Atkins Nutritionals, the company that led the Atkins revolution in the UK, rose from industry nobody to market leader in two years.
Few would have predicted its dramatic and swift exit from the UK in March.
That’s not to say there hadn’t been murmurings that for Atkins, and indeed a low-carb diet, the fat lady was clearing her throat.
But with Atkins Nutritionals’ departure, the doomsayers’ predictions for low carb looked to be coming true.
In September last year, a Mintel report concluded that while 13% of consumers had tried the diet, fewer than 3% now follow it.
And although sales of the Atkins Revolution book topped three million in the UK, in many households the book is now gathering dust. Figures from TNS show an 8% rise in wrapped bread consumption [Superpanel 52 w/e February 27, 2005] after a period of slowing sales as a result of Atkins.
And, while the low-carb market in the UK has been valued as worth anything up to £600m, depending on what products are counted, TNS puts the take-home figure at a rather more modest £26m.
However, the main players insist the future of low carb is rosy. Mary Young, marketing director for Retail Brands, which distributes the US brand Carbolite in the UK, says that despite a media backlash, the market has a strong future.
In a recent presentation, Young asked whether low carb was dead or alive. “Articles are beginning to emerge on whether the bubble has burst, but you will struggle to find another category that mimics the growth of low carb. There is still a sizeable opportunity.”
TNS figures show the market is in growth, with the top four categories all seeing year-on-year growth of more than 1,000% and overall market growth at more than double that. Yet it warns that 40% of low-carb dieters have tried other diets, so companies should beware of the transient nature of fad diets.
Yet all companies in the sector are adamant of its continued success. Hannah Sutter, founder of supplier Go Lower, says: “Low carb isn’t dead. People are doing it and just calling it different things.”
James McCoy, senior market analyst at Mintel, is not writing off the diet yet. “Low carb is almost like a religion to some
followers,” he says. “That core group will always be there.”
McCoy says companies must attract the less carb-obsessed consumers if they are to generate growth.
“More products will be made for people cutting back on carbs, not cutting them out. Products positioned as low carb alienate the majority of consumers. But any that make them feel they haven’t had to give up what they wanted are likely to do well.”
This is the premise of Xcarb, which presents low-carb products as more of a lifestyle choice and moves them away from body-building milk shakes and snack bars.
David Marshall, MD of Xcarb, says demand for its products is on the increase, driven by the c-store sector, and it continues to expand its portfolio.
Xcarb produces 44 lines, including ready meals, ice cream, soup, pasta sauces, pizzas and even a mashed
potato. A further 16 products will be launched this summer.
“There is a difference between a diet and a lifestyle,” says Marshall. “Consumers want cereal, sandwiches, hot soup in winter, ice cream in summer, burger buns and so on.
“While chocolate does well, people don’t live off chocolate bars. Products need to be consistent with something you can eat every day. The market will become more competitive with a lot of new entrants.”
Heinz has launched a web site for its Carb Check range of products and Unilever is planning in-store promotions for its Carb Options range.
Nigel Sharp, Waitrose buyer for health and wellbeing, is reviewing the low-carb category, which sits within the health fixture of 20 stores. Low-carb bars were introduced to 70 stores but were withdrawn because of slow sales. Tesco, whose low-carb range consists of 170 products, says the market has a loyal following. But Hamish Renton, head of health and diet, says: “Our consumer research shows that Atkins is waning in popularity.”
One reason for this, suggests Retail Brands’ Young, is the way retailers treat low carb as a category. “Products are found in the slimming aisles, which often doesn’t fit. You don’t walk down the health aisles for a chocolate bar. Retailers need to move out of the slimming aisles and attract more carb-conscious consumers.”
Waitrose stocks around 30 branded low-carb lines, but Sharp expects this to fall, with lines being replaced by low-sugar or low Glycaemic Index products, as sales have not hit expectations. The retailer also has no plans to launch an own-label low-carb range, as Sharp does not believe it has enough credibility. “Low carb as a category will disappear,” he predicts.