The Multi-million Dollar Question: What’s Your Low-carb Strategy?

Sep 02, 2004
George Anderson

By George Anderson

A new report from Information Resources Inc. (IRI) says it is too early to write-off low-carb dieting as just another fad.

According to IRI, low-carb foods can be viewed in three categories:

  1. Naturally low-carb food and beverages such as eggs, meat and water

  2. Reduced-carb brands from specialty manufacturers such as Atkins

  3. Reduced-carb brands from leading food/beverage manufacturers

Sales of naturally low-carb foods and beverages remain strong with sales outpacing the store average for products in these categories. For the 52 weeks ending 6/13/04, IRI reports sales of naturally low-carb product categories were up 5.8 percent versus 1.7 percent for total food and beverages.

Low-carb brands now represent one percent of total food and beverage sales at retail. IRI attributes this growth to hundreds of new product introductions. Brand families from specialty manufacturers such as Atkins, Keto, and CarboRite, have seen sales increase dramatically over the past year (181 percent) as a result of new product rollouts.

Major manufacturers have been later to the low-carb arena but appear to be having some success, taking share from those who were first to market.

IRI’s research concludes consumers are using naturally low-carb products and branded items in different ways depending on the meal occasions. Naturally low-carb products have seen the greatest growth in beverage, dinner and breakfast items, while nearly 80 percent of low-carb brand growth came from snack meals, sweetened snacks and desserts.

Moderator’s Comment: What do you see as the biggest opportunities/challenges to the low-carb dieting movement? With all the conflicting reports on how
well (or not) low-carb product sales are going, how should retailers approach the category?

Perhaps the biggest impediment to low-carb sales taking off is cost. In a piece written for ACNielsen’s (a RetailWire sponsor) Consumer Insights
magazine, Low Carb, High Cost: Too Expensive For Those Who Need it Most?, Phil Lempert wrote that strictly following the South Beach or Atkins diet plan would cost a consumer
between $91.28 and $99.89 per week. The average single person spends approximately $59 a week on groceries, according to the Food Marketing Institute (FMI).

George Anderson – Moderator

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