Originally created 03/27/04

Low-carb lifestyle challenges, changes food industry



America's growing appetite for low-carbohydrate foods has left people like Tony Stallone struggling to keep pace with demand.

A vice president at online grocer Peapod, Stallone already offers more than 300 low-carb products featured in a special "aisle" on the company's Web site. But it's not nearly enough.

"We're out there fighting for every case of low-carb yogurt and low-carb tortillas we can get," he said. "The demand has been through the roof."

Low-carb diets have been around for decades, but only in the last few years made it to the mainstream. Yet, in that time they have revolutionized dieting and challenged and changed the entire food industry.

Grocers and restaurants now signpost low-carb offerings. Sales of once forbidden foods such as bacon are booming. And low-carb versions of everything from bread to bagels and tortellini to toothpaste compete for shelf space.

"I've been watching the way people eat for the last 25 years and I'm not sure I've seen anything happen this fast for this many companies," said Harry Balzer, vice president of NPD Group, a Port Washington, N.Y., consumer research firm.

The number of low-carb specialty products has exploded, with roughly 1,200 items on the market now, including margarita mix and tortilla chips. An average of 10 new items are added each week.

And though widely available at most grocers, those products are headlined at some 400 low-carb stores around the country, with two new stores opening weekly. Meanwhile, Amazon.com offers more than 1,900 books for carb-cutters.

Those numbers are good news to Janice Reddington, a stay-at-home mom from Manchester, N.H., who says she recently lost 40 pounds thanks to smores bars, frosted zesty lemon cookies and other new low-carb snacks.

She first tried a low-carb diet two years ago, but inevitably sabotaged her efforts when the munchies struck. At the time she couldn't find carb-conscious versions of her favorite candy bars and other snack foods.

When she tried the diet again four months ago, the market had changed. Now she says she can have her favorite snacks without blowing her diet.

"It has made it so much easier to survive," she said recently while shopping at Low Carb Heaven, a store specializing in such foods. "I know there are alternatives to the oatmeal I like and the bread. And I can go out to restaurants."

America has been through this before, latching onto the latest food to eliminate in the name of good health. In the 1970s it was salt, in the 1980s it was cholesterol, and in the 1990s it was fat. At each turn the food industry responded with products catering to the diet of the moment.

It's just good business to churn out low-salt, low-fat or low-carb cookies, cakes and ice cream for a nation that wants to lose weight but doesn't want to eat less, Balzer said.

"Americans are overweight and they want to lose weight by eating," he said.

Little is known about the long-term effectiveness of low-carb diets, let alone whether they are as healthy a regimen as their advocates claim. Studies are years from answering those questions, but that hasn't slowed the stampede to cut carbs.

More than 17 percent of the nation's households report that at least one person is following a low-carb diet, according to market research firm AC Nielsen. The NPD Group puts it at a more conservative 3.6 percent of adults, or about 10 million people.

No matter how many adherents there are, they have plenty of choices and spend plenty of money.

Laurie Kuntz, chief executive officer for LowCarbiz, a Denver-based weekly online trade newsletter, estimates sales of low-carb products and services will generate $30 billion this year.

Though this has been a boon to makers of specialty products and foods naturally low in carbohydrates, it has created challenges for others, including the bread, potato, pasta and sugar industries. Sales last year of meat snacks were up 16 percent, cheese 3 percent, and frozen meat and seafood 7 percent, but instant rice was down 7 percent and cookies and white bread nearly 3 percent, according to AC Nielsen.

Companies are taking notice. Last month cereal giant General Mills blamed the "Atkins effect" in part for slumping sales. Dr. Robert Atkins' high-profile high-protein diet is credited with igniting the low-carb trend.

Like many companies, General Mills is adding carb-conscious products, including canned soup, high-protein cereal and light soy milk. Heinz is even offering a "one carb" ketchup.

And don't forget the "low-carb" and light beers, now one of the fastest growing segments of the malt beverage industry.

Arne Bey, chief executive officer of Keto Foods, a Tinton Falls, N.J., company that makes low-carb products, said sales rose 280 percent last year. He will add 87 new items this year, including low-carb milk and ice cream.

He does worry that price will hinder continued growth. Like organic foods, low-carb products generally are more expensive than conventional versions. A low-carb candy bar can cost more than four times as much as a standard one.

But Bey thinks most people will see it as an investment in their health and consider it money well spent.

Peapod saw sales of low-carb products increase 133 percent after the company began highlighting them in the special aisle, taking them from 2 percent to 4 percent of the company's total sales, Stallone said.

Labeling makes a difference. Sales of ordinary vegetables deemed low-carb by Atkins shot up over 90 percent after Peapod added them to the carb-conscious aisle.

But Phil Lempert, who analyzes food trends for AC Nielsen, sees the surge of specialty products as unfair to consumers, in part because a lack of labeling regulations allows misleading product claims. The Food and Drug Administration recently announced it will try to clear up some of the confusion by determining just how many carbs qualify a product as low-carb.

Lempert also thinks the product saturation lulls people into thinking that anything is healthy as long as it has only a few grams of carbohydrates. He said a bunless double cheeseburger recently introduced by a restaurant chain is a good example.

"This product had over 1,200 calories, 110 grams of fat, 44 grams of saturated fat. Hello? Yeah, maybe there's only 5 net carbs, but you're eating enough calories for the day and twice as many grams of fat for the day," he said.

Larry Lindner, executive editor of the Tufts University Health & Nutrition Letter, sees problems even with better labels.

Studies show that people with more choices consume more calories, he said. That's one reason why so many people gained weight on low- and no-fat foods during the 1990s.

Eating too many calories interferes with weight loss regardless of their source, Lindner said. If people eat low-carb foods with the same abandon as they did low-fat products, the nation's collective waistline will only continue to grow.

But Lempert does see a good side. He said it's clear consumers are demanding more from food manufacturers, and the interest in "good" carbohydrates (those that are not considered unhealthy by low-carb diets, such as whole grains) likely will result in more balanced foods eventually coming to market.

"We're going through a nutritional correction both in the eyes of consumers and in the brands," he said.



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