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Friday, March 26, 2004

Food industry responds to dieters



By J.M. Hirsch
The Associated Press

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 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 have they 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. On average, 10 new items are added each week.

And though widely available at most grocers, those products are headlined at some 400 low-carb stores in 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.

$30 billion in revenues

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 healthful 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.

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.

Created challenges

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.




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