Low-carb fad fades, Atkins files for bankruptcy

The low-carb fad has passed, and Atkins has gone the way of other get-thin-quick schemes that have come and gone, like Scarsdale, Beverly Hills, Pritikin and The Zone diets.
At its peak, the Atkins plan was more than a diet, it was a lifestyle. Lured by the prospect of getting skinny while eating steak, Americans turned low-carb eating into the latest runaway diet craze.

But in the end, it was exactly that success that doomed Atkins to a fate like so many other get-thin-quick schemes that have come and gone, such as Scarsdale, Beverly Hills, Pritikin and The Zone.

As Atkins became a cultural phenomenon, hundreds of companies, large and small, swept in to capitalize on the program's huge popularity. They created and marketed far more low-carb products than there were dieters to eat them, including mass-market style versions of pasta, cakes, cookies, bagels and many other foods that had been forbidden on a strict low-carb diet.

Made with sugar substitutes and offering new concepts such as "net carbs," this new, $3 billion-a-year industry was aimed squarely at the age-old pursuit of getting thin while eating whatever you want, which, of course, never works.

Among the biggest promoters was Atkins Nutritionals Inc., founded by Dr. Robert C. Atkins, recognized for popularizing the movement with his best-selling books. The company filed for bankruptcy protection on July 31.

"They made the mistake of thinking that this was the one time that there would be a profound and permanent change in American dietary habits," said Adam Hanft, a brand and marketing consultant, and author of the trend-spotting book Dictionary of the Future.

Manufacturers lured by boom

Some diet experts and nutritionists had predicted that the low-carb fad would pass, but manufacturers wouldn't listen. They were persuaded by the low-carb pitch that carbohydrates are bad because, when digested, they turn into sugar and are stored as fat. Independent retailers and chain stores offering nothing but low-carb products expanded furiously.

Health food manufacturers became low-carb manufacturers and had instant success. Even big, mainstream supermarket chains and food makers rolled out low-carb alternatives to well-known products. There was Atkins Quick Quisine frozen pizza, Carbolite Pancake Mix, Entenmann's Low Carb Crumb Cake.

"The reality is, the people that were buying low carb when it went way up, when this bubble was inflating, were not following an Atkins, ketogenic diet," said Alan Beyda, chief executive of JAMB Business Enterprises Inc. of Pompano Beach, Fla., a national distributor of low-carb and sugar-free foods.

The true Atkins dieter, he said, had to eat less than 20 grams of carbohydrates a day to lose weight, but people increasingly bent those rules as the indulgent products proliferated.

Food consumption surveys conducted last year by market research firm NPD Group Inc. showed that even Americans who ate the fewest carbohydrates ate an average of 128 grams of carbohydrates a day.

"The public was saying, 'Give me something that tastes better, give me something so that I can cheat.' But they still want the same results," Beyda said.

When the diet stopped working, people stopped buying the products. It is exactly what happened in the 1980s when low-fat diets were all the rage, and Snackwell's introduced low-fat cookies. People ate whole boxes of cookies, then moaned that low-fat diets don't work.

Most distributors went bust

Beyda said there were once 15 or 16 national distributors of low-carb products, but "I'm the only one left." His best year was 2003, but by 2004 his business was cut in half. Now, it's one-sixth of what it was at its height.

Today, Atkins' frozen foods are gone from supermarkets and the company no longer touts the "science" behind low-carb diets. The slide was so swift that Atkins, which expanded dramatically with an extensive line of frozen foods, was forced to throw away "millions and millions of dollars" worth of products that didn't sell, precipitating the bankruptcy, said Colette Heimowitz, vice president of education and nutrition information for Atkins Nutritionals.

Now, Atkins is acknowledging that low carb doesn't have much of a commercial future. Going forward, the company will focus instead on a nutritionally balanced line of snack and meal replacement bars and shakes.

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