nevertheless, diet companies that suffered during the low-carb peak are watching closely. Weight Watchers International Inc and Jenny Craig Inc are confident of regaining market share in 2005. While Atkins promoted low carb as a lifestyle, dietitians and doctors did not recommend it, and consumers treated it as a diet. Believing that the Atkins diet is unsustainable, both Jenny Craig and Weight Watchers are touting sustainability as core to their programs.
Low carb is still alive in two ways that ensure its place in the weight-loss category. One is hardcore dieters who aren?t bothered by speculation over the long-term negative health consequences of the diet. Another is through the mainstream consumer, who now has a greater awareness of carb counting and is a target for reduced-carb brands in the mass market.
Low-carb discussion has popularized carb-reduction, creating a reduced-carb mindset and lifestyle, which may be the most significant legacy of the low-carb movement. There is also a chance for science, product development and policy to tip the scales.
New studies will fan the carb controversy and keep alive a debate that will likely linger for years due to its complexity and the need for long-term, well-designed studies to weigh the benefit-risk equation. Evidence suggests many people who have tried the diet remain unconvinced by the science. In a survey, Reuters found ?consumers want assurances that the long-term effects of low-carb dieting are positive, and they want to see the medical establishments and nutritionists advocating the diet.?
Reasons for low-carb failure include difficulty sticking to the diet, and products rushed to market with poor taste and texture. We are reminded of the low-fat craze of the early ?90s, when food products were reformulated with fewer grams of fat — but low fat didn?t always mean low calorie. Like many low-fat products, early low-carb entries also turned off consumers, and food scientists had to find ways to put taste back in.
In favour of low carb, the lack of definition that has dogged the category may soon be cleared up. Companies have invented a confusing array of marketing terms to differentiate their products, like ?no carb,? ?low carb,? ?net carb? and ?net impact carbs.? Resolution may come as a result of the much anticipated carbohydrate review by the US Food and Drug Administration.
Evolution of the Revolution
So what is the current evolution of the low-carb market? According to a recent report from Euromonitor International, while Americans have rejected a specific low-carb diet, many consumers have moved away from a traditional carbohydrate-rich diet and changed the way they think about healthy eating.
The majority of 25 manufacturer respondents to a proprietary Science News survey in October 2004 said they planned to focus their 2005 product development and promotions on health and wellness areas like fibre and whole grains — not low carbs.
With recent studies associating whole grains with weight loss, Productscan Online predicted marketers of grain-based products will take advantage of whole grain trends in 2005, giving consumers permission to enjoy grain-based foods once again.
As the science of nutrition advances, we are refining our knowledge about weight management and the role of carbohydrates in successful dieting. Recent declines in the growth curve of low-carb foods — coupled with advances in science-based knowledge — have sparked a new interest in foods and diets that don?t eliminate carbs but replace the concept of ?net? carbs with ?better-for-you? carbs. Thus, one clear way ahead is low-glycaemic nutrition. Because GI is based on a strong and sustainable scientific foundation, it is likely to be central to weight management and personal health strategies for decades.
The glycaemic index was initially developed to help diabetics control their blood sugar levels and is fast becoming an important tool for health-aware and carb-conscious consumers. Following the Australian food industry trend, the leading British supermarket chain Tesco, in association with scientists at Oxford Brookes University, began labelling hundreds of its foods with glycaemic values.
Dr Jennie Brand-Miller of the University of Sydney, Australia and co-author of The Glucose Revolution, leads a growing following of scientists who believe the glycaemic index may be the most fundamental nutritional advance in 25 years. It is also interesting to note that Atkins, in anticipation of the FDA redefining the carbohydrate category, and after investing millions of dollars in promoting the term ?net carbs,? dropped its use in favour of a low-glycaemic ranking of foods it calls the ?Net Atkins Count.?
The faltering low-carb movement offers the food industry pause to re-evaluate. In light of obesity and diabetes statistics, the carbohydrate debate provides an unprecedented opportunity to advance carb science and the development of food products that can help arrest these insidious epidemics. As purveyors of food and information, the food industry has a responsibility to educate consumers about health, as well as provide healthy options. We are either part of the problem or contributors to the solution. The decisions we make daily influence the evolutionary process. It is imperative to make the right decisions in influencing this evolution.