CONSUMER
OBESITY, LOW-CARB DIETS AND THE ATKINS REVOLUTION 2004 - The year of the low carb diet. What next for the industry? By Camilla Palmer
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Camilla Palmer Camilla Palmer is a freelance journalist specialising in the food and drink, marketing and advertising sectors. Camilla was previously news and features reporter for trade magazines The Grocer and Campaign. To contact the author of this report, please email her at
[email protected].
Copyright © 2004 Business Insights Ltd This Management Report is published by Business Insights Ltd. All rights reserved. Reproduction or redistribution of this Management Report in any form for any purpose is expressly prohibited without the prior consent of Business Insights Ltd. The views expressed in this Management Report are those of the publisher, not of Business Insights. Business Insights Ltd accepts no liability for the accuracy or completeness of the information, advice or comment contained in this Management Report nor for any actions taken in reliance thereon. While information, advice or comment is believed to be correct at the time of publication, no responsibility can be accepted by Business Insights Ltd for its completeness or accuracy. Printed and bound in Great Britain by MBA Group Limited, MBA House, Garman Road, London N17 0HW. www.mba-group.com
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Table of Contents Obesity, Low-Carb Diets and the Atkins Revolution 2004 - The year of the low carb diet. What next for the industry?
Executive Summary
14
Introduction
14
Market dynamics and drivers: how have consumers become more obese, yet more obsessed with one diet than ever?
15
Getting inside Atkins
16
Who or what is driving growth in low-carbohydrate foods?
17
New product development: a lesson in innovation and caution
18
Potential problems of low-carbohydrate development: growth or extinction?
19
Coping with competition: how are rival slimming foods coping with the low-carbohydrate diet?
19
Industry opinion and consumer research
20
Chapter 1
Introduction
24
Summary
24
Low-carb diets are rooted in history Low-carb consumers date back to 1863 Enter, Dr Robert Atkins Getting to grips with the ‘science’ behind the Atkins diet Exploring other low-carb diets
24 24 25 26 27
Obesity – this century’s massive problem Why now? The appeal of low-carbohydrate diets Opportunities for brands’ image revival Ignoring the impact of Atkins and low-carbohydrate choice is not an option
28 30 32 32
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Chapter 2
Market Dynamics and Drivers: How Have Consumers Become More Obese, Yet More Obsessed with One Diet than Ever?
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Summary
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Obesity – a global issue Defining obesity The British perspective Tackling obesity – the role of government, manufacturers and retailers Manufacturers Cadbury’s Get Active America on the Move “Fat tax” Government questioning Criticism against advertisers in the UK
36 37 37 39 40 40 40 41 42 42
The future Portion size and labelling The portion and value relationship Increased calorie consumption – and more carbohydrates than ever before Managing consumer expectations When did low-carbohydrate diets become popular in the U.S. and why? Celebrity endorsement Combating Atkins – how are foods forbidden on the Atkins Diet protecting their market share? Potatoes Bakery products Fruit juice Pasta Foods benefiting from the Atkins craze
44 44 46 46 47 47 47 48 48 49 50 50 51
Case study: How “I’m lovin’ it” is helping McDonalds stay on top
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Conclusions
56
Chapter 3
Getting Inside Atkins
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Summary
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Company profile and history 2004 and beyond The Atkins Lifestyle Food Guide Pyramid ™ What is the Atkins diet? Stage one – Induction Stage two – Ongoing weight loss Stage three – Pre-maintenance
59 61 62 63 63 64 64
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Stage four – Lifetime maintenance An innovative company Product innovation The U.S. market
65 65 66 66
Atkins Direct Atkins delivered to your home Atkins and partners The flip side of co-branded relations Focus on the UK market Manufacturing Marketing Distribution Multiple activity and Atkins Sainsbury's Tesco Safeway (Morrisons) Somerfield Waitrose Marks and Spencer Superdrug Holland & Barrett Atkins products currently available in the UK Supplements
66 67 68 69 69 70 71 71 72 72 73 73 73 73 74 74 74 75 75
Case study: route to market - Atkins Advantage Bar
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What the future holds in store for Atkins
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Chapter 4
Who or What is Driving Growth in the Low-Carbohydrate Sector?
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Summary
80
Regions in low-carbohydrate food growth Learning from the U.S. – the state of the market New product development Number of products introduced specifically marketed as low-carb Number of products making low-fat, no-fat or reduced-fat claims
80 80 81 82 82
Who are carbohydrate-conscious consumers? Where do they live? Low-carbohydrate food manufacturers: identifying the main players
83 84 85
Focus on Keto
87
Focus on Carbolite
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UK distribution Retail activity in the U.S. – path to growth for low-carbohydrate food and drink Multiple retailers The Internet
90 90 91 92
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Vending machines Foodservice
93 94
Manufacturer activity
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Case study: Wal-Mart
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Case study: How PepsiCo has embraced the low-carbohydrate revolution Pepsi Edge
96 96
Global low-carbohydrate market – territories for future development? Australia Europe Germany Italy
98 98 99 99 100
Chapter 5
New Product Development: A Lesson in Innovation and Caution 102
Summary
102
The depth and pitfalls of the potential low-carbohydrate food sector The crucial factors of taste and formulation Re-packaging/labelling protein-rich products Snacks Chocolate Savoury snacks Doritos Edge Other savoury snacks Meat-based Soy-based Ready meals and prepared foods Ambient meals Home delivery Functional foods Sauces and condiments Pasta Bread, baked goods and cereals
103 103 104 105 105 106 107 108 108 109 110 111 111 111 112 114 115
Case study: Nimble Carbs So Low Dairy and desserts Ice cream Drinks Soft carbonates and still beverages Alcoholic beverages
117 119 119 121 121 124
UK case study: Michelob Ultra Assessing the U.S. market before launching products elsewhere The UK market
125 125 126
Ingredients
128
Foodservice
129
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Case study: Benjy’s
Chapter 6
131
Potential Problems of LowCarbohydrate Development: Growth or Extinction?
134
Summary
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Is there a solution to the global obesity epidemic? Research highlights Remembering that U.S. and European consumers are different UK consumers – what do they really think of low-carbohydrate diets? How to encourage more consumers to buy into the low-carbohydrate dieting ethos Coping with adverse coverage from a sceptical press Earning consumer confidence through product safety Performance is everything – the route of NPD in the UK and lessons to be learnt in Europe Getting the price right
134 135 137 137
Chapter 7
Coping with Competition: How are Rival Slimming Products Coping with the LowCarbohydrate Diet?
138 139 140 140 141
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Summary
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Slim-Fast and Unilever’s “Path to Growth” Falling sales Revamping Slim-Fast Embracing low-carbohydrate in the U.S.
144 145 145 146
WeightWatchers
147 147 148 148 150
Growth pattern shows slump Evolving formats for changing consumers Tackling and conceding consumers’ appetite for low-carbohydrate products Product innovation
Chapter 8
Industry Opinion and Consumer Research
Summary
152 152
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Introduction What is the level of knowledge within your company about the lowcarbohydrate food sector? Do you view the low-carbohydrate sector as an opportunity, or a threat? Does your company already manufacture a product that is marketed or sold as low-carbohydrate? Do you think low-carbohydrate consumption is a “fad” that will impact the food and drinks industry in the short term, or is it here to stay for the longer term? Which categories do you think have been most influenced by the lowcarbohydrate diet phenomena? How important is it for UK retailers to accept products marketed as lowcarbohydrate in-store before the market opens up significantly? How significant are U.S. companies such as Atkins Nutritionals and Carbolite in the development of the low-carbohydrate sector in the UK?
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Tackling the issue of obesity How important do you, within the industry, consider the following factors to be in the controversial debate on rising levels of obesity? How important do you, as a consumer, consider the following factors to be in the controversial debate on rising levels of obesity? Nutritionally poor school meals and a lack of traditional mealtime occasions must take part of the blame Do you think the food industry should be held responsible for the rising levels of obesity in children?
162
Consumer behaviour – survey findings UK consumers think low-carbohydrate diets could be a short-term fad Have you been on a diet in the past 12 months? Are you currently on a diet or healthy eating plan? If you are currently on a diet, please tell us how long you have been on this diet Which of the following diets have you tried in the past? Over the last six months, how often have you exercised, on average, per week (20 minutes per session)? Do you think low-carbohydrate eating is a “fad” that will impact the food and drinks industry in the short term, or is it here to stay for the long term? Have you purchased any products from the following companies/brands in the past 12 months?
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Chapter 9
155 155 156
157 158 161 161
163 164 165 165
166 167 167 167 169 169 170
2004 - The Year of the Low Carb Diet. What Next for the Industry? 174
Update to report – November 2004
174
General overview
174
Who or what is driving growth in low-carbohydrate foods? Medical science
176 176
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Glycaemic Index Further research Multinational investment and interest Continuing innovation from smaller companies and the Internet Consumer demand Retailer activity in the UK – moving forward steadily Tesco Asda Marks and Spencer Boots Sainsbury’s Morrison’s Waitrose
176 177 177 178 178 178 178 178 179 179 179 179 179
Problems with future development
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New product development update Nestlé – low-carb Rolo and Kit-Kat Unilever Carb Options – pastas, sauces, soups and condiments Xcarb - ready meals Carbolite and Hazlewood Foods – sandwich range Duerrs – low-carbohydrate jams and spreads Kraft Hovis
181 182 183 184 185 185 186 187
Special appendix – low-carbohydrate alcoholic beverages in the United States
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Industry opinion update – end of 2004 What is the level of knowledge within your company of the low-carbohydrate food sector? Which categories do you think have been most influenced by the lowcarbohydrate diet phenomenon? Do you view the low-carbohydrate sector as an opportunity or a threat? Do you think low-carbohydrate consumption is a “fad” that will impact the food and drinks industry in the short term, or is it here to stay for the long term? Do you think the majority of UK and European food companies are taking low-carbohydrate food opportunities seriously? How significant at US companies such as Atkins Nutritionals and Carbolite in the development of the low-carbohydrate sector in the UK? How important is it for UK retailers to accept low-carbohydrate products instore before the market opens up significantly? Does your company already manufacture a product that is marketed and sold as low-carbohydrate? How significant for the future potential of the low-carbohydrate market is it that companies such as Unilever and Heinz have launched low-carbohydrate options? Which of the following do you think will drive further growth in the lowcarbohydrate sector? Have you ever been on a low-carb diet?
189 190 191 192
192 193 193 194 195
196 196 197
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Chapter 10
Glossary and Terms
Index
200 205
List of Figures Figure 3.1: Figure 5.2: Figure 5.3: Figure 5.4: Figure 5.5: Figure 8.6: Figure 8.7: Figure 8.8: Figure 8.9: Figure 8.10: Figure 8.11: Figure 8.12: Figure 8.13: Figure 8.14: Figure 8.15: Figure 8.16: Figure 8.17: Figure 9.18: Figure 9.19: Figure 9.20:
The Atkins Lifestyle Food Guide Pyramid ™ 62 Doritos Edge 107 Nimble 117 Yoplait Ultra 121 Michelob Ultra 126 How well perceived is the low-carbohydrate food sector within the industry? 155 Is the low-carbohydrate diet regarded as a threat or an opportunity? 156 How many companies are manufacturing products marketed or sold as lowcarbohydrate or are planning to launch products in the future? 157 Short-term “fad” or long-term trend: an industry perspective? 158 Which categories do you think have been most influenced by the low-carbohydrate diet phenomena now and in thee years’ time? 160 Which categories do you think have been most influenced by the low-carbohydrate diet phenomena now and in thee years’ time? (Continued) 161 How important do you, within the industry, consider the following factors to be in the controversial debate on rising levels of obesity? 163 Age ranking in consumer survey 166 How long is the typical diet? 167 What are the most popular diets? 168 Is exercise as important as dieting to consumers? How often do consumers exercise per week? 169 Short-term “fad” or long-term trend: a consumer perspective? 170 Low carb confectionery 183 Duerrs – low-carbohydrate jams and spreads 186 Hovis’ low carb offering 187
List of Tables Table 4.1: Table 4.2: Table 8.3: Table 8.4: Table 8.5:
Number of products introduced specifically marketed as low-carb -% of all NPD 82 Number of products making low-fat, no-fat or reduced-fat claims 83 Which categories do you think have been most influenced by the low-carbohydrate diet phenomena now and in thee years’ time? 159 How important do you, within the industry, consider the following factors to be in the controversial debate on rising levels of obesity? 163 How important do you, as a consumer, consider the following factors to be in the controversial debate on rising levels of obesity? 164
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Table 8.6: Table 9.7: Table 9.8: Table 9.9: Table 9.10: Table 9.11: Table 9.12: Table 9.13: Table 9.14: Table 9.15: Table 9.16: Table 9.17:
Have you purchased any products from the following companies/brands in the past 12 months? 170 What is the level of knowledge within your company about the low-carbohydrate food sector? 191 Which categories do you think have been most influenced by the low carbohydrate diet? 192 Do you view the low-carbohydrate sector as an opportunity or a threat? 192 Do you think low-carbohydrate eating is a “fad” that will impact the food and drinks industry in the short-term or is it here to stay for the longer term? 193 Do you think the majority of UK and European food companies are taking lowcarbohydrate food opportunities seriously? 193 How significant are U.S. companies such as Atkins Nutritionals and Carbolite in the development of the low-carbohydrate market in the UK? 194 How important is it for UK retailers to accept low-carbohydrate products in-store before the market opens up significantly? 194 Does your company already manufacture a product, which is marketed and sold as low-carbohydrate? 195 How significant for the future potential of the low carb market is it that companies such as Unilever and Heinz have launched carb products? 196 Which of the following do you think will drive further growth in the low-carbohydrate sector? 197 Have you ever been on a low-carb diet? 197
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Executive Summary
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Executive Summary Introduction Taking a look at the history of low-carbohydrate dieting, this report addresses the fact that the Atkins diet was not the first to advocate restricting carbohydrate intake for effective weight loss yet has undoubtedly been the most influential. The Introductory chapter examines the plethora of other diets working along a similar basis, putting their success into the context of the global obesity problem. Dr Atkins’ New Diet Revolution has been read by 50 million people, sold 25 million copies and has topped the U.S. best-sellers list for five years. Debate has raged and intensified in the past few months as the UK public grapples with its ever-increasing girth. The prevalence of obesity has increased by about 10% to 40% in the majority of European countries over the last 10 years. A diet which encourages the consumption of tasty, fatty foods and makes good use of marketing, celebrity endorsement and the establishment of a dedicated company to distribute branded products have all helped Atkins, and low-carbohydrate dieting in general, to gain momentum. Just as low-fat foods were limited to a few product categories 20 years ago, the prevalence of “lighter” options now available in every sector has built and strengthened existing brands and established new ones.
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Market dynamics and drivers: how have consumers become more obese, yet more obsessed with one diet than ever? Examining the context in which Atkins and low-carbohydrate diets are now thriving, this chapter analyses how much obesity is costing the food and drinks industry, both in health and economic terms. The section also considers the role of manufacturers, retailers, government and pressure groups in the UK in providing a way forward – from educational schemes, via manufactures’ promotional initiatives and advertising through to government policy and consumer group campaigning. Looking to the United States, the chapter asks why Dr Atkins New Diet Revolution has captured consumers so effectively. Defining obesity is imperative. It is a chronic, multi-factorial disorder characterised by excessive body fat. Using the Body Mass Index, which is the weight in kilograms divided by the square of the height in metres (kg/m2), is now the accepted way of measuring obesity. In the U.S., America on the Move, a nationwide initiative to encourage the public to eat more healthily and take up more exercise, has corporate affiliates such as PepsiCo. In the UK, Tesco has introduced specialist labelling for consumers wanting to check the level of carbohydrates in a variety of private label products. It is the only UK supermarket to have taken this step so far, but this is unlikely to remain the case for long. Alongside Atkins Nutritionals there are a wide variety of smaller players catering for low-carbohydrate dieters. Keto and Carbolite are the company’s two main competitors, making a variety of foods and supplements, including bread and baked goods mixes – normally products taboo to low-carbohydrate dieters. To combat the growth in popularity of low-carbohydrate diets, bread, potato, cereals and other food and drinks manufacturers are ramping up their promotions in a bid to encourage consumers to buy more of them (or at least continue to buy some of them). 15
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Getting inside Atkins Atkins Nutritionals, the company founded by Dr Atkins, is a key player in the emerging low-carbohydrate food market. From its early days as a cardiology clinic, the company now encompasses a research centre, a publishing firm and a marketing and manufacturing arm for its range of low-carbohydrate foods. This chapter analyses the company’s growth, tactics and aspirations for the future. Eating a low-carbohydrate diet is not designed to be a short-term solution to weight loss. The opportunities for tapping into the growing number of consumers who have chosen to permanently stick with a low-carbohydrate diet are enormous, with virtually every category ripe for development. Atkins markets low-carbohydrate food products in most sectors, including bread and pasta, condiments and sauces, ready meals and starters, snacks, meal bars, drinks and syrups and breakfast cereals. The Atkins Direct catalogue has been instrumental in growing brand awareness early on when the distribution and range of the products was less widespread than today. Themed restaurant chain TGI Fridays and sandwich company Subway were the company’s first partners in the United States. Atkins Nutritionals recruited media doctor Dr Sarah Brewer to become its spokesperson in April 2004 in a bid to present the diet to UK consumers in a way in which they could relate. Dr Brewer, a well-known commentator on nutrition and diabetes, now represents the diet in the media, but does not endorse the Atkinsbranded products.
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Who or what is driving growth in low-carbohydrate foods? Alongside Atkins Nutritionals, the main players and brands in the burgeoning lowcarbohydrate food sector are introduced in the United States. From specialist to mainstream, retailer activity is tracked to assess the importance of the Internet in the growth of the sector, and offer insight on the companies shaping it. According to Atkins Nutritionals, an estimated 50 million Americans have either tried or are following a low-carbohydrate diet. 3.4% of all new foods and beverages introduced to the U.S. market in 2003 were designed to be marketed as low-carbohydrate products. Atkins International is validating the marketplace through large research and NPD budgets and licensing, paving the way for big players such as Heinz, with its OneCarb ketchup and Unilever, with its Carb Options range of branded food products, to break into the market. The mass stocking of low-carbohydrate products has been largely down to consumer demand rather than instigated by the manufacturers, and retailers’ backing of lowcarbohydrate foods has occurred by witnessing the take-off of diets amongst their customer base. Wal-Mart, the word’s biggest retailer with 1.5 million employees, is a crucial distribution channel for low-carbohydrate foods as its influence on consumers’ shopping behaviour is unrivalled.
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New product development: a lesson in innovation and caution This chapter offers an in-depth round up of product launches, primarily in the United States, in a wide variety of sectors. It analyses the potential pitfalls of rushing to market, assessing the importance of taste and ingredient replacement on NPD. Currently in the United States there are no Food and Drug Administration (FDA) regulations on the manufacture and marketing of low-carbohydrate foods, leading to fears that product quality and integrity may be compromised. Hershey’s, a mainstay brand in the United States, has developed 1gram, a range of low-carbohydrate chocolate alongside its American Diabetes Association-approved range of sugar-free chocolate. Calling for low-carbohydrate snacks in the U.S. has seen an upsurge in sales of an unexpected savoury snack favourite - pork rind. Home delivery of fresh-prepared meals is a sector, which is experiencing increased popularity in the U.S. and the UK – as consumers grapple with getting started on low-carbohydrate diets, they can rely heavily on authoritatively prepared meals. General Mills has launched a “light” version of its existing soymilk brand, 8th Continent, in a bid to encourage consumption of the core brand. The company claims soymilk is an ideal option for consumers who have cut carbohydrates, as it is recommended by the FDA as part of a diet to help reduce cholesterol. Anheuser-Busch was quick off the draw when it launched Michelob Ultra in the UK in August 2003, but the company had already seen a steady take-up of the product in the United States, giving it the confidence to launch in the UK before any of its rivals.
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Potential problems of low-carbohydrate development: growth or extinction? This chapter considers the factors currently restricting the growth of the sector, from establishment and consumer scepticism, the need for more conclusive research into the long-term effects of low-carbohydrate dieting, and the financial outlay needed to develop products, which compete on every level alongside their conventional counterparts. Despite the clear indication that controlling carbohydrate intake works in the short term, the establishment’s scientific jury is still out on the long-term effects of a lowcarbohydrate diet and research in general will be a key factor in the sector’s longterm development. Reformulating foods into low-carbohydrate variants requires more research on the long-term effects of consuming alternative ingredients such as sweeteners and soy protein. Consumers want assurances that the long-term effects of low-carbohydrate dieting are positive, and they also want to see the medical establishment and nutritionists advocating the diet. Working towards a manufacturing and retailing code of practice that audits the launch of new products specifically making low-carbohydrate claims and marketed as such is also a key factor.
Coping with competition: how are rival slimming foods coping with the low-carbohydrate diet? Conventional diet plans, such as Slim Fast and WeightWatchers, have been hit hard by low-carbohydrate dieting. This chapter tracks their recent performance and discovers their strategies for staying with the game.
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The Slim-Fast format lost favour with consumers who found they could lose weight quickly whilst still eating high-protein, high-fat foods on a low-carbohydrate diet and Unilever was forced to cut Slim-Fast’s sales target. WeightWatchers is the other main player in the European and U.S. diet sector and has been facing a similar challenge in the face of low-carbohydrate diets as Unilever. Between 1997 and 2002, attendance at WeightWatchers meetings more than doubled from 23 million to 55 million. WeightWatchers has continued to concede that consumers were interested in following low-carbohydrate diets by including information about different carbohydrates and their varying nutritional qualities.
Industry opinion and consumer research The report’s exclusive, independent research highlights how low-carbohydrate diets are gaining momentum in the minds of 513 food and drink professionals in the UK, Europe and United States. The chapter also gauges the reaction of a UK consumer pool of 159 to specialist low-carbohydrate food products now available in the UK. Over a quarter of food and drink companies view the development of lowcarbohydrate foods as a priority, and are actively investing in the research and development of new products. 28% of industry respondents claimed they had a good knowledge of the sector, because it was a priority for the company for which they worked. The categories believed to currently be most affected are bakery, confectionery and snack-foods. 76% of respondents thought that the snack foods sector would be affected by developments in low-carbohydrate food, with 73% believing that the bakery sector would be challenged.
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Exercise, or lack of it, was a crucial consideration for our food industry and consumer respondents, with nearly all citing it as very important factor in the growth of obesity. Progressive sandwich retailer Benjy’s, which stocks a range of low-carbohydrate products including Carbolite bars, showed its strength in the consumer survey, with 40% of the sample claiming they would buy its products in the future up from the 2% who currently regularly purchase Benjy’s products.
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Chapter 1
Introduction
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Chapter 1
Introduction
Summary Dr Atkins’ New Diet Revolution has been read by 50 million people, sold 25 million copies and has topped the U.S. best-sellers list for five years. Debate has raged and intensified in the past few months as the UK public grapples with its ever-increasing girth. The prevalence of obesity has increased by about 10% to 40% in the majority of European countries over the last 10 years. A diet which encourages the consumption of tasty, fatty foods and makes good use of marketing, celebrity endorsement and the establishment of a dedicated company to distribute branded products have all helped Atkins, and lowcarbohydrate dieting in general, gain momentum. Just as low-fat foods were limited to a few product categories 20 years ago, the prevalence of “lighter” options now available in every sector has built and strengthened existing brands and established new ones.
Low-carb diets are rooted in history “Of all the parasites that affect humanity, I do not know of, nor can imagine any more distressing that that of obesity.” William Banting, 1863 Low-carb consumers date back to 1863 Back in 1863, undertaker William Banting was at his wits’ end. He had tried every diet he could think of in a bid to lose a few stone, and was plagued by “pain and difficulty, which only the corpulent can understand”.
One doctor had recommended exercise, so Banting rowed his boat for two hours a day and developed an even bigger appetite. Another doctor assured him that gaining weight 24
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was part of getting old, and suggested “more exercise, vapour baths, shampooing and medicine”.
Downhearted and increasingly deaf, Banting consulted ear, nose and throat specialist Dr William Harvey, who was researching how fats, starches and sugars affected the body. Harvey prescribed a diet for Banting, which cut out bread, butter, milk, sugar, beer and potatoes. It worked, and Banting lost 46 lbs in a year by cutting down on carbohydraterich foods and eating hearty amounts of meat. He published the results in his Letter on Corpulence to the Public, which was republished many times, raised huge sums for various medical foundations and established a Banting fan-base of thousands.
Banting’s unverified observations were ridiculed at first, but were copied and refined by doctors for years to come. One of them was a U.S. doctor called Helen Densmore, who in the 1890s excluded bread, cereals and starchy food from her patients’ diets and saw them lose up to 15 lbs in the first month of dieting.
Enter, Dr Robert Atkins Therefore, thanks to Banting, the U.S. cardiologist Dr Robert Atkins was not the pioneer of the low-carbohydrate diet – the rapid results of following it had already been observed. Atkins began researching diets that controlled carbohydrate intake in the 1960s and published his Diet Revolution in 1972.
Despite the fact that many had previously advocated a low-carbohydrate diet, his name alone has become synonymous with the practice. Following the book’s re-launch in 1992, the Atkins’ diet is followed religiously by an estimated 17 million people in the
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United States, with a further 42 million people cutting some carbohydrates from their everyday dietsi.
Dr Atkins’ New Diet Revolution has been read by 50 million people, sold 25 million copies and has topped the U.S. best-sellers list for five yearsii. Before his death in 2003, Dr Atkins published Atkins for Life – a guide to maintaining a low-carbohydrate lifestyle.
Getting to grips with the ‘science’ behind the Atkins diet From the outset, Dr Atkins’ diet was developed to help patients with cardiology-related illnesses, with weight-loss as a secondary factor. Hence, its positioning as a scientific method of dieting is crucial to its appeal. The diet also benefits from the increasing number of people who follow a low-carbohydrate “way of life” simply because it makes them feel better, and not because they have large amounts of weight to lose, is also a testament to its effectiveness and achievability.
It works because restricting carbohydrate intake forces the body to find its fuel from other sources, namely, stored body fat. The consumption of carbohydrates stimulates the production of insulin. The role of the insulin is to break down the carbohydrates into simple sugars, which can be easily absorbed into the bloodstream and then stored in the body’s cells. The sugars wait in the cells to be converted into energy when required by the body. More often than not, these energy sources are not called upon and are therefore converted into fat.
i
Knight Ridder - US
ii
The Telegraph – 25.5.03
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Advocates of low-carbohydrate diets claim that eating too much carbohydrate causes over-stimulation of insulin production. This subsequently leads to unstable blood sugar levels, which can cause fatigue, irritability and hunger pangs. The importance of recognised research for the continued development of the sector will be covered later in this report.
Exploring other low-carb diets Many other low-carbohydrate diets are also prevalent, but none have succeeded in capturing the public’s mind in such a way as the Atkins diet. The following diets are widespread in the United States and are beginning to be trialled by some consumer groups across Europe. The Carbohydrate Addict’s Diet, the Lifelong Solution to Yo-Yo Dieting, Dr Rachel F Heller and Dr Richard Heller, 1999. This diet draws on research, which suggests that some humans are “addicted” to carbohydrates and are unable to process them efficiently. It forms one of a range of books written by the same authors. The South Beach Diet, Dr Arthur Agatson, 2003.
This essentially promotes a low-carbohydrate diet, but criticises Atkins for its high-fat approach. Recognises the qualities of some carbohydrate products and is arguably the Atkins Diet’s greatest rival. The Hamptons Diet, Dr Fred Pescatoree, 2004 Just published, and written by the former medical director at the Atkins Centre, the diet and its author have been dubbed the successor to Atkins. Protein Power: The High-Protein/Low Carbohydrate Way to Lose Weight, Feel Fit and Boost Your Health – in Just Weeks! Michael and Mary Eades, 1997.
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This diet restricts all refined carbohydrates. The Schwartzbein Principle, Diana Schwartzbein and Nancy Deville, 1999. Shuns the traditional food pyramid, instead advocating a diet dominated by fat and protein. Life Without Bread – How A Low-carb Diet Can Save Your Life, Christian B Allan and Wolfgang Lutz, 2000. Focuses and promotes a high-protein diet as the one most suited to humans. The Diet Cure, Dr Julia Ross 1999. Advocates a high-protein, low-carbohydrate approach. Eat Fat – Get Thin!, Barry Groves, 2000 Considers our evolution; it explains how the body works and why low fat, low-calorie diets ultimately lead to weight gain. The Zone: Revolutionary Life Plan to Put Your Body in Total Balance for Permanent Weight Loss, Barry Sears, 1995. The diet lists “good” and “bad” carbohydrates and advocates a high-protein diet as a long-term solution to weight loss.
Obesity – this century’s massive problem The weight of the world’s population has become a very modern problem. Banting, whose name fell into common parlance to describe the state of dieting, would have felt quite at home amongst the diet-obsessed Western culture of today.
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There is no doubt that the current rise of obesity globally has become a major problem. In the UK alone, a quarter of men and one-fifth of women are considered to be obese according to figures released by the Food Standards Agency and the Department of Healthiii.
Debate has raged and intensified in the past few months as the UK public grapples with its ever-increasing girth. The prevalence of obesity has increased by about 10% to 40% in the majority of European countries over the last 10 years, according to the American Obesity Association. In the U.S., the association claims approximately 127 million adults are overweight, 60 million obese, and nine million severely obese.
The FSA and Department of Health’s (DoH) fourth survey into the public’s nutritional health, published in February 2004, was a wake-up call that Britons are also getting bigger. When the National Diet and Nutrition Survey was last published in 1987, only 8% of male participants and 12% of women were obese. Interestingly, the new figures show men have overtaken women, with 25% of male respondents now obese, compared with 20% of women. Obesity levels in England have trebled in the past 20 years; currently around 24 million adults in the UK are overweight or obese, and levels are still risingiv. Obesity is increasing more rapidly in England than in other parts of Europe. It is not just adults who are getting bigger - children are also expanding. In the U.S., the AOB reports that approximately 30.3% of children (ages 6 to 11) are overweight and
iii
National Diet and Nutritional Survey, Volume 4, Food Standards Agency 5.2.04
iv
Health Survey England 2001
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15.3% are obese. For adolescents (ages 12 to 19), 30.4% are overweight and 15.5% are obese.
The UK figures are not much better – as early as January 1991, a Kings College survey published in the British Medical Journal showed that 4 to 11 year-old children were becoming overweight, with a massive rise between 1984 and 1994. Approximately 5% of English boys tested in 1984 were overweight, but a decade later, the figure had risen to 9%.
More recent figures show that 15% of UK children are classed as obese. In the past 10 years obesity in six year olds has doubled (to 8.5%) and trebled among 15 year olds (to 15%). Maturity-onset diabetes (type 2) is now being seen in school children that are obese – previously it was only seen in middle-aged and older adults. Overweight adolescents have a 70% chance of becoming overweight or obese adultsv.
According to figures from the International Obesity Task Force, England and Scotland’s high levels of obesity are not alone in Europe. In Germany, 17.2% of men and 19.3% of women are classified as obese, with 19% of Finnish men and women also obese. Interestingly, while 27.9% of Russian women are obese, only 10.8% of men there are. Countries with lower obesity rates include France (9.6% of men, 10.5% of women), the Netherlands (8.4% of men, 8.3% women) and Italy (6.5% of men, 6.3% of women).
Why now? The appeal of low-carbohydrate diets Although the UK government or nutritionists have not yet approved low carbohydrate diets, the public is keen to try them to shift excess weight – approximately three million
v
Parliamentary Office of Science and Technology Postnote 2003, No 205, Childhood Obesity
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people are currently following Atkins in the UKvi. The diet has yet to gain momentum outside the UK in Europe, although German consumers are also interested in lowcarbohydrate dieting. The obesity statistics above show how consumers in European countries such as Italy and France are likely to be less receptive to diets of any kind.
Over half of respondents in the Obesity, Low-Carb Diets and Atkins Revolution consumer survey (see Chapter 8) had tried a low-fat or low-calorie diet and just over a quarter had tried the Atkins diet. Other branded low-carbohydrate diets did not fare so well, with only two and four consumers trying the Zone or South Beach diets respectively, although low-carbohydrate diets in general were popular – a combined 57% of consumers had tried one in some form.
A diet which encourages the consumption of tasty, fatty foods and makes good use of marketing, celebrity endorsement and the establishment of a dedicated company to distribute branded products have all helped Atkins, and low-carbohydrate dieting in general, gain momentum.
The potential opportunities to tap into this market are huge. There already exist a number of predominantly U.S. players, not just Atkins Nutritionals, within the lowcarbohydrate market, manufacturing breads and baking mixes, pasta, crisps and snacks, ready meals, biscuits, drinks and speciality supplements catering for those following the diet.
Brands such as Atkins Nutritionals, Keto and Carbolite are now widely available in the UK, fuelling consumption. Internet shops specialising in low-carbohydrate products are now joined by major high-street retailers such as Boots and Superdrug, as well as independent health food shops.
vi
The Telegraph – 25.5.03
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Opportunities for brands’ image revival Foodservice companies and fast food chains are also offering low-carbohydrate meal options – a trend largely springing from the U.S. Burger King sells bunless meals and Subway has developed a line of Atkins-endorsed wraps to satisfy low-carbohydrate consumers. Pepsi is trialling a low-carbohydrate version of Doritos in the U.S., with plans to roll out nationwide and global distribution soon, and has just announced it will develop a low-carbohydrate version of its flagship cola brand. Coca-Cola is following suite. Anheuser-Busch beer brand Michelob is now available in low-carbohydrate form.
In the UK, sandwich shop chain Benjy’s has also developed a range of low-carbohydrate sandwiches and sells the Carbolite range of products, and British Bakeries has moved quickly to develop a low-carbohydrate brand extension of its Nimble diet bread.
Although product rollout has yet to build momentum, there is evidence to show that manufacturers are starting to believe low-carbohydrate foods are an important issue. Not only are they researching their own product lines, but they are also influencing competitors to learn more about this sector.
In the UK, Leatherhead Food International and the Food and Drink Innovation Network both organised sell-out conferences in the past few months. In the U.S., the Low-Carb Manufacturers Alliance held a conference in April 2004, with delegates from major food, drink and ingredients companies such as Heinz, Coors, McDonald’s, Barry Callebaut and Cargill in attendance.
Ignoring the impact of Atkins and low-carbohydrate choice is not an option Just as low-fat foods were limited to a few product categories 20 years ago, the prevalence of “lighter” options now available in every sector has built and strengthened existing brands and established new ones. Ignoring the impact of Atkins and lowcarbohydrate choice is not an option. It will take time, but it is highly likely that the same will happen for low-carbohydrate food choices. 32
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Chapter 2
Market Dynamics and Drivers: How Have Consumers Become More Obese, Yet More Obsessed With One Diet Than Ever?
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Chapter 2
Market Dynamics and Drivers: How Have Consumers Become More Obese, Yet More Obsessed with One Diet than Ever?
Summary Defining obesity is also important. It is a chronic, multi-factorial disorder characterised by excessive body fat. Using the Body Mass Index, which is the weight in kilograms divided by the square of the height in metres (kg/m2), is now the accepted way of measuring obesity. In the U.S., America on the Move, a nationwide initiative to encourage the public to eat more healthily and take up more exercise, has corporate affiliates such as PepsiCo. In the UK, Tesco has introduced specialist labelling for consumers wanting to check the level of carbohydrates in a variety of private label products. It is the only UK supermarket to have taken this step so far, but this is unlikely to remain the case for long. Alongside Atkins Nutritionals there are a wide variety of smaller players catering for low-carbohydrate dieters. Keto and Carbolite are the company’s two main competitors, making a variety of foods and supplements, including bread and baked goods mixes – normally products taboo to low-carbohydrate dieters. To combat the growth in popularity of low-carbohydrate diets, bread, potato, cereals and other food and drinks manufacturers and bodies are ramping up their promotions in a bid to encourage consumers to buy more of them (or at least continue to buy some of them).
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Obesity – a global issue It is perhaps telling that Western cultures have become obsessed with dieting – after all, we have long been obsessed with eating. So much so, that for the first time, obesity presents more of a worldwide health problem than malnutrition. The problem has been dubbed “globesity” by the World Health Organisation (WHO), which states that in 1995, there were an estimated 200 million obese adults worldwide and another 18 million under-five children classified as overweight. As of 2000, the number of obese adults throughout the world increased to over 300 million.
Recent research carried out at Munich University shows that the processed fooddominated diet in the United States is even causing the nation’s population to become shorter. According to researcher John Konlos, who collected data over decades, at the time of the American Revolution, the average U.S. male was two inches taller than his British counterpart. Today, he is almost half an inch shorter vii . Half the German population is overweight, according to the country’s federal statistics office, which surveyed 370,000 people and also found that more men were, on average, heavier than women.
It is not just developed countries like the U.S. and UK, which are suffering from nutrition-related problems. WHO research shows the obesity epidemic is not restricted to industrialized societies. In developing countries, it is estimated that over 115 million people suffer from obesity-related problems. The organisation is conducting research to establish the economic impact of obesity. However, its recent report, researched with the collaboration of the UN Food and Agriculture Organisation, states that a diet rich in carbohydrate and limited fat, as well as physical exercise, is the recommended way to combat rising levels of obesity and the chronic diseases it fosters - cardiovascular
vii
The Observer, 4 April 2004
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disease, diabetes, cancers, strokes and hypertension. The report’s authors note that the combination of nutrient dense processed food, smoking and increasingly sedentary lifestyles have all contributed to the rise of such diseases.
Defining obesity Defining obesity is imperative. It is a chronic, multi-factorial disorder characterised by excessive body fat. Using the Body Mass Index, which is the weight in kilograms divided by the square of the height in metres (kg/m2), is now the accepted way of measuring obesity. According to WHO a BMI of over 25 kg/m2 is defined as overweight, whilst a BMI of over 30 kg/m2 is obese. WHO notes that in Africa and Asia, mean BMI levels are at 22-23 kg/m2, whilst in America, the mean BMI is between 25 and 27 kg/m2.
But these figures are going up and WHO claims that people who were undernourished in early life and then become obese in adulthood tend to develop conditions such as high blood pressure, heart disease and diabetes. A British Heart Foundation (BHF) study published in the New England Journal of Medicine showed that children born thin but gaining weight rapidly were more likely to develop diabetes than those children born heavier.
The BHF claims Type 2 Diabetes is one of the most common non-communicable diseases globally, and estimates that the 150 million people worldwide with the disease will increase to 220 million by 2010. WHO’s World Health Report, published in 2002 showed that 58% of diabetes, 21% of certain heart disease and up to 42% of some cancers recorded globally were attributable to a BMI of above 21 kg/m2.
The British perspective According to the Food Standards Agency (FSA), coronary heart disease is the major cause of death, including premature death, in England, accounting for 115,000 deaths a year.
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Diabetes is a major problem for the obese too – the BHF predicts a 50% increase in the number of sufferers by 2010 to three million, up from two million in 2000. The charity’s statistics database for 2003 also reports that 5% of deaths caused by coronary heart disease in men are related to obesity, rising to 6% in women.
Older people are also more vulnerable to obesity. BHF figures show that whereas 27% of men and 31% of women aged between 16 and 25 in England are overweight or obese, this incidence rockets for older people – 79% of men and 71% of women aged between 55 and 64 in England are overweight or obese.
A Cancer Research (CRUK) report released in April 2004 stated that obesity might soon be a factor in one in three deaths from cancer, making it a threat as big as smoking. The charity commissioned a survey through NOP, which showed that only 29 of 1000 people knew that they were more likely to develop cancer if they were overweight. The charity said it was “extremely worrying”, and added that around 5% of all new cancer cases in women in the UK (6,800 cases a year) and 3% in men (4,000 cases a year) could be avoided if no one was overweight or obese. Research shows that 39% of uterine cancers, 37% of oesophageal cancers, 25% of kidney cell cancers and 11% of colon cancers are thought to be due to overweight and obesity. CRUK added that U.S. experts estimate that a third of cancer deaths there are due to obesity and related factors. Britain could be in a similar position in 10 years time.
And if the nation’s health problems did not cause enough misery for those suffering already there is evidence to show that obesity and related illnesses are also making the economy sick. According to the National Audit Office, the estimated cost to the country is 18 million sick days, 30,000 deaths a year and 40,000 lost years of working life in England alone. The FSA claims that deaths linked to obesity shorten life by nine years on average.
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Tackling obesity – the role of government, manufacturers and retailers Debate currently rages over the best ways to stop the rise of obesity globally. Government, manufacturers and retailers all have a responsibility to help, according to FSA chair Sir John Krebs.
The FSA has agreed an “action plan” to combat childhood obesity, focusing on encouraging the food industry to reduce the amounts of fat, sugar and salt in products aimed specifically at children. Working with schools to push healthy food and encourage healthier foods available in vending machines is also a tactic, as is encouraging celebrities to think more carefully about products they endorse. The FSA wants to work with broadcasters to encourage them to increase the association between high-profile characters and cartoons on TV and healthier foods. Advertisers will also be targeted on the issue of promoting certain foods to children.
The government recently issued guidelines for consumers on the amount of exercise they should take weekly, based on the findings of a report by chief medical officer Professor Sir Liam Donaldson. The recommendations are that people of all ages should exercise for between 30 minutes to an hour five times each week to stay in good physical and mental health.
Consumer pressure groups such as Sustain and the Food Commission have highlighted the public’s concern over marketing high-fat, salt and sugar foods to the UK’s children. Recent conferences have seen advertisers, advertising agencies and government convening to discuss the issues. Manufacturers have been urged to modify products, broadcasters to rethink scheduling of advertisements and agencies to reconsider their choices of celebrity endorsement, with the FSA chair Sir John Krebs suggesting that England Rugby star Johnny Wilkinson could be signed up to promote fruit and vegetables – to adults as well as children (see page 47).
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Manufacturers A 2003 ICM pollviii showed that 79% of respondents thought that food manufacturers were irresponsible. The government-commissioned Hastings Report concluded from numerous research articles that children were influenced by food advertising not just between brands, but across sectors, with less advertised, healthier foodstuffs losing out to more heavily promoted “junk” foods. The pressure on manufacturers to address and take responsibility for the obesity issue is huge.
So much so that some manufacturers are taking steps individually. Coca-Cola is removing advertising and branding from vending machines in schools. McDonald’s has reduced portion sizes and introduced salads and fruit portions, and Kellogg’s is studying the option of replacing promotional toys with sporting equipment such as pedometers. Other companies have pledged not to target children when advertising their products.
Cadbury’s Get Active Other initiatives focus around promotions activity - Cadbury’s Get Active promotion, whereby children could collect product wrappers in exchange for sports equipment for their schools, was widely slammed for encouraging chocolate consumption, although the company consulted widely on the initiative and claimed to have parental support for the scheme. Although Cadbury’s stressed the positive steps taken by the promotion, it has since been dropped, showing the effect of negative PR on such a scheme.
America on the Move In the U.S., America on the Move, a nationwide initiative to encourage the public to eat more healthily and take up more exercise, has corporate affiliates such as PepsiCo. The company’s Wellward range, which includes brands such as Tropicana, Quaker and Dole,
viii
The Guardian
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has been launched to affirm its positioning as a responsible food manufacturing company. Chairman and chief executive officer, Steve Reinemund, said: “We believe that the only real solutions that address obesity and promote wellness are those that provide people with health product choices and equip them with the knowledge and encouragement to develop healthy lifestyle habits.”
Britain on the Move, a healthy lifestyle initiative from ITV, is built around a similar premise and is government-endorsed. The scheme was launched in Spring 2004.
“Fat tax” The UK government mooted the idea of a “fat tax”, a levy on the sale of high-fat foods to be paid either by the consumer via higher prices or the manufacturers, in a bid to lessen their consumption. The Food and Drink Federation, which dubbed it a “food poll tax”, rejected the idea and it seems unlikely that such a scheme will be introduced in the near future.
Several companies, including Unilever, have spoken out against such a tax – Unilever’s co-chairman Antony Burgmans said the company promotes “healthy indulgence” and would oppose a tax to control the consumption of unhealthy foods. “Magnum is part and parcel of a life of vitality, but when I find out that consumers are having five a day, I would do something about that, because I do not want to make a profit that way,” he said in a press interviewix.
Such a scheme has been tried in several U.S. states, with varying degrees of success – problems arise over the classification of different products. For example, whole foods such as cashew nuts are high in fat. Grocery Manufacturers of America, the industry’s
ix
Reuters, 21 April 2004
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trade body has been vocal in its opposition of food tax bills mooted for various U.S. states and is a member of the Don’t Tax Food Coalition. It claims that apart from being an insignificant way to increase revenue, food taxes also penalise low-income families who are least able to pay more for their groceries.
Government questioning In the UK, advertisers, food manufacturers and their respective trade bodies faced rigorous questioning from the government’s Health Select Committee in 2003 and 2004 over the issue of promoting high-fat, high-salt foods to children, food labelling and issues such as any tax on such products.
The findings of the FSA-commissioned Hastings report increased the pressure for a ban on advertising to children and has been encouraged by pressure groups such as Sustain and the Food Commission and Consumers Association.
The Consumers Association has issued a “health warning” to the government, asking it to prioritise nutrition policy and establish Nutrition Council by 2004. It also calls for the government to get tougher on setting targets for reducing child obesity and to introduce a “watershed” for children’s food advertising. Other proposed initiatives by the Consumers Association include FSA and food industry-agreed guidelines about more responsible marketing to children, incentives for manufacturers to reduce levels of fat, salt and sugar in foods and a hard-hitting communications campaign to influence UK consumer eating behaviour.
Criticism against advertisers in the UK Sustain has lobbied hard for regulatory changes surrounding children’s advertising and promotion, and focuses one of its key campaigns on that issue. The organisation also runs a “Grab 5” campaign, encouraging consumers to consumer the daily recommended amount of fruit and vegetables, and a further campaign, which was launched in 1993,
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focusing on labelling on food products aimed at children. The Food Commission is another watchdog organisation, which takes the issue very seriously.
A ban on advertising and promoting food to children was mooted by Culture Secretary Tessa Jowell. Despite the work of campaigning organisations such as those described above, it is, perhaps unsurprisingly, vigorously opposed by both advertisers and food manufacturers, who say that current codes on advertising practice are upheld.
The Advertising Association, which represents the UK’s biggest advertisers, claims that a ban on advertising or promotional activity will do little to bring about the fundamental shift in people’s diets, lifestyles and the increasing incidence of obesity. It argues that what is needed is “attitudinal and behavioural change”, and states that there are no “bad” foods, only “bad” diets. The Institute of Advertising Practitioners cites that despite a ban of adverts aimed at children in Quebec, Canada, which has been operational since 1978, there is no evidence to suggest childhood obesity rates have decreased.
However, in April 2004, the Broadcasting Commission of Ireland announced a new code aimed at restricting advertising messages to children during dedicated programming. The code, with effect from June 2004, is not radically different from the regulations currently in play, although the use of celebrities and programme characters will be banned. The code does not apply to television stations from outside the Republic of Ireland and will only be applicable to national broadcasters.
In April 2004, BBC Worldwide, which licenses top brands including the Teletubbies, Tweenies and Fimbles on nearly 100 products agreed it would cut salt, fat and sugar levels in its pre-school food products. The organisation said it would stop licensing chocolate and confectionery and recommend introducing nutritionally balanced foods. Staple, generic foods such as fruit, vegetables and fish, could also be licensed. BBC Worldwide has spent seven months reviewing its labelling clarity on products and their ingredients in consultation with the FSA, British Nutrition Foundation and Institute for 43
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Optimum Nutrition. There was also extensive consultation with over 1,000 parents of pre-school children.
The future Some observers go so far as to predict that the western world’s food and drinks industry will mirror its tobacco industry. Today, cigarettes and tobacco are highly taxed and regulated, restrictions are placed on marketing and advertising products, and in the United States, companies have been forced to pay out huge sums in compensation to consumers and governments recouping money spent on healthcare.
Portion size and labelling Manufacturers are under growing pressure to reduce the size of certain foods and make ingredients labelling clearer. Clearer, more accurate and more honest information is needed on food labels if consumers are to avoid being misinformed, according to a report commissioned by the Food Standards Agency in February 2003. The report, Bamboozled, baffled and bombarded: consumer views on voluntary food labelling, published by the National Consumer Council (NCC), found that logos on food labels were “more likely to confuse and mislead consumers than inform them”.
The Consumers Association has also addressed the issue of labelling in its “heath warning” to the government, as highlighted above. It wants to see the establishment of a national nutritional labelling scheme by 2005, which would enable consumers to identify foods high in sugar, salt and fat, and thus make more informed decisions about what they eat and drink.
An example of how this is being adopted by a manufacturer in the U.S. is Kraft Foods, which is working to provide more nutritional information on packaging, as well as limiting the size of its single serve portions. The company, which owns the Nabisco biscuit brand, is also putting a halt to in-school marketing in the U.S., as well as 44
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renegotiating vending machine licensing according to different regions through its recently-formed Health and Wellness Advisory Council, made up of health and nutrition academics.
Product labelling is an equally hot topic in the United States, with the Grocery Manufacturers of America (GMA) calling for new regulations to be drawn up by the Food and Drug Administration to account for the number of companies now wanting to make low-carbohydrate claims on packaging. The GMA wants the FDA to set regulations for carbohydrate nutrient content claims for single-serving foods, meal-type products and main dishes. “Clear and consistent labelling standards are an important reference point for consumers searching for the foods that will help them achieve their dietary objectives,” according to Alison Kretster, the GMA’s director of nutrition and scientific policy.
In the UK, Tesco has introduced specialist labelling for consumers wanting to check the level of carbohydrates in a variety of private label products. It is the only UK supermarket to have taken this step so far, but this is unlikely to remain the case for long. As mentioned above, BBC Worldwide worked with the FSA to improve labelling on its licensed products.
U.S. research from market research company Opinion Dynamics highlights that consumers relied on clear labelling in stores when purchasing low-carbohydrate foods. Almost two-thirds (66%) of those on low-carbohydrate diets said it was important that a product had a specific low-carbohydrate label on the packaging, indicating that they rely on the brand labelling rather than their own judgement.
It seems likely that the EU debate on labelling GM foods will be extended to cover new products for sale within the region purporting to have a low-carbohydrate claim.
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The portion and value relationship Another related issue lies in portion size and perception of value. Manufacturers of savoury and sweet snacks have come under fire for super-sizing portions. Portion control in the catering and foodservice arena is more difficult – currently, only a very few companies provide nutritional information and portion size on meals consumed in restaurants.
Increased calorie consumption – and more carbohydrates than ever before U.S. research from the Centre of Disease Control and Prevention shows how consumers’ daily consumption of carbohydrate has grown over the past 30 years. In 1971, women ate 1,542 calories on average, compared with today’s 1,877, while men upped their intake from 2,450 to 2,618. Caloric consumption from carbohydrates has steadily increased too, from 45% to 52% of the daily diet for women and from 42% to 49% for men. The study pointed to the increase in portion size and also health recommendations made to consumers, advising them to switch to a carbohydrate-heavy diet and cut out fatty foodsx.
In line with the consumption of carbohydrate comes the increased consumption of refined carbohydrates such as high fructose corn syrup, used by many soft drinks manufacturers. A study by the American Journal of Clinical Nutrition found that between 1970 and 1990, consumption of HFCS increased by 1000% and now represents over 40% of caloric sweeteners added to food and drink in the United States. The National Food Processor’s Association has vehemently denied the study’s findings and its link with increased obesity and Type 2 diabetesxi.
x
Just-food.com, February 16, 2004
xi
FoodNavigator.com, April 26 2004
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McDonalds has come under fire for offering “supersized” portions, although it has since axed them from its menus. The U.S. culture of “value” being equal to a large portion size is now firmly embedded in the UK, as witnessed by Asda’s “Roll-back” programme, stemming from parent company Wal-Mart’s philosophy of everyday low pricing, or EDLP. Virtually every retailer uses the strategy of “Buy one, get one free” or BOGOF, to build loyalty and encourage repeat purchase.
Managing consumer expectations Consumers expect to receive deals in the supermarket and be offered more for their money when they eat out, but the days of encouraging on-sell at the point of purchase in fast-food outlets may become a thing of the past. While it may be healthy for profits to encourage consumers to eat more, it is not so healthy for those consumers. Challenges are faced in deciding just who is best placed to make those decisions – manufacturers and retailers, the government or consumers themselves. Unilever co-chairman Antony Burgmans, for example, has admitted that over-consumption of the company’s products was not something it wished to profit from.
When did low-carbohydrate diets become popular in the U.S. and why? As outlined in Chapter 1, low-carbohydrate diet plans did not start when Atkins’ New Diet Revolution was republished in 1992. The U.S. public has long been fascinated by low-carbohydrate diets, primarily because they allow dieters to consume the very products they are so often forced to avoid when they follow other diets; full-fat dairy products, lean meat and eggs, to name just a few.
Celebrity endorsement In the U.S., the Atkins diet has risen to the top because it has been packaged and marketed well. It has made a clear link between following the diet and eating familiar branded foods such as TGI Friday Atkins-approved and branded restaurant meals. It has thrived on the mystique of celebrity endorsement.
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The diet also appears to work – not just for the “beautiful people” of Hollywood, but also for ordinary people, many of whom are reported to have battled with their weight for years and failed to shift it following other, more traditional regimes. Those success stories, which are widely publicised, fuel interest amongst other dieters. Now, according to research from U.S. market research firm Opinion Dynamics, the majority of people think that low-carbohydrate diets are the most effective way of losing weight in the short term. 38% of a consumer pool thought low-carbohydrate diets were the most effective, which stands at a higher figure than the 32% of consumers who felt that lowfat diets were more effective in the short-term.
Alongside Atkins Nutritionals there are a wide variety of smaller players catering for low-carbohydrate dieters. Keto and Carbolite are the company’s two main competitors, making a variety of foods and supplements, including bread and baked goods mixes – normally products taboo to low-carbohydrate dieters. Companies producing lowcarbohydrate foods will be outlined in more detail later in the report.
Combating Atkins – how are foods forbidden on the Atkins Diet protecting their market share? To combat the growth in popularity of low-carbohydrate diets, bread, potato, cereals and other food and drinks manufacturers and bodies are ramping up their promotions in a bid to encourage consumers to buy more of them (or at least continue to buy some of them). Atkins Nutritionals maintains the diet in no way bans such products, apart from in the first two weeks of following the diet. The aim is to reintroduce them into the diet slowly. What the diet does ban is processed, refined carbohydrates from cakes, biscuits and white bread.
Potatoes In the UK, the British Potato Council launched a generic campaign in July 2003 to extol the virtues of the root vegetable, which is banned by Atkins at the initial stage of the diet, but tolerated in small amounts later. There is evidence of a drop in potato consumption, according to the organisation. Figures showing the amount of potatoes 48
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used in February 2004 were 7.6% below the yearly average, and stock levels are down 15.7% from last yearxii. As an example, one Scottish producer saw its turnover for 2002 to 2003 drop from £87.5 million to £77.5 million and is drumming up enthusiasm for its potatoes by sending samples to top chefs to encourage them to incorporate them into recipes and boost consumptionxiii.
Somewhat at odds with the current climate of tackling obesity, the BPC also organised British Chip Week, a major consumer promotion aimed at encouraging people to eat more chips – the BPC estimates that 38,000 tonnes of potatoes are used to make chips every week in Britain. Potato product use has actually increased by 20% in the last 10 years, according to the organisation.
Bakery products The Bakers’ Federation has also tackled the issue of consumers shying away from bread products, launching British Bread Month in October 2003 to promote its nutritional qualities. Research carried out by the Institute of Grocery Distribution showed that 23% of 25 to 35 year-olds and 22% of all women in all age groups were actively reducing their carbohydrate intake because they believed it had “detrimental effects”. The worst offenders for reducing bread consumption are in London and the Southeast, with the Welsh and the Scots reducing their bread intake the least, according to the Bakers’ Federation.
xii
British Potato Council
xiii
Scotsman, Feb 1, 2004
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Fruit juice In the United States, research showed that the decline in orange juice sales was down to consumers rejecting it as part of a low-carbohydrate diet. The industry has reported a 5% decrease in sales in the past two years, providing several explanations.
Research company Opinion Dynamics conducted a survey of 900 adults and found that among the people who had not tried a low-carbohydrate diet, 16% said they had increased their orange juice consumption and 17% said they had decreased consumption, or eliminated juice from their diet, which indicated stagnancy amongst the group. However, among those who had tried a low-carbohydrate diet, 39% had stopped drinking orange juice altogether or decreased their intake, leading researchers to conclude that enthusiasm for low-carbohydrate diets was the sole reason for the general decrease in orange juice consumption.
Pasta U.S. pasta giant American Italian Pasta reported lower sales for the quarter ending April 2004, saying that consumers were more conscious of eating carbohydrates xiv . The company is responding by developing a range of low-carbohydrate pasta products.
Pasta has been cited as a carbohydrate food with a lower glycaemic index, which means it has less effect on blood sugar than other products such as potatoes or bread and can be incorporated into a low-carbohydrate diet with moderation. Consequently, the longterm effect of low-carbohydrate diets on the conventional pasta market may be less harmful than at first anticipated. However, the portion sizes to which the U.S. public have become accustomed have meant that manufacturers are exploring ways to allow
xiv
Just-food.com, 13 April 2004
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low-carbohydrate eaters to consumer the same volume of pasta, but with reduced carbohydrate levels.
Heavy pasta consumption in Mediterranean countries such as Italy, and bread consumption in France, for example, makes these territories culturally more resistant to the trend for low-carbohydrate dieting.
Foods benefiting from the Atkins craze Conversely, some foods, which are naturally low in carbohydrate, such as meat and cheese, have benefited from consumers’ obsession with the diet. One example is Fromageries Bel SA’s Laughing Cow cheese, which is a recommended snack for followers of The South Beach Diet. In certain areas in the United States, it is proving difficult for retailers to keep up with consumer demand. IRI figures indicate that 2003 sales of Laughing Cow wedges soared 56%, and its U.S. manufacturing plant is running overtime in a bid to meet demandxv.
Case study: How “I’m lovin’ it” is helping McDonalds stay on top Between 2000 and 2002, McDonalds reported poor financial results, saw profits plummet and posted its first quarterly loss in the company’s history – in 2002. The reason for this loss was simple: McDonalds was not appealing to its core group of consumers, many of whom wanted to eat more healthily. Keen to eat salads and steer clear of the fries and burgers, those consumers went elsewhere. Furthermore, McDonald’s did not appear to engage with the increasingly vocal debate about global obesity. The chain closed branches around the world and watched its share price fall.
xv
The Standard Times, 2 April 2004
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Faced with falling sales and a stymied expansion plan, the company saw the return of James Cantalupo, formerly head of McDonald’s International. Cantalupo, who died in April 2004, was instrumental in forcing the company to change its positioning to reflect the very real lifestyle changes which consumers are making. All that, without alienating those whose love of fast food has made the company the world’s eighth biggest brandxvi.
McDonald’s went back to basics, choosing to focus on the five fundamental marketing elements upon which to build: “people, products, place, price and promotion”. The company sought to convey that to consumers using a global brand strategy, “I’m Lovin’ It”, which was developed by roster agency Heye & Partner in Munich, Germany, part of the DDB network. The branding campaign fits within its overall “Rolling Energy” initiative. The “I’m Lovin’ It” strapline is the first used by McDonalds on a global basis, and was chosen for its “hip, relevant and powerful” elements as well as its appeal to all consumers, especially the youth market, parents and children.
McDonald’s executive vice-president and global chief marketing officer, Larry Light, said: “The campaign is unprecedented in McDonald’s history as more than 100 countries unite behind a single brand message to our customers. It’s much more than just a new tagline or commercials – it’s a new way of thinking about and expressing our worldwide brand appeal.”
The brand’s ambassador is singer Justin Timberlake, who appears in and provides music for the advertisements as well as providing insight into the youth market. The company sponsored his 2003 European tour. Five adverts were produced in 12 languages to be aired in 118 countries. One of them stars the company’s traditional mascot, Ronald McDonald. Far from being sidelined, the company is committed to supporting this iconic brand, and promoted him – tongue firmly in cheek – to the position of chief happiness
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Interbrand 2003 Survey
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officer. The character has become the lynchpin of McDonald’s growing corporate social responsibility manifesto, championing its Ronald McDonald House Charities children’s healthcare scheme.
Although the campaign has its critics, mostly focusing on the difficulties of conveying messages to many local, different markets using a single strategy and strapline, there is evidence to suggest that McDonald’s work is paying off. In March 2004, the company reported same-store sales growth over the past 10 months, a revenue boost of 11% from its 2002 figures and a profit surge of 64% for the same periodxvii.
But although the company is the 18th biggest global advertiser, with a 2002 spend of $1.18 billion this is not all down to advertising and communication. The company has been making in-roads into addressing health issues through its menu and portion changes. McDonalds has been promoting healthier lifestyles and changing its menus accordingly.
In the UK, this means fresh fruit is now available, and since launching the 80g bags of apple slices and seedless grapes in 2003, McDonald’s has become the biggest retailer of pre-packaged fruit in the UK. The initiative also saw McDonald’s publicly teaming up with nutritionists to help parents ensure children get the recommended five portions of fruit and vegetables per day. The company also introduced semi-skimmed organic milk – complete with child-attracting bright packaging - to its menu from February 2003, and re-designed its Happy Meals to include low-fat yoghurts, Chicken Selects (breast meat nuggets in a coating) and Robinson’s Fruit Shoot drink.
In March 2004, McDonald’s announced “the most significant change” to its menu since its launch 30 years ago - salads. Salads Plus, a permanent menu of two salads (ranch and
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The Globe and Mail, Mar 15 2004
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Caesar), with chicken, a Quorn fillet sandwich, side salad, warm chicken sandwich, a fruit and yogurt dessert, fresh apples and Evian bottled water. Consumers buying products from the traditional menu will be able to substitute their fries for a side-salad.
Promoting and advertising the menu changes in the UK will take up 20% of McDonald’s UK yearly marketing spend of £37 million. The company has conceded that Happy Meal advertisements aired during childrens’ television programming will always feature chicken McNuggets alongside Fruit Shoot and the fruit bag. It is also introducing more nutritional information for use in-store, in consultation with parents in the UK.
Recently, McDonalds pledged to remove Supersized French Fries and drinks (7oz packs and 42oz fountain cup) from menus to simplify operations and follow the trend for healthier eating. In the hours that followed its decision on March 4, 2004, shares rose 2% in the United States to a 52-week high of $28.99xviii, but the company claimed it was not reacting solely to calls from campaigners lobbying for more manufacturers to take responsibility for obesity.
McDonalds also followed companies such as PepsiCo and Kraft in establishing a body of experts to advise on nutrition and health issues. Its Advisory Council on Healthy Lives is led by McDonald’s executive Ken Barun and includes academic and lay experts in nutrition and health-related fields such as ex-Olympic sprinter Jackie Joyner-Kersee and International Olympic Committee medical and scientific director Patrick Schamasch. The company also collaborated with the World Health Organization and the U.S. Department of Health and Human Services to help educate consumers about the role of nutrition in a healthy lifestyle.
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International Herald Tribune
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McDonald’s franchise operations have also been under close scrutiny and they are now expected to maintain higher levels of cleanliness and quality. Franchisees are also expected to contribute towards store refurbishment and on-going training for staff.
Despite the level of commitment the company has shown on the issue of obesity, many remain sceptical. Regardless of the intense competition in the fast food arena, many view McDonald’s as a natural target and the company has had to become accustomed to being attacked. The “McLibel” trial of the 1990s, when the company sued London Greenpeace activists for distributing a leaflet, “What’s Wrong with McDonald’s”, is just one hotly debated example. It was the longest civil trial in UK history which McDonald’s won, but it did not mean the company escaped criticism – if anything, it simply hardened the resolve of campaigners and lobbyists to curtail its development.
More recently, teenagers in the United States, who accused the company of allegedly contributing to their health problems, unsuccessfully sued the company but the courts rejected the suits. The latest bout of ‘McDonald’s-bashing’ in the U.S. centred on a documentary, Supersize Me, which showed filmmaker Morris Spurlock eating nothing but McDonald’s products for a month and gaining 25 lbs. The company has reacted vehemently against the film, stressing that the amounts eaten by the filmmaker were vastly above what would be considered representative of three meals a day. McDonald’s said it considered the film to be a “gross misrepresentation” of its company ethos, and rolled out an aggressive PR strategy headed by nutritional experts.
However, McDonald’s has shown it takes the issues surrounding nutrition and obesity seriously, especially now that that interest has been shown to improve its bottom line. UK CEO Andrew Taylor said: “We recognise that we have a responsibility to help our many customers make an informed choice when they eat in our restaurants.”
So far, the company has been a tentative player in the low-carbohydrate food arena, in spite of sector competition from rivals such as Burger King and Subway. In February 2003, it rolled out a small handful of low-carbohydrate meal options in restaurants in 55
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Canada. Its morning platter consists of two eggs, two pieces of bacon, sausage and tomato, whilst one meal consists of a quarter-pound burger, bacon, cheese, plus a small amount of salad, onion, tomato and pickle. The other substitutes a chicken breast for the burger. The company said it would introduce other items based on the success of those recently launched, including a range of low-carbohydrate sandwiches.
McDonald’s is treading carefully with low-carbohydrate options in Europe and the UK. Currently it has no dedicated low-carbohydrate food options in this market, but this is in line with current manufacturer and retailer scepticism with the sector as a whole, and is not significant at this time. It will be interesting to see whether this changes in the next few months following a continued interest in the Atkins diet and other low-carb diets by consumers in the UK in particular.
Conclusions Government and manufacturers are beginning to respond to the rising levels of obesity through initiatives and discussion. Product formulation, marketing, labelling and future development are all under scrutiny.
Consumers are experimenting with low-carbohydrate dieting because it works and does not restrict foods normally associated with indulgence. They are beginning to have an influence on the growth trends in particular markets, such as pasta, bread and potatoes, and as such, manufacturers and suppliers in these areas are adapting to suit their requirements.
Companies normally associated with indulgence foods, such as McDonalds, are working hard to reposition themselves as healthier providers of food. They have never been more aware of the power of negative PR and consumer opinion.
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Chapter 3
Getting Inside Atkins
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Chapter 3
Getting Inside Atkins
Summary As seen from the description of the Atkins regime, eating a low-carbohydrate diet is not designed to be a short-term solution to weight loss. The opportunities for tapping into the growing number of consumers who have chosen to permanently stick with a low-carbohydrate diet are enormous, with virtually every category ripe for development. Atkins markets low-carbohydrate food products in most sectors, including bread and pasta, condiments and sauces, ready meals and starters, snacks, meal bars, drinks and syrups and breakfast cereals. The Atkins Direct catalogue has been instrumental in growing brand awareness early on when the distribution and range of the products was less widespread than today. Themed restaurant chain TGI Fridays and sandwich company Subway were the company’s first partners in the United States. Atkins Nutritionals recruited media doctor Dr Sarah Brewer to become its spokesperson in April 2004 in a bid to present the diet to UK consumers in a way in which they could relate. Dr Brewer, a well-known commentator on nutrition and diabetes, now represents the diet in the media, but does not endorse the Atkins-branded products.
Company profile and history “Our vision is simple – to change the way the world eats. We have our sights set high.” Tamara Richardson, Senior Vice-President, Atkins Nutritionals
“Atkins has become something like Kleenex is to facial tissues.” Dean Rotbart, Executive Editor of LowCarBiz, U.S.
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The story of how a young cardiologist lost excess weight by cutting out starchy carbohydrates is now the stuff of legend. In 1963, Dr Robert Atkins took one look at a photo of himself on an ID card and decided it was time to lose the 30 lbs he had gained as a medical student. He tried to lose weight though conventional methods, and after repeated failure decided to try a low-carbohydrate regime he had read about in the Journal of the American Medical Association. The weight came off, and Atkins set about devising his diet plan from his own results.
After 10 years of treating patients in his obesity clinic, The Atkins Centre for Complimentary Medicine, Atkins wrote his Diet Revolution book, unleashing his theory on low-carbohydrate eating onto the U.S. public. It was not plain sailing, and Atkins alienated himself from other medical professionals working to understand and combat the country’s hastening obesity and diabetes problems. The low-fat, carbohydrate rich healthy eating plan, which is now the norm, was fast becoming medically established. In 1977, the U.S. public were advised by a Senate committee that they should curb their fat intake to prevent against disease, and in 1984, the National Institute of Health officially recommended that everyone should reduce their intake of fat.
When he first published his book, the American Medical Association launched a scathing attack on Atkins’ findings. The organisation called it a “bizarre regimen”, and one that encourages the consumption of “an unlimited intake of saturated fats and cholesterolrich foods”. The medical establishment mistrusted his diet so much that Atkins even had to defend his diet in Congressional hearings.
Thirty years later, Dr Atkins’ theories are still causing controversy. Although Dr. Atkins is dead, his company has grown enormously, sprouting from a dietary clinic to a huge publishing, marketing and manufacturing and research company. Atkins founded Atkins Complementary Formulations in 1989 with a remit to provide the diet’s growing following with low-carbohydrate foods and supplements, and raise funds for ongoing research.
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The company’s name was changed to Atkins Nutritionals in 1999 and experienced steady growth up to 2001, when a management team, plus scientists, nutritionists and doctors were brought on board to cope with demand. It is still privately owned, but recently, U.S. banks Goldman-Sachs and Parthenon Capital bought a majority share for £700 million – evidence of its potential. Sales are estimated at over $100 million (£56.5 million) and the company is reported to have enjoyed a 260% growth between 2000 and 2002. The company would not release further financial data at the time of writing, but confirmed that it has seen triple-digit growth in the past few years.
The research arm of the company is another important ingredient in its development. Although 19 studies have been conducted in the past three years by Atkins Nutritionals, further research, validating results already garnered and the plethora of anecdotal success stories is needed before sceptics will be convinced. A discussion on research and how important it is for the long-term health of the low-carbohydrate sector is included later in the report.
2004 and beyond 2004 has seen the company steadfastly lobbying the U.S. government for recognition of its revised food pyramid, which advocates a diet richest in protein sources, then green vegetables, then fruits, then vegetable and seed oils, cheese and dairy and topped off with whole grain foods.
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The Atkins Lifestyle Food Guide Pyramid ™ Figure 3.1: The Atkins Lifestyle Food Guide Pyramid ™
Business Insights
Source: Author research, Atkins Nutritionals
Atkins Nutritionals is also getting involved in education programmes in the U.S. with its Atkins Youth Initiative. The project is aimed at encouraging children to cut refined
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carbohydrates from their diet, using the classroom and school cafeteria to help change perceptions. It is not about encouraging children to follow the diet plan, according to Atkins Nutritional’s Physician’s Council chairman Dr Stuart Trager.
In the UK, the company is active in presenting its ideas and research to key government policy-makers and opinion-formers, many of whom are sceptical of the long-term benefits of low-carbohydrate diets. It uses public and parliamentary affairs company The Whitehouse Consultancy for advice on lobbying.
What is the Atkins diet? The diet, dubbed by much of the media as the ‘all-the-steak-you-can-eat-diet’, focuses on four core stages.
Stage one – Induction An induction period of not less than two weeks sees dieters cutting back on all complex and starchy carbohydrates, forgoing bread, potatoes, rice, pasta and refined carbohydrate products such as cereals, biscuits and cakes as well as all alcohol, tea coffee and soft drinks – including diet varieties. The diet advocates plenty of fresh meat, dairy products, eggs, as well as copious amounts of water. No more than 20g of carbohydrate must be eaten, most of which should come from salad or a limited number of certain vegetables. Foods, which contain both protein and carbohydrate (chickpeas and kidney beans), as well as fruit are forbidden. The diet also advocates the use of supplements and Atkins manufactures its own range, including a 14-day pack designed for dieters who are new to the regime.
The induction period is designed to switch the body from burning carbohydrate as fuel to burning existing fat stores, stabilise blood sugar and curb food cravings. Weight loss is often pronounced during this stage. Some dieters experience withdrawal symptoms from some carbohydrates, although it is claimed these pass after a few days. Other side
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effects can include constipation and bad breath, but the diet offers solutions for sufferers.
Stage two – Ongoing weight loss The second stage is designed to reintroduce a limited amount of carbohydrate back into the system, although processed carbohydrate products such as bread and cakes are still forbidden.
The emphasis at this stage is how the diet works as a long-term plan and dieters are encouraged to take responsibility for monitoring the amount of carbohydrate they consume without stalling their weight loss or putting the pounds back on. Each week, a dieter will consume 5g more carbohydrates than the previous, stopping that increase when they have established a level at which they can eat certain carbohydrate-rich foods. A dieter’s daily threshold of carbohydrates is referred to as a ‘Critical Carbohydrate Level for Losing’.
Foods encouraged at this stage include more salad, cheese, seeds and nuts, wine, berries and other fruits. The diet also makes reference to foods specifically designed for lowcarbohydrate dieters, but encourages consumers to be vigilant about reading and checking labels to determine their actual carbohydrate content.
Exercise is also advocated at this stage of the diet.
Stage three – Pre-maintenance Weight loss at this stage of the diet is almost imperceptible – the emphasis is on maintaining healthy eating habits to ensure that weight stays off. Dr Atkins dubbed this stage the “training ground” for a lifetime of low-carbohydrate eating and encourages dieters to increase their intake of carbohydrate by 10g per week. Dieters are encouraged to try new foods, establishing whether they are able to cope with small amounts of foods such as potatoes or whole-grain bread.
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It is claimed that: “Nothing will have a more significant effect on reducing the long-term risks for cardiovascular disease, hypertension and diabetes than maintaining a healthy weight”.
Stage four – Lifetime maintenance By this time, dieters have observed their metabolic requirements for carbohydrate consumption and understand the levels they can eat without gaining further weight.
Followers are encouraged to keep adding foods to their diet, apart from sugars, which remain banned. Low-carbohydrate food choices are advocated, but excess consumption not recommended. Atkins identifies “trigger foods” as the only foods that should not be reintroduced into the diet. These could include potato chips, peanuts or chocolate.
Being “food aware”, wary of product contents and a regular exerciser all form the mainstay of this stage of Atkins.
An innovative company As seen from the description of the Atkins regime, eating a low-carbohydrate diet is not designed to be a short-term solution to weight loss. The opportunities for tapping into the growing number of consumers who have chosen to permanently stick with a lowcarbohydrate diet are enormous, with virtually every category ripe for development.
In this chapter, products launched by Atkins Nutritionals specifically for the UK market are considered. This chapter is also particularly relevant for European food and drinks executives who are keen to find out more about the role of such a diet in a ‘new’ market such as the UK or who are keen to launch their products outside of the UK or United States. Later in the chapter there is analysis of the company’s activity in the United States, other key manufacturers operating within the sector and across the different food categories themselves, showing products currently available, while highlighting the sectors with growth potential.
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Product innovation Recognising that product innovation was crucial to ensure that the diet plan’s followers continued to invest in the Atkins brand, the company sought to establish a range of manufactured products very quickly. There is little margin in the whole foods advocated on the diet, for example, leafy vegetables, unprocessed meat, butter, so added value, easily marketable foods, which also fulfilled the low-carbohydrate claim were essential.
Atkins now sells an increasingly wide variety of dietary supplements and lowcarbohydrate foods, which were launched into the UK market in early January 2004. The company stresses that they are not necessary to succeed on the diet and heavily promotes the consumption of whole, unprocessed foods.
The U.S. market Atkins markets low-carbohydrate food products in most sectors, including bread and pasta, condiments and sauces, ready meals and starters, snacks, meal bars, drinks and syrups and breakfast cereals.
The company reports that it has been struggling to meet demand in the U.S., where it has listings in all major food retailers and drugstore chains nationwide. Atkins Nutritionals will not disclose exact sales patterns in the U.S., but reports generally that sales of the products do better in coastal and metropolitan areas, with the south-westerly states showing particularly fertile growth.
Atkins Direct The Atkins Direct catalogue has been instrumental in growing brand awareness early on when the distribution and range of the products was less widespread than today. The catalogue was established in 1995 as a simple product list, became the Complementary
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Formulas catalogue and in 2000 was renamed Atkins Direct. In 2001, it accounted for 25% of the company’s sales of supplements and products.
Atkins delivered to your home The company also operates Atkins at Home in the United States; a meal delivery service for affluent consumers who do not want to follow the diet unsupported. The daily delivery program is a 28-day plan at a cost of $39.95 per day. The food is prepared daily by professional chefs and the price includes consultation with a personal coach. Three meals and one snack are delivered in a cooler bag by 6am.
The weekly delivery program is also a 28-day plan, costing $36.95 per day, plus shipping and handling. Food is delivered on a weekly basis for four weeks, and the price includes consultation with the coach. Seven days of food (three meals and one snack per day) are delivered each week for four weeks. The food is packaged using a cutting-edge U.S.D.A-approved technology that keeps the food completely fresh, while significantly extending its shelf life. Fresh Food Delivery runs the service on behalf of Atkins International. The daily programme is available in the New York and California metropolitan areas, with the weekly plan rolling out in those areas as well as most large U.S. cities.
These are high-value products and services that will bring about faster dieting results as consumers are contracted to buy a given number of meals. The home delivery plans help add revenue and increase brand awareness as well as recruit new dieters. The added support of a nutritionist-supervised coach enhances the Atkins brand’s appeal and goes some way to promote a sense of loyalty. The use of Atkins products as snacks within the programmes also introduces dieters to the products early, meaning they will be less likely to switch to rival low-carbohydrate products when they have finished the meal plan.
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Atkins and partners As the leading brand associated with low-carbohydrate consumption and the cachet of being directly linked with the Atkins diet, the company has recognised this highly marketable appeal by teaming up with partners in the foodservice industry. With convenience products and dining out continually on the increase in the U.S. (and in Western Europe), licensing the brand to top brands with global reach within the foodservice sector was a good way to spread awareness of the brand whilst meeting increasing consumer demand for low-carbohydrate food choices in the restaurant sector.
Themed restaurant chain TGI Fridays and sandwich company Subway were the company’s first partners in the United States. In December 2003, Subway launched two Atkins-branded and endorsed choices, the Turkey and Bacon Melt Wrap with cheddar and the Chicken Bacon Ranch Wrap with Swiss Cheese, after increasing numbers of its customers asked for low-carbohydrate options. The company’s president and founder Fred Deluca reported that customers were even asking for the bread to be scooped out of the sandwich baguettes, leaving a mere crust. Subway offers low-fat options in its stores and recognises that low-carbohydrate diets are not the only choice available.
TGI Friday’s clinched a deal to serve Atkins-approved meals in December 2003, which was well-timed to coincide with the brand appearing in Subway stores across the United States, accordingly linking a respected restaurant brand with low-carbohydrate eating. TGI Friday’s research showed that 19% of frequent restaurant visitors were following the Atkins diet, which represented a good opportunity for sales and brand awareness.
Atkins is meticulous about choosing partnerships, according to Tamara Richardson. Maintaining the brand’s integrity is crucial as it gains momentum within the market and choosing the right partners to enhance, not dilute, its values remains a priority. Mainstream partners; however, lend credibility to the science behind the diet and lowcarbohydrate diets as a whole, encouraging more take-up for the diet, while also building sales in other Atkins-branded areas. “We do not lend the Atkins name lightly,” asserts Richardson. 68
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Any caution from the company about over-expanding its number of licence-holders results from a desire to keep standards high. The company reasons that, as the lowcarbohydrate market increases in both foodservice and product sectors, maintaining high manufacturing
standards is going to
be difficult. Several low-carbohydrate
commentators are already lamenting the number of inferior and “junk” type food products racing onto shelves. Teaming up with major players, such as TGI Friday and Subway is part of the Atkins strategy to help shape the development and maintain control in this new, dynamic sector.
The flip side of co-branded relations Some analysts have expressed concerns about the limiting factors of an exclusive branding agreement with Atkins, citing that taking a more generic approach might be a healthier way to embrace the sector. Most agree that using the Atkins brand gains a company notice, however, as the foods available are therefore labelled clearly as diet products, it also limits their appeal to consumers following that diet.
Focus on the UK market Launching into the UK market was an important step in the company’s development – it is the region that most closely mimics U.S. trends and is Atkins International’s route into mainland Europe. The company researched the market from late 2002, according to senior vice-president, Tamara Richardson. Consumer demand has influenced its expansion, and according to the company, a small army of consumers in the UK have been requesting the products for years.
However, entering the UK with a relatively unknown brand into a fledgling sector in the UK required Atkins to move cautiously. It wanted to make sure its entry to the lowcarbohydrate market was at the right time, and that meant investing heavily in product development, whilst waiting for the Atkins brand to connect with consumers. The company also put together a dedicated team to launch the brand in the UK, aware of the cultural differences between U.S. and UK consumers. The company’s UK head is Roger
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Spicer, a former Cadbury-Schweppes executive with a firm grounding in the UK food manufacturing, marketing and retailing industries.
The re-launch of Dr Atkins’ New Diet Revolution came in summer 2002, allowing the UK public time to digest the brand and try the diet before exposure to the products. Educating consumers slowly about the benefits of low-carbohydrate products in the UK’s more sceptical environment was an important consideration. The diet, Dr Atkins, and the company itself were under intense, often hostile, scrutiny from the media.
Manufacturing As well as educating consumers for a softer launch, ensuring that product branding, quality and formulation was correct for the UK market was also a priority for Atkins International. To that end, the company sought manufacturers in Europe and the UK to make the products. Localised production for its range of food products now takes place in the UK and the Netherlands, at undisclosed plants chosen for their ability to provide state-of-the art product development facilities, the right equipment to enable massproduction with no supply problems and the all-important auditing standards of the major UK retailers. Although the products are not stocked in many supermarkets, they have nationwide distribution in Boots and the company needed to plan for multiple distributions, hence, its high manufacturing standards.
Shrewdly, the company chose manufacturers in Germany and Switzerland to manufacture its range of supplements, giving it a wider footprint over the European region and enabling it to expand rapidly, once future European markets have been identified. The company is reluctant to release plans for its next target markets, but the German and Scandinavian regions are thought to be ripe for expansion, with a growing number of receptive consumers already familiar with low-carbohydrate diet plans.
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Marketing The UK marketing campaign kicked off in January 2004 to coincide with the launch of the branded products. The campaign centred on the perception that following Atkins would mean a restricted diet. Strictly speaking this is true, as most people in the UK are regular consumers of the carbohydrate products, which are forbidden on the first stages of the diet, but the press and poster campaign aimed to show the wide variety of foods it was possible to eat and still lose weight. Using the strapline: “There’s nothing to eat on Atkins except…”, the nationwide print adverts showed pictures of the kinds of foods recommended on the diet, alongside the newly launched supplements, shakes and bars.
Positioning the branded products next to generic whole foods instils them in the minds of consumers early on, thus encouraging brand loyalty when it comes to purchasing specialist low-carbohydrate foods later on. In a new product sector, gaining consumer confidence in a brand or product early on is crucial to its continued success. It was also important for Atkins to take ownership of this new sector and be first to offer such a range of branded goods.
Atkins Nutritionals recruited media doctor Dr Sarah Brewer to become its spokesperson in April 2004 in a bid to present the diet to UK consumers in a way in which they could relate. Dr Brewer, a well-known commentator on nutrition and diabetes, now represents the diet in the media, but does not endorse the Atkins-branded products.
Distribution Distribution in the UK was also of paramount importance to the successful launch of Atkins products. Nationwide distribution in Boots has ensured the brand gets a firm footing on the high street and ensures ease of access. Placing the products in a highstreet shop with high levels of traffic and consumer respect was essential in the process of educating the UK public about Atkins. Boots counter staff were briefed about the products to ensure consumers had access to expert advice about them and the diet itself. In the wake of negative press coverage about the diet, the company wanted to ensure that advice was on-hand at the point of purchase. 71
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The company does not yet have any licensed foodservice partners in the UK, but is currently exploring options in this area. Product development in specific sectors, including breakfast cereals, is also underway for more Atkins-branded products to be launched in the UK. For example, company research indicates that breakfast is a time when most consumers miss their traditional high-carbohydrate meal of cereal or toast, so the company is keen to widen the choices to consumers eating at that time. The company is also due to launch a range of chocolate bars, branded Atkins Endulge in the UK in 2004.
Multiple activity and Atkins Distribution in other channels is taking longer to roll out. Apart from Asda, which is owned by top U.S. Atkins retailer Wal-Mart, the major multiples do not yet stock Atkins products, or those manufactured by other companies. Asda, which said it is aware of the negative coverage of the diet, is currently trialling Atkins supplements in 80 of its dispensing pharmacies throughout the UK to test consumer demand - the trial started in January 2003. It will also sell the full range of UK formulated Atkins products, but has no plans for a range of low-carbohydrate private label products. The company claims that the diet has had no effect on bread and potato sales, which have gone up at Asda stores, although it will not disclose figures.
The multiple supermarkets’ reluctance to embrace Atkins seems to boil down to a level of distrust in the core teaching of the diet – that the starchy carbohydrates that make up the bottom of the “food pyramid” are restricted in favour of fatty and protein-based products.
Sainsbury's Sainsbury's supports the current UK dietary guidelines that suggest including plenty of starchy rich foods, fruit and vegetables, with moderate amounts of lean protein and lower fat dairy foods. It states that carbohydrates such as bread, cereals, and potatoes provide energy as well as important B vitamins, iron and fibre so eating a low carbohydrate diet may mean diets are nutritionally compromised. The company’s 72
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website states that eating a well balanced healthy diet long term and taking regular exercise is the key to successful weight loss. The chain is reviewing whether to stock Atkins products or not, saying it wants to offer choice and products to cover every spectrum.
Tesco Although Tesco has modified its labelling to reflect consumers’ growing interest in the glycaemic index of foods, it does not stock Atkins-branded products and will not disclose any future plans on the low-carbohydrate food sector. The company said adding label clarity enables consumers to make their own choices about the food they eat.
Safeway (Morrisons) Safeway is also considering a similar step, with foods containing less than 10% carbohydrate being labelled as such. On-shelf labelling will mark out other lowcarbohydrate food choices, such as Michelob Ultra and the relevant products from its private label Eat Smart range.
Somerfield Somerfield does not stock Atkins-branded products and has no intention of developing any low carbohydrate private labels. Branded products are under consideration for the future if public demand increases, in the same way that the company handles other diet products, such as WeightWatchers from Heinz. It does not endorse any particular diet apart from a healthy balanced one but wants to offer its customers choice.
Waitrose Waitrose does not market or produce any specialist low-carbohydrate foods or stock branded variants and has no plans to do so.
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Marks and Spencer Although it does not stock Atkins-branded products, Marks and Spencer has an extensive range of low carbohydrate products in store, with over 130 products in the deli, meal solutions, prepared salads and food to go areas, all prominently displayed.
M&S has set criteria for “low carbohydrate” of less than 10g of carbohydrate per portion, and has labelled all its existing foods that meet this measure, to make it easier for customers to find the foods in store. The company has already made a commitment to low carbohydrate meals and had a number of new product launches, for example in April 2004 it launched a range of new omelette wraps. A planned June 2004 launch is set for five new meals in the Steam Cuisine range and the company is also introducing a new low carbohydrate loaf.
Superdrug Superdrug recognises the new popularity in low-carbohydrate products and sells products from the Carbolite range of low-carbohydrate confectionery. It also sells the Seven Seas Low-Carb Diet Support capsules, although it does not stock Atkins products. Superdrug does not manufacture any private label ranges to supplement its branded stock.
Holland & Barrett Holland & Barrett stocks the entire UK range of Atkins products. The products are also found in a number of independent health food stores.
Atkins UK has stated that it would rather the market grew slowly in the UK and puts the integrity of the brand ahead of rapid expansion. It sees a long-term education programme as essential to consumers understanding the products and low-carbohydrate lifestyles safely and properly, as well as enhancing the Atkins brand.
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Atkins products currently available in the UK The company launched a select range of products in the UK on January 5, 2004. Atkins Advantage Bars – made with soya. Chocolate Decadence, Hazelnut Crunch, Fruits of the Forest, 60g, £1.79 (18-22g protein, 2-3g net carbohydrates). Atkins Advantage Shakes – chocolate, strawberry, vanilla, 330ml ready-to-drink, £1.87 (20g protein, 2g net carbohydrates). Atkins Advantage Shake mix – strawberry, chocolate and vanilla, 10-serving tub £11.69. Atkins Morning Shine breakfast bars – Apple Crisp, Strawberry Crisp and Chocolate Chip Crisp, 37g, box of 5 - £4.99, (2-3 g net carbohydrates). Atkins Quick Quisine bake mix – 500g tub, £8.99, made with wheat proteins instead of flour. Atkins Endulge bars – launched May 10, 2004. Milk Chocolate Wafer (28g, 3g net carbohydrates), Milk Chocolate Mint Wafer (28g, 2g net carbohydrates), Milk Chocolate Caramel Wafer (24g, 4g net carbohydrates), Milk Chocolate Bar (30g, 2g net carbohydrates), Milk Chocolate Crispy Bar with soy (30g, 1g net carbohydrates).
Supplements Atkins Basic 3 – vitamin supplements, £11.79 for 90 tablets. Atkins Essential Omegas – fatty acid mix from fish, borage and flaxseed, £11.79 for 60 tablets. Atkins Dieters Advantage – supplement designed to promote satiety, £11.79, 60 tabs.
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Atkins Accel – claims to help the body burn fat, £10.39, 45 tabs. Atkins 14-day starter kit – contains supplies of supplements plus instructions for following plan.
Case study: route to market - Atkins Advantage Bar This is the biggest-selling product for Atkins International. As the company’s first ever product line, Advantage bars were developed to capitalise on the already-buoyant meal bar market.
Atkins decided to include the bar in its launch strategy for the UK after following sales patterns from its U.S. website. Atkins UK managing director Roger Spicer estimates that the company had around 6,000 customers buying products from the online shop in the United States. Analysing sales data from those individuals showed the Advantage bar was on the “most-wanted” list for carbohydrate-controlling UK consumers.
However, launching the product in the UK was not just a question of shipping the bars over from the United States. Launching Advantage bars in the UK required complete reformulation to suit UK palates. The same scenario would have to be considered when launching such products in Europe, potentially on a country-by-country basis to take into account dietary and culinary differences.
As outlined earlier in this Chapter, there are three Advantage bars on sale in the UK: Chocolate Decadence, Hazlenut Crunch and Fruit of the Forest. Atkins UK managing director Roger Spicer researched manufacturing options in the UK to source a suitable manufacturer, recipes were tweaked and the first test products rolled out to focus groups across the UK. The low-carbohydrate chocolate taste and texture was reformulated to appeal to a UK consumer and the bar’s texture and mouthfeel adjusted
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specifically for this audience. Marketing and packaging is also significantly different for the Advantage Bar in the UK compared to the U.S. version.
What the future holds in store for Atkins The company sees itself as holding the crucial weapon against the western world’s continuing journey towards obesity. Fundamentally, Atkins International believes lowcarbohydrate foods are not just a good opportunity in the current climate, but that they could halt and reverse the global obesity epidemic.
Growth will come in the form of continued product development, high-level partnerships with companies operating in different sectors, including foodservice and retailing, continued expansion into new global territories and the quest for more conclusive research which may persuade medical authorities to take low-carbohydrate diets more seriously.
It was thought by some that the death of Dr Atkins would close one revenue stream for the company – its publishing arm, but has it? The company has in fact just published a dedicated UK cookbook. Although it has recruited Dr Sarah Brewer as a UK medical spokesperson, there is a personality gap in the United States. The “one-on-one” relationships with consumers, largely created by Dr Atkins’ range of books and his highly marketable personality, are important to the growth of the brand. Some commentators feel that the diet and company will no longer be able to capitalise on Dr Atkins’ personality or thinking in order to tweak its format, leaving the diet plan vulnerable in a constantly changing culture.
Already, there are personalities ready to step into his shoes – this spring saw the launch of The Hamptons Diet, a book written by former Atkins Center employee Dr Fred Pescatore and dubbed the “heir to the Atkins throne” by a fellow author of a low-
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carbohydrate diet plan. Keeping a firm grasp on the diet that started the trend will be an important task for Atkins Nutritionals.
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Chapter 4
Who or What is Driving Growth in the LowCarbohydrate Sector?
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Chapter 4
Who or What is Driving Growth in the LowCarbohydrate Sector?
Summary According to Atkins Nutritionals, an estimated 50 million Americans have either tried or are following a low-carbohydrate diet. 3.4% of all new foods and beverages introduced to the U.S. market in 2003 were designed to be marketed as low-carbohydrate products. Atkins International is validating the marketplace through large research and NPD budgets and licensing, paving the way for big players such as Heinz, with its OneCarb ketchup and Unilever, with its Carb Options range of branded food products, to break into the market. The mass stocking of low-carbohydrate products has been largely down to consumer demand rather than instigated by the manufacturers, and retailers’ backing of low-carbohydrate foods has occurred by witnessing the take-off of diets amongst their customer base. Wal-Mart, the word’s biggest retailer with 1.5 million employees, is a crucial distribution channel for low-carbohydrate foods as its influence on consumers’ shopping behaviour is unrivalled.
Regions in low-carbohydrate food growth Learning from the U.S. – the state of the market The U.S. consumers’ love affair with Atkins is fuelling the growth of low-carbohydrate foods. According to Atkins Nutritionals, an estimated 50 million Americans have either tried or are following a low-carbohydrate diet. Some companies put this even higher;
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U.S. marketing strategy company The Valen Group claims its research shows that 59 million U.S. consumers are controlling their carbohydrate intakexix.
LowCarbBiz, a trade magazine specialising in the market, estimates that U.S. sales of low-carbohydrate products exceeded $15 billion in 2003. Research from Opinion Dynamics shows that 39% of the public is very or somewhat likely to fuel that market by buying a low-carbohydrate product in the next year - 17% very likely, and 22% somewhat likely. The Obesity, Low-Carb Diets and Atkins Revolution consumer survey, outlined in Chapter 8, shows the likelihood of UK consumers to purchase speciality lowcarbohydrate products in the next year. 11% of our respondents claimed they would consider buying Atkins-branded products, with 23% claiming they would consider buying Michelob Ultra, a low-carbohydrate beer.
It is not just consumers who are fuelling growth. Encouraged by their enthusiasm, U.S. manufacturers, retailers and foodservice players, as well as the media environment, are helping what was seen as a fad become mainstream.
New product development According to Productscan, a U.S. company monitoring new product development in the United States, 3.4% of all new foods and beverages introduced to the U.S. market in 2003 were designed to be marketed as low-carbohydrate products – 633 of 18,796. Furthermore, nearly half of all those products were launched in the third quarter of 2003, indicating how that year marked a step change in the growth pattern of the sector.
The growth in the sector over the last five years can be seen from the following figures.
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The Valen Group, January 19 2004
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Number of products introduced specifically marketed as low-carb The accelerating growth of foods with low-carbohydrate claims is interesting when the pattern is observed against the development of low-fat foods. From a peak in the mid1990s, the number of products launched every year into this sector gradually tailed off, but is now showing some signs of further growth.
Table 4.1: Number of products introduced specifically marketed as low-carb -% of all NPD Year 1999 2000 2001 2002 2003
Number of products 47 211 352 339 633
Percentage of all NPD 0.4% 1.5% 1.9% 2.1% 3.4% Business Insights
Source: Author analysis, Productscan
Number of products making low-fat, no-fat or reduced-fat claims Productscan analysts report the low-carbohydrate food trend as the latest thread of the existing macro-trend for food and drink products which make “better for you” claims or market their health benefits. The low- or no-carbohydrate claim is now at the forefront of this trend and shows every sign of growing.
However, it is notable that, unlike the low- and no-fat product sector, growth in the low-carbohydrate sector has come primarily from smaller companies, set up by enthusiasts of low-carbohydrate diets in direct response to their own and fellow lowcarbohydrate eaters’ needs. This is slowly changing, however. Atkins International is validating the marketplace through large research and NPD budgets and licensing, paving the way for big players such as Heinz, with its One-Carb ketchup and Unilever, with its Carb Options range of branded food products, to break into the market.
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Table 4.2: Number of products making low-fat, no-fat or reduced-fat claims Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Percentage of products 13.2% 17.1% 17.4% 16.4% 18.1% 25.2% 25.8% 20.1% 18.4% 14.9% 14.7% 10.4% 12.4% 13.7% (not complete year) Business Insights
Source: Author analysis, Productscan
Who are carbohydrate-conscious consumers? A few companies have compiled research into consumer behaviour in the United States in order to shed some light on the growing market for manufacturers who may be reticent about joining the market.
The Valen Group undertook research to find out how many consumers were moderating their carbohydrate intake or following a diet because it wanted to shed light on the emerging market. Its chief executive, Gus Valen, said: “It was difficult to make a business case when pressed by senior executives and our only response was ‘here’s our best guess’”.
Valen’s research was based on 2002 U.S. census figures and showed that 28.3% of U.S. adults were controlling their carbohydrate intake.
Research from other experts in the U.S. also serves to show the importance of this growing sector. Market research firm Opinion Dynamics surveyed 900 adult consumers
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in March 2004 and found that 12% of those surveyed were following a lowcarbohydrate lifestyle. Findings are also giving an indication that low-carbohydrate diets appeal more to upper-income people.
In December 2003 and January 2004, Opinion Dynamics’ surveys of a similar pool of individuals showed that 15% of consumers with a household income of over $75,000 p.a. were following such a diet. Indicating current growth, in March 2004, this had risen to 22% of those higher-earning consumers. In April 2004, this had risen again, to 49%.
Research also shows a clear age bias in the United States towards low-carbohydrate dieting – it is very popular amongst those between the ages of 46 and 64 and there is a low incidence amongst those over 65. U.S. minorities also expressed a greater interest in the diets than non-minorities, although they are no more likely to be on a diet.
Whilst there is equality between the sexes too when it comes to dieting; men are no more or no less likely to be following a low-carbohydrate diet than women are, women are more likely to purchase low-carbohydrate products than men, although the difference is not large – 41% to 36%.
Where do they live? U.S. magazine LowCarbBiz recently researched the most developed areas of the country for low-carbohydrate food and diet take-up. The research showed that metropolitan areas such as Miami, Phoenix and Fort Worth Portland rank near the top, whereas cities in the traditional U.S. “breadbasket” are not yet as amenable to the lowcarbohydrate trend.
The magazine studied each U.S. market, finding the best examples of metropolitan areas, which offered good access to low-carbohydrate foods, including restaurants and retailers and those that had a positive general attitude towards the diet. The top 10 cities were: Dallas/Fort Worth, Indianapolis, Las Vegas, Miami, Los Angeles, New York,
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Phoenix, Portland, San Francisco and Seattle. Executive editor for LowCarbBiz magazine said: “We were looking for low-carbohydrate heaven”.
Opinion Dynamics has found that southern America is the most receptive to lowcarbohydrate food purchase and consumption, with 48% of consumers very or somewhat likely to consume products.
Low-carbohydrate food manufacturers: identifying the main players The sector is unusual because its first spurt of growth was not driven by development from large, multinational companies. Instead, growth, research and new product development has been dominated by a large number of relatively small companies, of which Atkins International is one. This is primarily because larger companies have been reluctant to invest too heavily into a market which has been, up until now, a decidedly niche one.
However, the “tipping point” percentage figure at which companies start investigating trends is 10% – with an estimated 12% of the U.S. population now regularly eating lowcarb foods, this is becoming an urgent line of investigation for most mainstream food companiesxx. It is likely that this sort of trend line will be implemented by European food and drinks companies when deciding in the next year or so whether to sit up and take notice of the low-carbohydrate consumer driver.
xx
Opinion Dynamics - focus groups amongst U.S. food manufacturers to assess their opinions to the
low-carbohydrate market, 2003
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As well as Atkins, brands that are now setting the agenda in low-carbohydrate food development in the United States are: Keto (sauces, confectionery, bake
Expert Foods (desserts and
mixes, prepared foods, desserts,
ingredients);
condiments); DaVinci’s (drinks and condiments); Carbolite (chocolate confectionery, Walden Farms (sauces and
snacks);
dressings); Carbsense (baking products, Darielle (pasta);
snacks);
DietRite (carbonated soft drinks);
Carbophobia (baking products);
Hansens (carbonated soft drinks);
Aunt Paulas (baking products);
Cavalier (chocolate confectionery);
Pure Delite (chocolate);
LowCarbolicious (pizza);
Flaxomeal (baking products);
MiniCarb (bake mixes);
Dietline (supplements, prepared foods, confectionery, shakes,
Jok N Al (condiments);
soups); Heritage family (condiments and Torras (sugar confectionery);
sauces); Steels (sauces).
This is by no means a comprehensive list, but it serves to show how smaller companies and brands are driving growth in this sector. They are now being joined by brands from multinationals such as Unilever, General Mills, Hain Celestial and Heinz, to name but a few.
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However, in order to sustain growth and consumer interest in the low-carbohydrate food sector, investment needs to be made in R&D and technical areas of NPD. This will limit significant brand and product development to the small minority of companies who can afford to invest in the necessary facilities and staff in the same way that multinational companies can. Successful, well-known brands within the low-carbohydrate sector face possible acquisition by bigger companies with more money and resources looking to enter a market which is still perceived as high-risk and dogged by scepticism with a tried and tested brand or product. Consolidation is set to reduce the number of companies operating, although it will boost the market overall.
Apart from Atkins, this report, in its analysis of the low-carbohydrate diet trend in general, will consider in detail the operations of Keto Foods and Carbolite. Both take leading positions within the low-carbohydrate sector and have been instrumental in driving its growth.
Focus on Keto Keto manufacturers a wide range of low-carbohydrate prepared foods, condiments, baking goods, consumer ingredients and staple products. All products are marketed under the Keto brand name. The company strapline is: “Live low-carb and still eat your favourite foods!”. It is privately owned and was established in 1997 as a manufacturer of nutrient supplements.
Its business objectives changed when its chief executive and staff followed a lowcarbohydrate diet in 1998. Missing their favourite foods, such as bread and pastas, the company’s employees decided to investigate ways in which they could be formulated to contain lower levels of carbohydrate. The first products were shakes, muffin mixes syrup, bars, tortilla chips, cold and hot cereals, pastas and Ketatoes, a mashed potato mix, which retailed through specialist health food stores.
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The company now claims a product range of 140, covering a wide range of sectors and selling through a 20,000 network of retailers across the United States. It has experienced a 300% growth in the past year, with wholesale sales topping $100 million and retail taking around $200 million, although the company will not offer a financial breakdown. The company operates a catalogue and website and is also available outside the UK through the Internet.
Its best-selling products are its range of pastas and baking goods, precisely the kind of high-carbohydrate foods which dieting consumers miss most of all. Fast-growing product sectors include ice cream and the company is currently seeking manufacturing, marketing and distribution of its branded low-carbohydrate product in the UK.
Keto sees itself more as a research company than a manufacturer and recognises the importance that taste has on the development of the low-carbohydrate sector. Its chief executive and chairman, Arne Bey, said that unless manufacturers invest heavily in NPD and ingredient technology and ensure products which are to be marketed as lowcarbohydrate options taste, look and feel as good as their conventional equivalents, the market will remain niche. He added: “Consumers will vote with their taste buds, and low-carbohydrate brand supremacy will be determined by those consumers”.
The company employs a high number of R&D specialists to ensure that its primary mission to make low-carbohydrate foods which “walk, talk and taste” just like highcarbohydrate foods is fulfilled. It has seven U.S. and foreign food technology patent applications under development.
The company’s next big push will be its rollout in nationwide Wal-Mart stores. Currently, the company is unable to fulfil the retailer’s demand for product, but this is under development. Keto also has plans for distribution outside the U.S. for products apart from its ice cream.
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Like Atkins, Keto is encouraged by the entrance of big players into the market, due to their legitimising influence to consumers and investors alike.
Focus on Carbolite Established by two former soft-scoop ice-cream distributors in 1992, Carbolite has carved a niche for itself developing low-carbohydrate chocolate and sweets, along with a growing portfolio of other products. Like Atkins Nutritionals, the company has distribution in retail outlets in the UK, making it influential in the development of the low-carbohydrate food sector there. It also has distribution in Canada and sells products through a website, operating a loyalty scheme for frequent customers, which enables it to track purchasing behaviour.
The company’s aggressive marketing of low-carbohydrate food coincided with the mass take-up and marketing of low-fat products in the mid-1990s. The founders, Gerry Morrison and Jeff Greder, built up their portfolio of ice-cream and sweet products based on consumer behaviour – the products sold well to people who were beginning to take notice of the many books on low-carbohydrate diets starting to crowd the bookshelves.
A receptive consumer base was formed from dieting consumers who were clearly failing to follow a low-fat diet, and non-dieting consumers who were attracted to the products by taste alone. The company was undaunted by the risks involved in developing foods for the low-carbohydrate dieter, especially as the diets were not just relatively unknown but flew in the face of established medical thinking.
Carbolite immediately sought to launch a line of functional foods for low-carbohydrate dieters, such as bread and baking mixes and soya-based shakes, but realised that consumers wanted more decadent products. It invested heavily in R&D, insisting that the taste of any product was paramount once its functionality had been developed and
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launched a range of chocolate bars in 2000. Now, its range includes low-carbohydrate protein shakes and biscuits as well as sweets and ice cream.
UK distribution A range of chocolate bars and crisps are now available in the UK, distributed through Retail Brands, which followed the low-carbohydrate market closely from 2001. The company reports a seismic shift in consumer demand in the United States, which smaller manufacturers such as Carbolite have been quick to exploit. It also observes that UK consumers and companies are more sceptical of low-carbohydrate diets, which increases the risk of entering the market significantly.
Retail activity in the U.S. – path to growth for low-carbohydrate food and drink A variety of factors have accelerated the growth of low-carbohydrate diets in the United States and these will also have a direct input into the growth of the UK market and potentially the rest of Europe. The sector first experienced growth through a wide network of specialist health food shops and independent retailers, choosing from a wide variety of small, local manufacturers to satisfy consumer demand.
There are now entire stores dedicated to low-carbohydrate products, often found in built-up metropolitan areas where take-up of the diets is high. Two such examples are privately owned Castus Low-Carb Superstores and Pure Foods, both based in California. Castus is the biggest independent chain of low-carbohydrate foods stores in the United States, with 13 stores. Its founder aims to have 200 shops operating in 13 states across the country by the end of the year, staffed by those who know about the diet and the products. It adds value and combats the competition by offering consumers special events and facilities in-store. Pure Foods is establishing its niche by concentrating
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on upping its five-strong stores in the area to vending machine distribution and manufacturing prepared foods for distribution to grocery chainsxxi.
Multiple retailers Recent research from Information Resources shows that sales of snacks and drinks marketed in the U.S. as low-carbohydrate in the food, drug and mass channels were $334 million for the year up to June 2003. This compares with $79 million for the year in 2000 and does not include the sales figures from Wal-Mart, the country’s biggest retailer.
This highlights that bigger players have recognised the benefits of selling lowcarbohydrate foods. The mass stocking of low-carbohydrate products has been largely down to consumer demand rather than instigated by the manufacturers, and retailers’ backing of low-carbohydrate foods has occurred by witnessing the take-off of diets amongst their customer base.
Low-carbohydrate products are stocked by a large number of national and regional multiple food and drugstore chains including Wal-Mart, Walgreen, Albertsons, Shaws, Lowes Food, Food Lion (which is also considering stocking its private label products), Kroger, Safeway, Giant (owned by Ahold) and 7-Eleven.
7-Eleven launched a dedicated low-carbohydrate section in its stores in January 2004 after realising that more and more of its shoppers want to find these kinds of products without exploring an entire store. It has its own range, Better Choices, which includes the repackaging of old grocery staples such as beef jerky in a portable format for consumers following low-carbohydrate diets.
xxi
The Mercury News, April 11 2004
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Industry players claim that there have been two key drivers to low-carbohydrate. Walgreen, the U.S. drugstore chain, has raised its awareness amongst consumers, and Wal-Mart has given it volume. They predict that although no retailer has started private label yet, Wal-Mart will be the first to do so. The shape of the low-carbohydrate sector will be determined by the multiple retailers (only those with a financial and technological capability will fulfil their strict auditing processes), NPD and volume requirements, effectively shaving the market down to two or three key players from the myriad of brands currently on offer to consumers through a limited retail distribution or via the Internet.
It is likely that UK retailers (and potentially European retailers in the next two years) will display a similar growth pattern, starting to stock branded products such as Atkins, Carbolite and Keto to ascertain the strength of demand, before moving to develop their own ranges of low-carbohydrate foods. Competition for shelf space means that only highly visible brands with potential for further growth and innovation will be stocked – UK retailers need to ensure the products will sell, and keep selling.
The Internet Never before has the Internet played such a part in the growth of a new food sector. It has already been observed that the majority of low-carbohydrate dieters are relatively high-earning consumers, putting them into the category most likely to use the Internet. From disseminating information to ordering particular products that do not have terrestrial retail distribution, the Internet has been a key tool in educating consumers about low-carbohydrate diets.
The web has impacted hugely on the development of the UK market. Atkins Nutritionals has a dedicated UK website, where dieters can order products, download recipes and seek advice. Generic low-carbohydrate Internet shops have also boomed in the UK. One of many is Carblife, which started as an information site in July 2001 by lowcarbohydrate dieter Joyce Edmunds. Baffled by the terminology and seeking lowcarbohydrate foods that were unavailable in shops in the UK, Edmunds sourced an 92
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Internet store selling low-carbohydrate chocolate and bought it. Carblife’s turnover is £500,000 per year, which is gleaned from selling a large range of products sourced primarily from manufacturers in the U.S., including Atkins and Keto. The site also sells a range of supplements and other non-food items associated with low-carbohydrate dieting, including special sticks used to measure the amount of ketones being burnt by the body (for a full glossary of terms, please refer to Chapter 10) during lowcarbohydrate dieting.
Atkins Nutritionals’ website has branched out to become not just an online shop and marketing site for the Atkins diet, but also a major source of research about the benefits of low-carbohydrate eating. The company’s aim is to lead the way forward for low-carb eating research and information, consequently, the website has hundreds of pages of free, generic advice as well as the latest scientific learnings.
The Internet is not just a good marketing and sales tool for smaller companies to sell less well-known products where distribution is not comprehensive. It has also served to fan the flames of low-carbohydrate dieting and foods by linking enthusiastic consumers and introducing new ones. The plethora of free chat forums, where dieters offer advice and encouragement, are evidence of this in both the U.S. and UK.
Vending machines The first vending machines selling low-carbohydrate foods were rolled out by Pure Foods in the U.S. in March 2004 after the company’s co-founder reportedly woke up at 4am with the idea. The machines hold a total of 25 products including 17 snacks and eight chilled drinks and will stock products from the company’s own range as well as branded items such as Atkins Nutritionals’ Advantage Bar.
Pure Foods, which also has a number of low-carbohydrate stores, a food manufacturing arm and cafes specializing in low-carbohydrate foods, is negotiating with an unnamed hotel chain about placing machines in communal areas. It is also looking for other licensees within the United States. 93
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Foodservice Opportunities for eating out and sticking to a low-carbohydrate diet are well documented in the United States. Along with early-adopters such as Subway, Burger King and TGI Fridays with wraps and meals, there are now a plethora of restaurant chains embracing low-carbohydrate meals with or without Atkins-brand endorsement. Hardees, Denny’s and Wendy’s all have low-carbohydrate options on their menus, and recently have been cautiously joined by McDonalds.
Ensuring the following of such a diet is easier for the U.S. consumer out-of-home is a fantastic method of developing the sale of foods to be consumed in-home. Validating their choice of diet and providing the options they want to eat will pave the way for continued development.
Manufacturer activity The low-carbohydrate sector has been compared to a “cottage industry” by some of its players. Unendorsed by medical approval, the sector has been forced to innovate from within, satisfying enthusiast demand and growing slowly, mirroring the growth of lowcarbohydrate eating as a “way of life”.
The arrival of the Atkins Diet has changed that. Now, with millions of U.S. consumers actively reducing their carbohydrate intake, there has been an explosion of activity. In the niche sector, companies such as Atkins, Keto and Carbolite have recognized the importance of taste as well as product formulation, investing heavily in R&D and new product development.
Atkins has recognized the power of marketing and has had to respond to the growing shift towards the generic. Although the vast majority of U.S. consumers who begin following a low-carbohydrate diet do so through the advice from one of Dr Atkins’ books, they now have a huge number of brands from which to select low-carbohydrate 94
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food options. Atkins encourages consumers to eat its products, but stresses that success in low-carbohydrate dieting is not a guarantee from that consumption. Conversely, the company claims that the number of players now active within it could compromise the sector’s growth and reputation.
The entrance of big players such as Unilever, with its Carb Options range, Heinz and One-Carb ketchup, Sara Lee with a range of low-carbohydrate bread and PepsiCo with Doritos and Pepsi Edge is a sign that low-carbohydrate foods are an opportunity for global manufacturers with the financial and brand power to enter the market at relatively low-risk.
Case study: Wal-Mart Wal-Mart, the word’s biggest retailer with 1.5 million employees, is a crucial distribution channel for low-carbohydrate foods as its influence on consumers’ shopping behaviour is unrivalled. The company has 4,800 stores, 75% of them are located in the United States. Its international expansion is continuing and is now the top retailer in Canada and Mexico, owns 38% of Japanese supermarket chain Seiyu, Asda in the UK and has other operations in South America, Asia and Europe.
Wal-Mart said that it considers its first duty to be responding to consumer demand and as such, recognises that many of its customers are seeking low-carbohydrate options. In January 2004, it set aside a part in each of its stores, specifically for low-carbohydrate foods. In its Supercenter stores, this was included in what Wal-Mart terms its “Action Alley”, and comprises a 16ft product display fixture. However, products were dual-sited throughout the store, enabling consumers to locate the products in whichever way was most convenient. It also provided shoppers with two opportunities to buy and introduce new consumers to the sector. In the chain’s smaller, general merchandise stores, a similar dedicated fixture, albeit smaller, was established. Both dedicated fixtures were in play for only a limited period; the company found that shoppers preferred to find low-
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carbohydrate foods alongside their conventional counterparts. Stores now stock items in overall product categories.
The company carries a variety of low-carbohydrate prepared foods such as Atkinsbranded products, sugar-free chocolate and sweet brands from Russell Stover and Hershey, brand-unspecified (but not private label) ketchups, sauces and condiments, pastas, snacks such as bacon rinds and dried meats. Product listings are unique to each store, reflecting customer demand. No sales data was available at the time of writing.
Private label low-carbohydrate options are under consideration by Wal-Mart. It states that although it is a brand-orientated company first and foremost, private label products form a crucial part of its business. It is actively looking into branding its own lowcarbohydrate foods, but will not specify further. The company is doubtless watching the market to ascertain which categories are proven best sellers and researching suppliers that could supply the chain with the volumes it would require to achieve national rollout.
Case study: How PepsiCo has embraced the lowcarbohydrate revolution PepsiCo has rolled out low-carbohydrate products across two of its major subsidiaries Pepsi Cola and Frito-Lay - in two major categories in the U.S. market – savoury snacks and soft drinks. The products: Pepsi Edge, Doritos Edge and Tostitos Edge, give the company a single, consistent brand which it could roll out throughout its other subsidiaries in America.
Pepsi Edge The launch of Pepsi Edge was announced at the company’s bottlers’ convention in March 2004. It will be a full-flavoured cola, but contain 50% less sugar, carbohydrates and calories than its regular Pepsi brand, with 70 calories per 12-ounce can, compared with 150 for regular Pepsi. Using sucralose and high fructose corn syrup will simulate 96
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the taste profile and mouthfeel of the product and it will be rolled out across the United States by summer 2004.
The company identified a market for the product through the number of consumers it recorded as being drinkers of both diet and regular Pepsi – 60 million people who were not committed to either product. Pepsi’s chief marketing officer, Dave Burwick, said that the number of so-called “dual users” has grown by 75% in the past two years, giving the new product a ready-made audience. Marketing the drink as lowercarbohydrate adds another consumer type to the target audience. “The time is right, the proposition is strong and everyone we’ve talked to is ready for this idea,” said Burwick. He is planning a myriad of advertising and marketing support for the rollout in the United States.
The product’s taste will be key to attract consumers who choose regular Pepsi over Diet Pepsi, according to U.S. analysts. They say Pepsi’s challenge will be keeping regular cola drinkers in the category instead of switching to other beverage alternatives. The key is taste, as regular cola drinkers are unlikely to sacrifice taste for 50% fewer caloriesxxii. PepsiCo’s foray into mid-range colas is not new, the company introduced Pepsi One, a one-calorie drink, and Pepsi XL, a 70-calorie mix, in the 1990s, but both were unsuccessful.
Although taste testing led the company to launch the product, it has yet to find out whether sales of Pepsi Ultra will cannibalise its other brands, Pepsi and Diet Pepsi. Adding consumers and taking share from other players, will be the focus of the brand. Coca-Cola also looks set to launch its own brand to the sector, Coke Ultra, in order to combat defecting consumers from its own diet and regular brands.
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Beverage Digest, March 9 2004
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Global low-carbohydrate market – territories for future development? Canada, UK, Israel, Australia and South Africa are pinpointed as being the most developed global territories for low-carbohydrate foods.
Australia Atkins and the low-carb diet trend have hit Australia, but the market remains relatively unexplored and niche at present. The National Health and Medical Research Council estimates that eight million Australian adults are overweight or obese. In 2003, there were an estimated 8,000 deaths from obesity-related illnesses such as type-2 diabetes, stroke, hypertension, and cardiovascular, gallbladder and respiratory diseases.
The Australian media has taken a strong interest in these statistics and methods of lowering the number of deaths and the number of obese and overweight people. On March 15, 2004, an Australian health minister unveiled a new campaign to raise consumer awareness about the potential dangers of high-protein and other fad diets. The plans involve educating the population with materials in doctors’ waiting rooms, gyms and universities. The information provided on these materials will consider the role of diets such as Atkins and highlight that there is currently no long-term effect information.
Natural Products Insider Research commissioned by worldwide communications giant WPP and health foods manufacturer Aussie Bodies confirmed that a shift to lowcarbohydrate was now evident in Australia, but not with the same intensity as in the US.
Research, conducted by Roger James and Associates, indicates that 26% of dieting women are practising some version of low-carbohydrate/high-protein dieting, up from
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18% in 2003. Of this figure, 2% are following the Atkins diet xxiii . By contrast, the number of women on low fat diets has decreased. Diets that are popular in Australia include the Zone diet and the South Beach diet. Also, the Australian version - ‘Total Wellbeing Diet’.
The Atkins products are sold in Australia through the GNC-Livewell Health food chain and the Australian website lists all locations of this distributor across the country. Aussie Bodies, a rapidly growing, Australian-owned company dedicated to nutrition, has launched the first domestic product to market. They are carb-reduced protein-boosted bars, flavoured milk drinks and meal replacement supplements and are branded under the Trim sub-brand.
Europe The UK is the most developed market for low-carbohydrate foods in Europe, as it mirrors the U.S. the most closely. Retailers and manufacturers are likely to seek marketing opportunities here before moving into other territories.
Territories displaying good potential for the sector’s development in Europe include Germany, Switzerland and Scandinavia. France, Italy and Spain currently show less potential for adoption and growth.
Germany German health food stores stock a range of products from low-carbohydrate food manufacturers such as Atkins, DaVinci and Keto. Internet shops such as www.supermass.com, www.low-carb-shop.de and www.lowcarbladen.de are prevalent. Mainstream terrestrial retailers have yet to enter the market, apart from Wal-Mart and
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Lidl. Consumer support for low-carbohydrate diets is also evident by monitoring Internet chat forums and support sites. Atkins and South Beach Diets are popular in Germany, which also has its own homegrown low-carbohydrate diet plan, Die GlyxFormel (the Glyx Diet).
German airline Lufthansa is launching a test range of low-carbohydrate meals on flights between Los Angeles and the country, making it the first airline to acknowledge the demand for low-carbohydrate food. The trial, starting in July 2004, will last two months, enabling the company to assess consumer reaction and other potential routes. It is working with its existing catering supplier in developing the three-course meals.
Italy Various low-carbohydrate pastas now available in the United States, such as Darielle, are imported from Italy, showing that the country’s producers of its staple, synonymous foodstuff are very much aware of the growing trend.
A conference in Rome, in February 2004, saw scientists and pasta manufacturers discussing the benefits of pasta within the diet, even a low-carbohydrate one. They argued that the glycaemic index (which measures the effect of the food on the body’s blood sugar levels) of pasta is considerably lower than that of rice and potatoes, making it an acceptable product for those consumers seeking to lower their carbohydrate intakexxiv.
There is little evidence to show that Italian consumers in general are embracing lowcarbohydrate lifestyles.
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Washington Post, March 6 2004
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Chapter 5
New Product Development: A Lesson in Innovation and Caution
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Chapter 5
New Product Development: A Lesson in Innovation and Caution
Summary Currently in the United States there are no Food and Drug Administration (FDA) regulations on the manufacture and marketing of low-carbohydrate foods, leading to fears that product quality and integrity may be compromised. Hershey’s, a mainstay brand in the U.S. has developed 1gram, a range of lowcarbohydrate chocolate alongside its American Diabetes Association-approved range of sugar-free chocolate. Calling for low-carbohydrate snacks in the U.S. has seen an upsurge in sales of an unexpected savoury snack favourite - pork rind. Home delivery of fresh-prepared meals is a sector, which is experiencing increased popularity in the U.S. and the UK – as consumers grapple with getting started on low-carbohydrate diets, they can rely heavily on authoritatively prepared meals. General Mills has launched a “light” version of its existing soymilk brand, 8th Continent, in a bid to encourage consumption of the core brand. The company claims soymilk is an ideal option for consumers who have cut carbohydrates, as it is recommended by the FDA as part of a diet to help reduce cholesterol. Anheuser-Busch was quick off the draw when it launched Michelob Ultra in the UK in August 2003, but the company had already seen a steady take-up of the product in the United States, giving it the confidence to launch in the UK before any of its rivals.
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The depth and pitfalls of the potential lowcarbohydrate food sector The market for creating low-carbohydrate foods with the same taste and mouthfeel profile as their conventional counterparts is huge and as yet relatively unexplored. Consumers are currently looking to smaller manufacturers with principally new brands for their needs in many different sectors, giving large companies with well-known brand names an opportunity to leverage their popularity in what will be a growing sector.
The crucial factors of taste and formulation However, the crucial factors for those considering investing in the necessary R&D and NPD in the sector will be taste and formulation. Currently in the United States there are no Food and Drug Administration regulations on the manufacture and marketing of lowcarbohydrate foods, leading to fears that product quality and integrity may be compromised.
There appears to be a difference between products marketed with those lowcarbohydrate dieters in mind and products reformulated or repositioned for the benefit of mainstream consumers. Specialist low-carbohydrate manufacturers are tapping into a knowledgeable consumer-base already educated about how their food choices work. Marketing of these products focuses around product efficacy, results and taste, with packaging and branding at a less-sophisticated level.
Mainstream manufacturers and marketers working to attract those low-carbohydrate eating consumers to their brands must also take care not to alienate a mainstream audience perhaps unfamiliar with the diets. Marketing is focused around lifestyle and general health messages, using the branding and language that is consistent with existing and trusted products.
The clear signposting tactics of some companies, now using brand names that include “carb” in some form, serves to demystify the product and help consumers see 103
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immediately its core offering. However, the plethora of new brands could cause confusion amongst consumers unsure about consistency and functionality.
Re-packaging/labelling protein-rich products There are also cases of simple, protein rich products such as meats and cheeses being repackaged and marketed as low-carbohydrate options. Kraft Foods, which has yet to develop low-carbohydrate options in its myriad of cracker and prepared foods brands, is planning to stress the low-carbohydrate content of brands such as Oscar Meyer cooked meats and Planters nutsxxv.
The task of making low-carbohydrate products mainstream lies in continual new product development and widening the choices available to consumers, but only when the market in the UK has matured enough to ensure demand for products.
R&D or ingredients and manufacturing processes are also important if low-carbohydrate versions of western staples such as bread and cakes are to compete effectively alongside their original versions. Witness the difficulties of mimicking fat content in low- or zerofat products in sectors such as confectionery.
Products manufactured and marketed in the United States largely dominate the sectors listed and analysed here. The UK and European low-carbohydrate manufacturing market is still largely undeveloped and the majority of products available have been imported direct from the United States.
“This shift in America’s eating habits is unprecedented.” Lisa Klauser, Integrated Marketing, Unilever
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Business Week, January 18 2004
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Snacks This sector, comprising chocolate, sweets, biscuits and savoury products, has seen much development, as manufacturers have sought to provide consumers with access to their favourite categories of products. Traditionally loaded with carbohydrate and sugars, reformulating these products for the low-carbohydrate market takes effort and expense.
Chocolate Taking Atkins Nutritionals as an example, the company’s line of snack bars, chocolate and wafer bars are its best sellers. Other specialist manufacturers are also making inroads into the sector, including low-carbohydrate specialist Carbolite (covered earlier in the report) and Carblife, which markets a sizeable range of low-carbohydrate chocolate in the UK and uses Maltitol and soy lecithin as additives.
But it is not just the specialist players who have entered the U.S. market. Manufacturing giants Russell Stover and Hershey’s, two of the country’s most famous chocolate brands, are also marketing their own brands.
Russell Stover has a huge distribution range for its range of 16 low-carbohydrate variants of its core range, including Low-Carb All Occasion Basket, Peanut Butter Cups, Dark Chocolate Medallions, Chocolate Mouse Medallions, Chocolate Wafers, Milk Chocolate Medallions, Almond Medallions and Peanut Butter Medallions. As well as being a key brand for many U.S. consumers, the company has already established itself as a manufacturer of sugar-free chocolate for diabetic consumers and also makes a range of 25% calorie reduced chocolate.
Similarly, Hershey’s, another mainstay brand in the U.S. has developed 1gram, a range of low-carbohydrate chocolate alongside its American Diabetes Association-approved range of sugar-free chocolate. 1gram is available in Chocolate, Almond and Soy Chip varieties, and bars are formulated using sugar alcohols and fibre instead of sweeteners
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and starches. The bars are not endorsed by any low-carbohydrate diet, but the company advises consumers on how to incorporate them into their diets.
These companies are able to build on consumers’ existing trust in their brands to offer low-carbohydrate varieties and advice to confused consumers. Investing effectively in NPD and research and development has also ensured that they do not alienate those consumers through product inferiority.
Savoury snacks The vast majority of US consumers eat salty snacks, accounting for the industry’s $21 billion annual worth. The sector is well associated with innovation and the shift towards healthier products, meaning it is well placed to capitalise on consumers’ hunger for lowcarbohydrate products.
The largest sector of the snack-food market in the U.S. is crisps, with annual sales of $6 billionxxvi. Pepsi-Co’s Frito-Lay division has dominated innovation in the mass market, although low-carbohydrate specialist Keto offers a low-carbohydrate nacho flavour tortilla chip in a 113g pack size, with 4g of carbohydrate per 28g serving. Ingredients include soy protein isolate, soy bean oil, soy bean concentrate, soy fibre and corn meal. The product is available in the UK via Internet channels.
Carb Solutions has a range of two tortilla snacks, marketed as high-protein, available in cheese and barbecue flavours.
Hain Celestial Foods has also entered the market with a range called PureSnax and marketed under its Carb Fit brand. It manufactures Cheddar Cheese Puffs, Pretzels,
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Information Resources
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Salted Soy Nuts, Red Hot Soy Nuts, Nacho Soy Twirls, Ranch Soy Twirls and Tortilla Chips.
Doritos Edge Frito-Lay has been quick to realise the importance of the low-carbohydrate sector as a diet trend, but also its relevance to the U.S. obesity problem. The company removed trans-fats from its range of crisps and snacks in 2003, claiming to have removed some 50 million lbs of trans-fats from the diets of U.S. consumers. The move demonstrated that the company recognised the importance of innovating its brands against a background of health concerns from consumers and government. PepsiCo is reaping the benefits of such a tactic in increased sales, up 7% to $27 billion in 2003, and a healthy share pricexxvii.
Figure 5.2: Doritos Edge
Business Insights
Source: Author research
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Forbes.com, April 2004
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The Doritos and Tostitos Edge brands have less than 50% of the carbohydrates found in the regular variety and have been made using soy proteins and fibre to substitute the reduced carbohydrates.
Doritos Edge has trialled in a test market of Phoenix, Arizona and will be rolled out nationwide by April 2004. The company is not concerned about possible cannibalisation from its other brands, saying that incremental growth will be gained for the two brands. Combined sales in the U.S. are currently $3 billion.
Frito-Lay will not be drawn on whether other brands in its portfolio will also be produced in a low-carbohydrate format. “Innovation fuels our business and we're committed to delivering the type of innovation that continues to grow both our base business as well as our better-for-you business, “ said Stephen Quinn, chief marketing officer, Frito-Lay North America, adding that offering different nutritional formats would encourage more consumers to buy the brands.
Other savoury snacks Meat-based Consumer demand for low-carbohydrate snacks has seen an upsurge in sales of pork rind, which showed the biggest growth amongst a range of low-carbohydrate snacks tracked by Information Resources. For the 12 months to October 2003, nationwide sales of pork rind jumped by 27%; the figures for the year to January 25, 2004 showed sales in U.S. grocery and drug store channels had jumped 39% from the year before to $125 million. The U.S. Snack Food Association puts the size of the pork rind market much higher, based on the number of consumers buying the snack online or through unaudited stores. The popularity of the snack boils down to its taste and mouthfeel – it is a high-fat snack, with a good taste profile and crunch making it quite unlike the majority of diet products.
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Frito-Lay owns the Bacon-ets brand, which had sales of $39 million in 2003xxviii, but there are an estimated 50 other established brands in the United States. Rudolph Foods supplies most of these, including Bacon-ets, with product, and recently expanded its Dallas plant to keep up with consumer demand. The company now has six plants in the United States and one in Mexico.
New innovations include different flavourings such as Cinnamon, Cheddar and Chipotle Lime pork from smaller U.S. brand owner Gram’s Gourmet. The company started in May 2002 and expects to make $3 million in 2004 from sales of pork rinds.
The main UK brand player is Mr Porky, owned by Continental Foods subsidiary Red Mills Foods. The brand has national distribution in retail and pub outlets and reports to sell 20 million packs a year.
Dried meat and jerky products are also selling well in the U.S. as a snack choice for low-carbohydrate dieters, and are seeing something of a revival. Smaller brand owners in the U.S. such as Toxic Tommy’s Beef Jerky and Spice Company have seen huge growth sales, which increased ten-fold between 2002 and 2003.
Soy-based Soy-based snacks are also gaining momentum, with several smaller players offering products. One is Zumbro River Brand, which introduced a range of soy snacks under the Getmor brand name. The products come in Herb Garlic, Jalapeno Cheese and Tamari Sauce flavour and are also marketed as gluten-free and low-calorie. CarbSense also markets a range of tortilla chips in Nacho Cheese, Pico De Gallo and Multigrain varieties.
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Information Resources
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Ready meals and prepared foods In the mainstream market, development has been headed by Heinz in the United States, with the company planning low-carbohydrate versions of its U.S. brand Smart Ones frozen ready meals. The company, which has embraced low-carbohydrate offerings in other sectors, indicated that its Ore-Ida range of potato products would also be developing low-carbohydrate additions. There are no plans for low-carbohydrate products in the UK as yet.
Another mainstream player is Hain Celestial, which has launched pastas, sauces and vegetarian low-carbohydrate dishes under its Carb Fit brand. There are four varieties of pasta and sauces and a five-strong vegetarian range.
General Mills is launching a low-carbohydrate instant mashed potato line to its Betty Crocker portfolio under the Carb Monitor brand, available from August 2004 across retail channels in the United States. The product contains 27% fewer carbohydrates than General Mills’ standard brand and contains 16g “net carbohydrates”. The company has also launched Carb Monitor in its Hamburger Helper range of dinner options, with the Cheeseburger Macaroni variant.
Specialist manufacturers in the U.S. are driving growth and innovation too – Carb’Tastic manufacture a range of ambient ready meals including Penne Alfredo, Vegetarian Pesto Primavera and Vegetarian Chili Mac as well as shakes and meal supplement bars. The pasta is manufactured from soy flour and isolates.
Fantastic Foods, a brand of HomeGrown Natural Foods, offers a range of low-carb ready meals and meal snacks, developed with soy protein and designed specifically to “go beyond” the traditional diet foods of shakes and bars, according to chief executive John Foraker.
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The low-carbohydrate Quick Meal Cups include Vegetarian Mandarin Chicken, Hot and Sour, Asian Ginger Broccoli, Shiitake Mushroom, Vegetarian Chicken & Sausage Gumbo, Sun-Dried Tomato Basil, Broccoli & Cheddar, and Vegetarian Beef with Barley. They were rolled out in December 2003. The Fast Naturals ready meals include Creamy Alfredo, Spaghetti with Meatballs, Pesto Primavera, Chili Mac, and Teriyaki with Soy Pasta, and were available from February 2004 in the United States. LC Homestyles has also developed a range of ambient microwaveable ready meals; Chicken Chilli with Beans, Beef Chilli with Beans and Beef Chilli with Steak and Beans.
Ambient meals Low-carb ambient dry meals are also developing. The Aramana brand has Cheddar Cheeseburger, Mild Mexican Chicken and Creamy Chicken Alfredo pasta meals, which need just water and cream to cook. Soup, a traditional dieter’s meal, is available in an ambient, add-water low-carbohydrate variant from Instant Gourmet in five flavours, and from MiniCarb in three variants.
Home delivery Home delivery of fresh-prepared meals is a sector, which is experiencing increased popularity in the U.S. and the UK – as consumers grapple with getting started on lowcarbohydrate diets, they can rely heavily on authoritatively-prepared meals. As well as Atkins’ At Home delivery service, Home Bistro offers a range of gourmet meals for delivery anywhere in the United States. Typical dishes include Chicken Stir Fry and Roasted Turkey Breast with low-carbohydrate stuffing.
Functional foods Atkins and Keto are prolific in the functional foods arena, but other players are also entering the market. Unilever brand Slim-Fast is taking the low-carb plunge, offering a line of shakes, meal bars, and snack bars “for a low-carb lifestyle”, as outlined in detail in Slim-Fast and Unilever’s “Path to Growth” on page 144.
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Rexall Sundown has added CarbSolutions, a line of low-carb products that includes candy bars, shake mixes, and ready-to-drink shakes.
Specialist nutritional company EAS has developed AdvantEdge Carb Control Energy Bars. The bars are available in a variety of flavours, including Blueberry, Lemon Cheesecake, Chocolate Chip Brownie, Cookies and Cream, Apple cobbler, and Chocolate Strawberry Mousse.
Sauces and condiments Heinz and Unilever have added multinational clout to this category, exploring the lowcarbohydrate market with well-established brands which most consumers have on their tables, whatever their dietary plan. Heinz One-Carb Ketchup has 75% less carbohydrate per spoonful – 1g per serving – and was launched in the U.S. in October 2003. There were no plans to launch the product in any other countries at the time of writing.
Unilever has rallied to the market with its Carb Options range, which consists of 18 products endorsed by some of the company’s best-known brand names in the United States: Ragu, Skippy and Wish-Bone. Products include marinades, ketchup, bbq sauce, teriyaki sauce, steak sauce and various other condiments.
The sectors covered are not confined to condiments and sauces, but also comprise drinks, functional diet bars and shakes, soups, side dishes and recipe mixes. Unilever has said that offering low-carbohydrate foods under the brands that consumers already know and trust gives them an edge over competitors. It also claims they are priced more reasonably than others on the market. The range was launched in January 2004 and Unilever asserts it was the first mainstream U.S. manufacturer into the market.
The company has enlisted a celebrity chef, Douglas Rodriguez, who introduced lowcarbohydrate meals to his New York and Miami restaurants, to develop recipes and engage consumers. Rodriguez is well known for raising the profile of minority groups
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and is one of the country’s best-known Hispanic businessmen, enabling Unilever to beef up its ties to this important U.S. consumer group.
Vice-president of integrated marketing at Unilever, Lisa Klauser, said feedback from consumers had beaten the company’s expectations and that plans were afoot to roll out more products in the range. “This shift in America’s eating habits is unprecedented,” she added.
Birds Eye is launching its first low-carbohydrate offerings as part of its Voila! range of frozen bagged meals, after its research showed that 38% of adults have adjusted their diets to reduce carbohydrate consumption in the past 12 to 18 months in the United States. The company also found that consumers wanted more balance between the food groups, and were shifting away from protein-only, sometimes high-fat options. Voila! variants include Down Home Chicken & Vegetables, Roasted Chicken & Vegetables, Chicken and Sausage Tuscano, Teriaki Beef &Vegetables and Chicken Teriaki & Vegetables. The 21oz bags will retail at just over $5 when on sale from April 2004.
Atkins, Steels, Keto and Walden Farms are also key specialist low-carbohydrate companies operating in the sauces and condiments sector, mostly available in the UK via the Internet. Atkins has not extended its UK product range to include its sauces and condiments.
Beanit Butter, a peanut butter substitute uses roasted soybeans instead of conventional peanuts and also contains ingredients including soybean oil and low-glycaemic sweetener, monosaccharide. Jam brand Stute is also marketing a range of low-sugar jams as part of its diabetic range, also suitable for low-carbohydrate eaters, with Sorbitol replacing sugar in the range. Flavours available in the UK are Orange Marmalade, Cherry, Apricot, Blackcurrant, Raspberry and Strawberry.
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Pasta Low-carbohydrate pasta is a healthy, growing sector in the United States, with a variety of brands now on the market. The market for conventional pasta is down, meanwhile, with American Italian Pasta recording lower sales and profits for the three months to April 2004. The company blamed the slow-down on falling pasta sales and claimed that carbohydrate-conscious consumers were eating less.
AIPC rallied in January 2004 with a range of low-carbohydrate pastas, containing 19g “net carbohydrates” per serving instead of its standard 39g, making it the first-in-sector with the five-strong range – spaghetti, lasagne, penne, rotini and elbows – appealing to the mass consumers trying to cut carbohydrates but reluctant to give up pasta. The launch of the range across seven regional brands - Mueller's, Golden Grain, R&F, Ronco, Martha Gooch, Luxury and Anthony's - was accompanied by a $15million marketing spend, encompassing radio, TV and press advertisements and in-store promotions, all using the strapline: “Pasta’s never looked so good on you”. Now available widely in U.S. retail channels, the company is also rolling out to foodservice operators.
Another key brand Monterey Pasta has rolled out its own line, CarbSmart, together with sauces, in 500 stores across the east coast of America. The sauce meals include Fettucine Classic Egg, Linguine Classic Egg, Four Cheese and Chive, Seafood Ravioli, Spinach Ricotta Ravioli and Spinach and Cheese Tortelloni.
Specialist pasta brands in the U.S. include Darielle, which boasts a lower carbohydrate count per serving of 10g “net carbohydrates”. Keto also manufacturers a range of lowcarbohydrate pasta, and both brands are available in the UK via the Internet. Also, Atkins supplies dry, soy-flour, pasta and prepared pasta meals to U.S. consumers under its Quick Quisine brand.
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U.S. analysts have cited pasta as a good entry to the low-carbohydrate market, saying that as demand currently far outweighs supply, it makes for a low-risk strategy for companies already in the conventional pasta sector to branch out.
There are no UK-manufactured low-carbohydrate pastas currently available in the UK, although brands from the U.S. are available for purchase over the Internet.
Bread, baked goods and cereals Bake mixes and bread products are all gaining momentum in the United States, with Atkins Nutritionals also selling its Quick Quisine brand in the UK via Boots and its website.
Manufacturing products normally consumed at breakfast is considered an important step for low-carbohydrate food development. Atkins Nutritionals admits it is working closely on launching a range of breakfast cereals to give consumers more choice at this key eating time.
Hain Celestial has a CarbFit Harvest Blend Instant Hot Cereal and smaller specialist companies have a plethora of brands on the market, some of which are available in the UK. FeelingOK has three varieties of cereal, Strawberry and Vanilla, Nutty and Apple and Cinnamon, all available in the UK.
Now bigger players, such as Kellogg, are entering the breakfast goods market. Its new Smart Start cereal contains soy protein, but is not marketed as a low-carbohydrate food. Also, its Morningstar Farms prepared foods subsidiary, part of Worthington Foods and acquired by Kellogg in 1999, has a range of vegetarian products with package labelling alerting consumers to their low-carbohydrate, lower-fat status. Products for breakfast include Better 'n Eggs, Veggie Breakfast Sausage Links, Veggie Breakfast Sausage Patties, Veggie Breakfast Bacon Strips, and the company also has a number of lowcarbohydrate ready meal options, including Burger Style Recipe Crumbles, Ground
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Meatless Crumbles, Scramblers, Better 'n Burger, Grillers Original, Grillers Prime, Harvest Burger Original, Sausage Style Recipe Crumbles, and Tomato & Basil Pizza Burger.
General Mills, which also owns the Yoplait brand, was a relative latecomer to the market, but hopes its Total Protein cereal will enable it to take a hold of the U.S. sector. The cereal contains 8g “net carbohydrates” and the company chose to develop the brand due its existing reputation with consumers as a nutritional cereal, according to marketing manager Peggy Stang.
The U.S. offers more variety in the bread sector, and Atkins Nutritionals also markets bake mixes in the following flavours: Banana Nut, Blueberry, Chocolate, Corn, Deluxe Corn, Deluxe Blueberry, Lemon Poppy and Orange Cranberry. The company has also developed Caraway Rye, Country White, and Sourdough varieties, all soy free and containing low glycaemic corn starch with wheat gluten as well as both casein and whey proteins, to get a realistic texture. The Low-Carb Chef, Keto and Carbolite also market bread machine bread mixes, as does Ketogenics, which has developed more added value variants in its Honey Wheat Pumpernickel Rye options.
As well as Atkins products, available in the UK are LC Bread Magic dry bread mixes, in a variety of flavours and a bread machine mix from Carbophobia. U.S. ready-made brands include Rudi’s Bakery, which markets two low-carbohydrate breads: plain and herb. Nature’s Own also has a bagged variant on sale in the United States.
Mainstream players are also beginning to enter the market, for example, Continental Mills is launching a range of Krusteaz CarbSimple low-carbohydrate baking mixes for muffins and bread. The company claimed to be the first national baking brand to market low-carbohydrate products when it launched in March 2004, but is now joined by Betty Crocker-branded baking mixes from General Mills. The four Carb Monitor brownie mixes come in Chocolate Chunk and Walnut flavours, the muffin mix is available in Wild Blueberry flavour and the cookie dough in Chocolate Chip. This range will widen the 116
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appeal of low-carbohydrate products in the sector for consumers familiar with the Betty Crocker brand. Available by the end of summer 2004 in the U.S., General Mills is planning a marketing campaign in the Autumn.
Case study: Nimble Carbs So Low Mainstream slimming brand Nimble has launched a low-carbohydrate variant in the UK, following qualitative and quantitative research that showed there was an opportunity to market a good quality, low-carbohydrate bread to consumers.
The company, owned by British Bakeries, found that 22% of low-carbohydrate dieters failed because they missed bread so much. Research also showed that the lowcarbohydrate bread on the market via the Internet were expensive, inconvenient and lacking in taste and texture.
The proposed brand name was successful in the research stage as well, according to senior brand manager, Marie Davies, with consumers associating it automatically with dietary bread. The name, Carb So Low, was also imperative, as the product was the first in the sector in the UK – consumers needed to know immediately what it was.
Figure 5.3: Nimble
Business Insights
Source: Author research
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A bread containing 25% less carbohydrate than standard Nimble white was developed. Carb So Low has 7.6g of “net carbohydrates” meaning that even dieters on the strictest phase of a diet such as Atkins could eat two slices a day and be within their carbohydrate limit. The balance of wheat within the product was reformulated to remove the starch element and increase the fibre. No sweeteners are used.
It was launched in mid-January 2004, with listings in the major supermarket chains including Tesco, Asda, Sainsbury, Morrisons, Safeway, Co-op, Somerfield and Kwiksave, which is a high distribution take-up for a new product in an unproven sector. Currently, the company has limited market data to suggest how the product is doing, but is claimed to have been overwhelmed with anecdotal responses from consumers. It also reports the bread now currently holds a joint third place in its portfolio of four products, performing on a par with Amazing Grain, which has been on the market for six years and is a well-established product.
Marketing activity has focused around word of mouth and sampling, Marie Davies said that encouraging consumers to trial the product and recommend it was a more fruitful activity than mass-consumer advertising campaign. On-pack promotions, and retailer pricing initiatives have supplemented the sampling activity, in stores around the UK, as well as other outlets such as farmers markets. The company is also considering selling to foodservice companies and initiating cross-deals on other low-carbohydrate products, such as bacon or cheese, adding value and recognition to the brand.
British Bakeries is keen to point out that the launch of Nimble Carb So Low is not an indication that it advocates a low-carbohydrate diet. It wants to encourage bread consumption within a healthy balanced diet, but acknowledges that consumer choice is also important, according to Davies. “We know we will have competition in this market very soon, and we welcome that. Consumers will vote with their taste buds.”
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Dairy and desserts Cheese, cream and butter are well-documented as acceptable foods for consumers following low-carbohydrate diets, but ingredient and marketing innovation has centred on producing ice-cream, yogurt and dessert-type foods with a low-carbohydrate content.
Low-carbohydrate milk, with milk sugar (lactose) removed and replaced with a sweetener, has been developed by specialist manufacturer Keto in ambient powder form, but is also available ready-made in chiller cabinets. FDA regulations dictate that this product cannot be called milk. One brand is LeCarb Dairy Drink, manufactured by Southwest Dairies, which is sold in three varieties, Whole, 2% LowFat and Chocolate, and has nationwide distribution through Wal-Mart.
General Mills has launched a “light” version of its existing soymilk brand, 8th Continent, in a bid to encourage consumption of the core brand. The company claims soymilk is an ideal option for consumers who have cut carbohydrates, as it is recommended by the FDA as part of a diet to help reduce cholesterol.
Ice cream The race to formulate a viable ice-cream product has been hot in the U.S., with many companies leaping to the challenge. As well as Carbolite’s version, which it is looking to market to UK consumers soon, Ben & Jerry has entered the market with a range called Carb Karma Ice Cream. There are three flavours in this range: Chocolate, Half Baked (filled with brownie pieces and chocolate chip cookie dough) and Vanilla Swiss Almond. Each has a “net carb” count of 2-5g per serving.
Fellow-U.S. brand Blue Bunny has introduced a new line of desserts called Carb Freedom. The frozen dairy desserts are sold in Double Strawberry, Mint Chip, Vanilla Bean, Butter Pecan and Chocolate Almond Fudge variants and each has a “net carb” of
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between 2-4g. The range is also available in frozen ice cream bars, in Almond, Vanilla and Fudge flavours.
Another mainstream U.S. player, Kemps, has recently added Carb Promise, a six-strong range, to its product line to capitalise on low-carbohydrate dieters restricted by being unable to eat conventional ice-cream. With national distribution already in place, these manufacturers have used their existing brand values to their advantage.
U.S. dairy manufacturer Food Lion has expanded its range of low-carbohydrate ice creams to include three varieties of Healthy Delight ice cream, made with Splenda as a sugar substitute. Good Humor-Breyers Ice Cream has launched CarbSmart ice cream in containers, Klondike CarbSmart bars and Klondike CarbSmart Fudge Bars. Atkins also has a presence in this sector, marketing ice-cream bars under its Endulge branding.
Dannon, the U.S. arm of French dairy company Danone, has launched Light 'n Fit Carb Control, a reduced carbohydrate cultured dairy snack, after researching lowcarbohydrate diet consumers to find out which products they wanted to be easily available to them in store. Available in four flavours and in four-pack format, Light’n Fit Carb Control carries a suggested retail price of $2.49. James Cordero, the company’s senior brand manager, said: “Dannon is always looking to develop products that meet consumer needs, especially in light of the increase in reduced-carbohydrate dieting”.
General Mills’ Yoplait brand is also embracing low-carbohydrate with its Yoplait Ultra range of yoghurts. The Strawberry, Peach Cranberry, Blueberry and Raspberry varieties have 70% less sugar and carbohydrate than its normal variety.
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Figure 5.4: Yoplait Ultra
Business Insights
Source: Company website, author research
Drinks Soft carbonates and still beverages U.S. shelves have been groaning with a huge number of soft drinks marketed as lowcarbohydrate for a number of years, but activity has hastened to include mainstream players in the last few months. The well-documented tussle between Coca-Cola and Pepsi to launch mid-range cola drinks marketed as carbohydrate-controlled sums up the current level of development in the low-carbohydrate drinks sector.
PepsiCo entered the market first, with Pepsi Edge, as outlined in the section ‘Pepsi Edge’ on page 96. Coca-Cola has rallied and added further credibility to developing mid-range diet drinks aimed at those wavering consumers loyal to both full sugar and diet varieties. Its C2 cola has, like Pepsi Edge, half the sugar, calories and carbohydrates of its normal variant. Although diet versions of carbonates have always been low or zero sugar, therefore have always contained few carbohydrates, signposting that to consumers (and reformulating products to appeal to them) is important. The activity of these two players will largely set the agenda for how other companies react.
Both companies argue that consumers have driven the development of this sector – Coca-Cola chairman Douglas Daft said that consumers were the “architects of this idea,” and PepsiCo’s North American chief marketing officer, Dave Burwick, stressed that “everyone we’ve talked to is ready for this idea”.
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Coca-Cola’s other brands are moving forward on developing low-carbohydrate options or repositioning brands in line with this. Minute Maid has launched three new variants in its low-calorie range, by default a low-carbohydrate option as sweeteners are used, and is marketing the products as either a low-calorie or low-carbohydrate option. The range was expanded from the existing Minute Maid Light Lemonade and now includes Light Raspberry Passion, Light Mango Tropical and Light Guava Citrus. The drinks are available in 12-pack 330ml cans, 20 fl oz and two litre plastic bottles in most U.S. supermarkets and grocery outlets.
PepsiCo’s Tropicana has launched a Light’n Healthy range, containing a third less sugar than its core product range, in a bid to combat the impact of low-carbohydrate diets on falling sales of orange juice in the United States. The marketing and advertising campaign focuses heavily on the exercise element of the healthy living equation, featuring oranges working out on a variety of equipment, but the company does not disclose the processing procedure for reducing the sugar levels.
The Light’n Healthy range sits within Tropicana’s Essentials sub-line and demonstrates the brand’s eagerness to position itself as a healthy one: Healthy Heart (contains vitamins proven to reduce the risk of cardiovascular disease); Immunity Defense (contains antioxidants); Low Acid and Healthy Kids (vitamins and calcium added).
Cadbury-Schweppes-owned Snapple has developed a low-carbohydrate variant in its Snapple-a-Day meal replacement drink range, sitting alongside its existing low-calorie options in the United States. The low-carbohydrate drink comes in three flavours: Blueberry, Berry Banana and Mango Lime and contains 9g “net carbohydrates”.
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Privately owned U.S. juice manufacturer Old Orchard said it was responding to consumer need when it launched its Lo-Carb range of juices, with 75% less sugar and calories than its competitors. The Apple, Apple Kiwi Strawberry, Apple Cranberry, Apple Raspberry and Grape varieties contain Splenda and 130% of the Vitamin C RDA, as well as 6g “net carbohydrates”. Launched in January 2004, the juices have nationwide distribution.
EAS also markets a low-carbohydrate juice drink, in its Advant Edge range of lowcarbohydrate drinks and bars. The Fruit Citrus Splash, Mixed Berry and Lemon Twist varieties have 0g “net carbohydrates”, and the company has enlisted former supermodel Cindy Crawford to endorse the products in its marketing campaign.
Atkins Nutritionals markets a range of drinks mixes under its Morning Shine brand – the Apple, Fruit Punch, Orange and Peach flavours come in powder form and use sucralose and Splenda as a sweetener. The company’s Sugar-Free Syrups can also be diluted for drinking and are sold in Chocolate, Vanilla, Hazelnut, Raspberry, Strawberry, Pancake and Cherry flavours. Baja Bob manufacturers low-carbohydrate non-alcoholic drink mixes in a range of flavours.
The shakes and meal replacement drink market is well developed and dominated by powdered and ready-to-drink formats from players such as Atkins Nutritionals and Keto. However, Unilever brand Slim-Fast has also entered the market with a lowcarbohydrate sub-brand of shakes, meal and snack bars, designed to help boost the faltering diet brand, which has been knocked by the number of dieters trying lowcarbohydrate options instead of the traditional low-calorie and low-fat options offered by Slim-Fast. The Chocolate or Vanilla Cream shakes are assisted by the clout of the Slim-Fast brand, although the company does not endorse completely carbohydrate-free diets.
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Alcoholic beverages Major brewers in the U.S. and Canada have embraced the challenge to launch lower calorie and carbohydrate beers. Molson’s version, Molson Ultra, has a 4.5% alcohol content, 97 calories and 2.5g of carbohydrates per bottle. The company claims to have raised the bar in the lower-carbohydrate beer segment by combining the alcohol-byvolume level with a beer that is 100 calories per bottle. Peter Amirault, senior vice president, business development and innovation for Molson said the product had taken a year to bring to market.
Coors has also entered the market with Aspen Edge, which has with just 2.6g “net carbohydrates” and 94 calories per bottle; after qualitative research showed the brand’s target audience of male drinkers would try a low-carbohydrate beer. Currently in test markets around the U.S., the brand will be rolled out nationwide by the end of summer 2004 in six and 12-pack bottles both in retail outlets and bars.
U.S. vodka brand Skyy, owned by Campari, has teamed up with brewing company Miller to market a low-carbohydrate bottled malt alcoholic beverage with fewer carbohydrates than its main competitor, Smirnoff Ice.
Diageo will embark on a new initiative to provide information about calorie and carbohydrate content on its U.S. wine brands, following a decision by the Alcohol and Tobacco Tax and Trade Bureau to allow alcoholic drinks manufacturers to state accurate nutritional labelling on their products. The temporary ruling was instigated to help companies who want to market their products as low-carbohydrate, but it does come with strict caveats if producers want to make a claim - the term “lowcarbohydrate” can only be used for beverages which contain no more than 7g per serving, and advertising or marketing for those products which implies that alcohol is part of a healthy weight-loss plan is banned. Diageo is also flagging up some of its spirits brands as low-carbohydrate in the United States, such as Smirnoff, Johnnie Walker and Tanqueray Gin.
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UK case study: Michelob Ultra Anheuser-Busch was quick off the draw when it launched Michelob Ultra in the UK in August 2003, but the company had already seen a steady take-up of the product in the United States, giving it the confidence to launch in the UK before any of its rivals.
Assessing the U.S. market before launching products elsewhere In the United States, the brand has gained a 3.4% market share since its launch in September 2002 as the first low-carbohydrate beer. Competitors such as Coors have rushed to launch competing products in the wake of its launch. It contains only 3.0g of carbohydrates per 330ml, compared to, for example, Stella Artois’ 11g.
U.S. consumers’ appetite for lighter beers has grown in the past 15 years and Michelob wanted to capitalise on this. Added to this is the fact that the 21 to 29 year-olds account for more than 24% of total beer sales in the U.S.xxix. And according to U.S. census figures, this drinking segment will grow by nearly four million adults by the year 2010. The idea of a co-branded beer with Atkins was rejected and the company does not market Michelob Ultra as a diet beer, or as one related or linked to any diet.
After establishing that the Michelob brand would be the best suited to extend with a low-carbohydrate variant, the product was developed over 18 months. It achieves its low-carbohydrate status through an extended brewing process. The mashing process, when malted barley and grains are added to water and heated, is lengthened from the conventional process to allow the carbohydrates present to break down into simple sugars. This mixture is then strained and boiled with hops, and when this is cool, yeast is added to convert the simple sugars into alcohol and carbon dioxide.
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Mediamark Research Inc
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Testing in the U.S. took place in three states, Florida, Arizona and Colorado, in December 2001, opening out to include the rest of Florida as well as Chicago, Washington DC and Baltimore in May 2002 before a national rollout in September 2002. Anheuser Busch claims the brand has quadrupled its projections since initial rollout and is now proving to be one of the most popular brands in the country. It outsells Smirnoff Ice by doublexxx.
Figure 5.5: Michelob Ultra
Business Insights
Source: Author research
The UK market Launching in the UK was a natural progression, according to Randall Blackford, Anheuser-Busch’s UK marketing director, there was a clear gap in the market for a lowcarbohydrate and low-calorie beer. He cites research stating that 45% of UK consumers are concerned about their carbohydrate intake, with over 13 million people trying to lose
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weightxxxi. Over 2.4 million UK consumers are active gym members, with 6,000 fitness centres operating around the country.
Anheuser Busch’s internally conducted research also showed that 62% of 25 to 34 yearold males and 66% of 24 to 34 year-old females were likely to buy the product if it were launched in the UK.
Michelob Ultra was launched in bars and pubs across the UK and in four- and 10-packs in Tesco, Waitrose and Asda, as well as convenience stores and off-licenses. On-trade distribution is focused on free trade, franchised and mainstream high street bars and pubs.
The launch was supported by heavy advertising and promotional activity to ensure maximum impact of the new brand onto UK consumers. October 2003 saw the launch of Michelob Ultra Resolution, a nationwide promotion that challenged UK drinkers to live life to the full by carrying out their most wild resolutions. Spanning several months, the promotion built up a momentum and encouraged active participation from the brand’s consumers.
Michelob Ultra was also an official sponsor of the 2004 Flora London Marathon and the London Triathlon, emphasising its appeal as a go-getting, aspirational beer to the target audience of young drinkers. The company declined to quote its marketing budget for the launch, but includes television, radio, outdoor, local and national print advertising, PR, point of sale material as well as sponsorship.
After becoming the top selling four-pack in Tesco by the end of 2003, Michelob Ultra is also set for launch in Northern Ireland.
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Ingredients Opportunities for ingredients manufacturers have increased in line with consumers’ appetite for low-carbohydrate foods. Manufacturers of sweeteners and soy-based bulking ingredients are coping with increased demand as manufacturers seek to substitute the carbohydrate element of prepared foods with alternative ingredients. Better-developed synthetic ingredients will enable the low-carbohydrate food sector to explore into other sectors and grow further, although the industry could face controversy too, as consumer pressure groups react to synthetic ingredients included in certain food and drinks.
However, high calorie sweeteners such as High Fructose Corn Syrup, a staple, high calorific sweetener used by many beverage companies, has recently come under fire from scientists and consumers arguing that its high consumption levels have contributed to rising obesity and diabetes levels.
Reformulating foods to a low-carbohydrate specification is not just about replacing one ingredient with another – simply adding more of one and subtracting another can mean manufacturers end up with a totally different product, including its taste and texture. If consumers do not find these aspects satisfactory, they will not consume or re-purchase these products.
Low-carbohydrate foods and beverages rely on non-calorific sweeteners, resulting in high profile brand names such as Splenda (sucralose), NutraSweet and Equal (aspartame) experiencing increased profile and usage as companies seek to market lowcarbohydrate versions of their products. Aspartame, with its amino acid make-up and high sweetness (about 150-200 times sweeter than sugar), is different from sucralose, which is 600 times sweeter than sugar and has a closer chemical structure. Aspartame does not withstand high temperatures, making sucralose more adaptable for baked goods. Other ingredients that achieve the same properties as sugar include maltodextrine and sugar alcohols, which have a laxative effect if used to replace too much sugar.
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Arla Foods’ subsidiary, the Danish ingredients firm Arla Food Ingredients, is expecting a strong growth with its Spherix low calorie sweetener, which was developed from milk sugar lactose. The brand’s logo features on a range of products including juices now sold throughout the U.S. in Wal-Mart stores and its formulation makes it ideal for use in cultured dairy foods.
Getting the taste right is important, but achieving the same effect of bulk and mouthfeel is another. Soy protein, fibres, digestive-resistant starches, non-digestible hydrocolloids and some gums are both used to mimic the effects of carbohydrate in this area.
Jointly owned by DuPont, Solae is actively marketing its soy protein ingredients for use in low-carbohydrate food development. And its Fibrim brand of soy fibre is also being targeted at manufacturers wanting to increase dietary fibre into products. As an example of the opportunities for the ingredients industry, Archer Daniel Midland has 40 different products in its soy protein portfolio alone.
Foodservice The boom in low-carbohydrate options now available to consumers when they eat out of the home is well documented in the United States. Mainstream chains such as TGI Friday, Subway, Burger King, Chilli’s, Hardees and Ruby Tuesday all cater for carbohydrate-conscious consumers. McDonalds, for example, recently stated it would offer bunless burgers, in the wake of Burger King’s existing low-carbohydrate menu.
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Those that ignore the low-carbohydrate diner do so “at their own peril,” according to the National Restaurant Association in Washingtonxxxii. Its president and chief executive Steven Anderson said: “These are hugely historic times in the restaurant industry”.
Like the mainstream food and drinks markets, the UK foodservice industry’s foray into low-carbohydrate foods has been slower to develop, with a small number of companies actively offering consumers meal options. There is little evidence of activity in other European countries.
However, this is beginning to change. TGI Fridays is offering consumers lowcarbohydrate options on its UK menu, as is burger chain Wimpy, which offered an “Atkins-Friendly” grill for a limited period, and is now making it a permanent fixture after receiving positive feedback from consumers. Sandwich chain Pret a Manger has a range of salads and is trialling a range of breadless sandwiches in eight stores in London. Called ‘No Bread’, the layered products are served in a plastic box with a fork, and are clearly labelled as low-carbohydrate options on the packaging. The company is considering a national rollout after the success of its trial in a mix of London stores and has not reported a decline of sales across other sandwich lines, indicating that offering the choice has increased its customer base.
Boots, which was the first UK retailer to stock Atkins Nutritionals products, now has a range of low-carbohydrate, high protein products under its own Dietline brand, including soups, pastas, crackers, cakes and snack bars.
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Case study: Benjy’s Benjy’s was the first national chain of sandwich shops to tap into the low-carbohydrate trend in the UK. The company’s commercial director, Emma Rickwood, heard about low-carbohydrate diets on frequent trips to the U.S. and tried the Atkins diet herself in 2001.
She said the level of press and media interest in the diet from summer 2002 onwards convinced the company that offering a low-carbohydrate choice to consumers would boost sales and recruit new purchasers. “It was a light bulb moment when we realised we could offer low-carbohydrate products to the growing mass of UK consumers who appeared to be doing the diet – ourselves included,” Emma Rickwood recalled.
Research identified which products were suitable for marketing as low-carbohydrate, such as its range of omelettes and other breakfast items, lunch items such as chicken tikka pieces and the company’s suppliers were briefed to change product formulation on certain key-selling products. Benjy’s Tuna and Vegetable Pasta Salad became Tuna and Vegetable Crunch to appeal to the low-carbohydrate eaters. Those suppliers are now working on further product innovations including low-carbohydrate bread.
Benjy’s marketed the products as “Atkins-Friendly”, which raised objections from Atkins Nutritionals. Currently, the “Low-carb, low-price” strapline is used, reflecting the company’s ethos of value, according to Rickwood. The products are sold alongside Benjy’s WeightWatchers-branded, low-salt and Better For You sandwiches.
The company reported a noticeable sales uplift and surge of interest from consumers wanting to find low-carb products on the high street. It has since conducted focus groups to find out more about the choices they wanted, combining that with qualitative and quantitative research into dieting and eating habits amongst UK consumers. The company will continue to develop low-carbohydrate options for as long as there is demand, said Rickwood. 131
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Chapter 6
Potential Problems of LowCarbohydrate Development: Growth or Extinction?
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Chapter 6
Potential Problems of LowCarbohydrate Development: Growth or Extinction?
Summary Despite the clear indication that controlling carbohydrate intake works in the short term, the establishment’s scientific jury is still out on the long-term effects of a low-carbohydrate diet and research in general will be a key factor in the sector’s long-term development. Reformulating foods into low-carbohydrate variants requires more research on the long-term effects of consuming alternative ingredients such as sweeteners and soy protein. Consumers want assurances that the long-term effects of low-carbohydrate dieting are positive, and they also want to see the medical establishment and nutritionists advocating the diet. Working towards a manufacturing and retailing code of practice which audits the launch of new products specifically making low-carbohydrate claims and marketed as such is also a key factor.
Is there a solution to the global obesity epidemic? Atkins Nutritionals, the company which has largely driven the development of the lowcarbohydrate food sector in the United States, actively purports itself to offer a solution to the global obesity epidemic. The company believes low-carbohydrate diets to be healthier than the standard low-fat diet, which Western consumers have adopted to attempt to combat their growing waistlines.
However, there are many factors to consider before launching into the low-carbohydrate sector. It is far from being a one-way ticket to booming sales and healthy consumers. 134
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Even Atkins Nutritionals itself is attempting to slow the growth of a market it in part created, warning consumers in April 2004 to be aware of the glut of new products being launched. The company’s medical director, Dr Stuart Trager, pointed out that nonexistent guidelines from the Food and Drug Administration, the number of new ingredients and a race to enter the market could yield the arrival of products whose dubious integrity could damage the low-carbohydrate reputation.
This strategy reveals the company’s desire to retain a degree of “ownership” in an increasingly crowded marketplace, whilst still encouraging consumers to take up the low-carbohydrate mantra. Pointing out to enthusiastic consumers that simply eating ready-made, low-carbohydrate products without changing their lifestyles is not going to help weight loss is also an important task for Atkins Nutritionals and any other manufacturers in the market.
Whilst new entrants have spent time and money investing in developing, marketing and distributing new products, Atkins Nutritionals has all that, plus the added responsibility towards its founding product – the Atkins diet itself. The company cannot run the risk of consumers becoming disillusioned with low-carbohydrate dieting and pointing the finger at it as a generic scapegoat.
Research highlights Despite the clear indication that controlling carbohydrate intake works in the short term, the establishment’s scientific jury is still out on the long-term effects of a lowcarbohydrate diet and research in general will be a key factor in the sector’s long-term development.
The low-carbohydrate diet market points to a wealth of research on the subject. A recent study, Very Low Carbohydrate Weight-Loss Diets Revisted, concluded that the diet warranted further study, due to the number of positive factors associated with it. The study, undertaken in the United States and part-funded by the Robert C. Atkins Foundation, stated that low-carbohydrate diets suppressed appetite, decreased fat mass 135
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rather than lean tissue and showed favourable effects on specific risk factors for cardiovascular disease. It concluded that more research was needed, especially looking at the long-term effects of the diet.
U.S. market analyst at Opinion Dynamics, Larry Shimon, said that research focus should be on any potential long-term health benefits: “Consumers know it works, but what they don’t know is what will happen long-term. Manufacturers need to know that unless this changes – and it cannot at least for a further 10 to 15 years, or until long-term studies yield results – the market will remain niche”.
Reformulating foods into low-carbohydrate variants requires more research on the longterm effects of consuming alternative ingredients such as sweeteners and soy protein. Anecdotal evidence shows UK consumers to be sceptical about food contents and a 2003 ICM poll in The Guardian newspaper showed 79% of respondents thought that food manufacturers were irresponsible. Introducing new ingredients needs to be supported by research and careful marketing.
It seems unlikely that UK medical opinion is likely to shift in favour of low-carbohydrate dieting, but that does not mean there are substantial opportunities for companies to monitor and enter the market on a small scale. There are an estimated three million consumers following a low-carbohydrate diet in the UK according to Atkins Nutritionals – and they have specific product needs. To ignore those needs is not an option.
As research conducted for this report shows (see Industry Opinion and Consumer Research), the majority of food and drink manufacturing professionals in the UK think that the low-carbohydrate foods sector will have a lasting effect on the food industry in the UK. Marrying their enthusiasm for exploring this new market with the vital research needed to clarify the long-term effects of this way of eating will provide many opportunities to careful manufacturers.
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Remembering that U.S. and European consumers are different The difference between the U.S. and Europe markets, and the consumers that fuel them, must not be underestimated. Manufacturers and marketers must not assume that what is accepted in the U.S. will be adopted in the UK or Europe. As outlined in Chapter 3, Atkins Nutritionals undertook extensive manufacturer sourcing before launching its products in the UK. The company and the diet were marketed to combat the common claim that the Atkins diet is restrictive, although the book was not changed for a UK readership.
UK consumers – what do they really think of low-carbohydrate diets? Consumers need guidance, reassurance and a UK slant on low-carbohydrate diets, according to new research carried out by Sadek Wienberg Millward Brown and industry thinktank the Food and Drink Innovation Network.
Their research highlights the level of confusion that surrounds low-carbohydrate dieting and Atkins in particular, amongst mainstream consumers in the UK. There is no doubt that there are well-informed and confident consumers who have adopted lowcarbohydrate diets and eating patterns, often sourcing products and information from the United States, but indications are that the bulk of UK consumers do not fall into this group.
The companies surveyed two groups of women, all of whom “wanted to be lighter”, all between 30 and 55 years old and in the pre-children, children and post-children stage of life. The purpose was to find out how they felt about dieting in general and what their concept of low-carbohydrate diets, including Atkins, was.
The target group was well versed in dieting and had tried numerous ways to lose weight. They had experienced problems with boredom and cravings and the associated difficulties of staying on a diet when cooking for non-dieting family members. Diets were started for specific reasons and generally only undertaken for a period of time –
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usually until the goal weight was achieved. Often dieting alone, they liked the support network of diets such as WeightWatchers and Slim-Fast. All loved the choice and variety of products available to them, in spite of the temptation to stray from a diet.
Atkins had some supporters, and some doubters, within the group. All those who had followed the diet had been successful, losing one to two stone and dropping a dress size or two. The usual cravings and hunger did not happen and this made the diet easier to stick to, but there were reservations about the diet’s long-term effects. Even the diet’s advocators asked whether it was safe.
The doubters were not sure what the diet entailed, but had picked up on the perception that it was all about eating “steak and eggs”, “lots of fat and cream”. They were also concerned about long-term effects, and had been influenced by negative media coverage.
How to encourage more consumers to buy into the low-carbohydrate dieting ethos Although giving an idea of attitudes only, the research showed that effective communication of the efficacy and positive side of low-carbohydrate diets is key to the low-carbohydrate food sector’s growth: Translating the science into English, without using jargon, was a common request from the focus groups, as well as shedding pages from “thick diet books”; showing how people lose weight, with minimal hunger and cravings, was also a request; they also wanted to be told what they could and could not eat, and would respond to a friendly, English champion who could present the diet in a no-nonsense way to interested consumers – perhaps Atkins Nutritionals can achieve this through the endorsement of media doctor Dr Sarah Brewer;
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consumers want assurances that the long-term effects of low-carbohydrate dieting are positive, and they also wanted to see the medical establishment and nutritionists advocating the diet; making the diet “female”, with less emphasis on meats such as bacon and steak and the fat allowance could also be a strategy to attract more women; the groups wanted to see how low-carbohydrate diets related to their lifestyles, including the family. Advice on how they could be combined with other healthy eating plans, such as low-salt diets and the Five a Day message was also a must; government and supermarkets could “grasp the nettle” and provide information to consumers wanting to follow the diet, through better labelling and pack designs.
“Listening to consumers should be a priority for those companies launching lowcarbohydrate foods in the UK,” said Susan Holder, Sadek Wienberg Millward Brown’s research director. “They have been assaulted with healthy-eating messages recently and know they should take heed. Offering products with a clear, easy to understand message which does not add further confusion will be essential if this new market is to succeed,” she added.
The research showed that UK consumers were receptive to low-carbohydrate thinking, but that it needed to be presented to them taking their “regionality” and non-US status into account. The popular conception of a diet high in red meat steak, for example, was not appealing to UK consumers, because of cost and health issues. Changing its emphasis to chicken or fish would have more positive connotations for UK consumers.
Coping with adverse coverage from a sceptical press The FDIN and Sadek Weinberg Millward Brown researchers also found that press and media attention, most of it negative, had had a knock-on effect on consumer awareness of the diet. Media interest in Atkins reached a peak in the UK in the summer of 2002. The diet was everywhere, from the celebrity magazines to the national broadsheets, as
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the UK public sought to understand just how a diet, which turns conventional eating wisdom on its head, actually works.
Susan Holder said: “The huge amounts of press coverage have got consumers interested, but manufacturers who want to launch into the sector must be aware of the media’s intense interest too, and seek to educate UK consumers in a way they can relate to”.
Earning consumer confidence through product safety Winning consumer confidence is crucially important, and to do that, products must be safe. Sceptics argue that foods traditionally high in carbohydrates, which have been reformulated to contain fewer carbohydrates and sugar, will by their very nature contain other “bulking” substances that may not be beneficial to health. Monitoring and investing in NPD will be essential if consumer confidence is to thrive.
Working towards a manufacturing and retailing code of practice which audits the launch of new products specifically making low-carbohydrate claims and marketed as such is also a key factor. Clear labelling guidelines are also essential to promote transparency and consumer trust.
Performance is everything – the route of NPD in the UK and lessons to be learnt in Europe It is not just about manufacturing safe products. Any entrant to the low-carbohydrate market has to perform just as well as, if not better than, its conventional counterpart. This will be a crucial factor in shifting the market from niche to mainstream.
Maintaining transparency over ingredient content and gauging consumers’ reaction to the addition of carbohydrate-mimicking additives is also a crucial issue. Some commentators, including UK low-carbohydrate expert Barry Groves, author of Eat Fat, Get Thin, are hostile to the prospect of excessive numbers of highly-processed foods as part of low-carbohydrate development. He said: “What I’d like to see is a return to 140
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whole and unprocessed foods. What I suspect will happen is that manufacturers will seek to add value by reformulating processed foods to low-carbohydrate standards”.
Getting the price right Manufacturers and marketers must working towards bringing the price of lowcarbohydrate products down to an acceptable level for consumers to integrate them into their shopping budget.
Currently, research shows that most low-carbohydrate dieters in the U.S. earn in excess of $70,000 per yearxxxiii. Clearly, there are future profit opportunities to tap into those consumers who do not have the earning power, but still want to follow the diets.
Opinion Dynamics analyst, Larry Shiman, believes, however, that consumers are happy to pay for a niche product if it lives up to its claim and performs in the same its conventional counterpart would.
“Prices will start to fall, but it is not quite as much of a deterrent to buy as you might imagine. Once people believe in a product, they will often overlook price. The important factor is making consumers believe in a product. The best way for that is through efficacy and resulting word-of mouth – low-carbohydrate eaters are keen to spread the word, and positive consumer feedback can work better than a sophisticated marketing campaign. Remembering how the Atkins phenomena started is a good tool – it worked, the public saw for themselves and tried it.”
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Chapter 7
Coping with Competition: How are Rival Slimming Products Coping with the LowCarbohydrate Diet?
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Chapter 7
Coping with Competition: How are Rival Slimming Products Coping with the Low-Carbohydrate Diet?
Summary The Slim-Fast format lost favour with consumers who found they could lose weight quickly whilst still eating high-protein, high-fat foods on a lowcarbohydrate diet and Unilever was forced to cut Slim-Fast’s sales target. WeightWatchers is the other main player in the European and U.S. diet food sector and has been facing a similar challenge in the face of low-carbohydrate diets as Unilever. Between 1997 and 2002, attendance at WeightWatchers meetings more than doubled from 23 million to 55 million. WeightWatchers has continued to concede that consumers were interested in following low-carbohydrate diets by including information about different carbohydrates and their varying nutritional qualities.
Slim-Fast and Unilever’s “Path to Growth” Unilever’s Slim-Fast slimming foods arm has not been performing as well as was hoped – not good news for a brand which was earmarked as one of the company’s top 400 labels and part of its “Path to Growth” strategy. The “Path to Growth” plan, started in 2000, the year in which Unilever bought Slim-Fast Foods, is now in its final year and saw the company slashing its portfolio of brands of 2,000 to a core range of 400. SlimFast sits alongside Lipton Teas, Knorr and a host of other famous names. It is a brand synonymous with dieting, but despite a wealth of positive research into its efficacy, has been struggling in the face of competition from low-carbohydrate diets such as Atkins and the South Beach Diet, which have been working better in the eyes of the public. 144
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Falling sales Whilst sales grew across the globe in 2002, with sales being led by sales of its meal bars, in 2003 sales of Slim-Fast’s traditional fare of meal-replacement shakes, bars and powders slipped 27% to $290 millionxxxiv.
The Slim-Fast format was out of favour with consumers who found they could lose weight quickly whilst still eating high-protein, high-fat foods on a low-carbohydrate diet and Unilever was forced to cut Slim-Fast’s sales target. Consumer research analysts reported that consumers had what they dubbed “diet formula fatigue”, especially for the Slim-Fast brand and its product range.
Revamping Slim-Fast The company initially rallied with a revamp in May 2003, investing in a new dieting concept, packaging and product formulations to bring it into line with an emphasis on changing long-term eating habits. Slim-Fast’s image and products had previously been associated with weight-loss over a shorter period of time.
The Six-A-Day eating plan was also introduced, advocating more regular consumption of balanced meals, and a range of frozen ready meals was launched, which helped to drive sales in markets where mealtime traditions had made sales of meal-replacement options difficult.
The diet also acknowledged carbohydrate foods’ glycaemic index, offering advice on which carbohydrates had an effect on blood sugar levels and advising dieters to stick to lower-level foods such as wholegrain bread.
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Slim-Fast also needed to ramp up its exposure to consumers during a time when the media became fixated on low-carbohydrate diets. It upped its marketing spend with a deal to sponsor ITV1 travel show Wish You Were Here and updated its television, radio and press advertising.
Embracing low-carbohydrate in the U.S. Slim-Fast in the U.S. has gone one-step further and launched a range of lowcarbohydrate food options, both in the light of consumer demand, but also because the company claims its research showed that dieters were more likely to succeed on a plan which suited them best, including one low in carbohydrates. It does not condone the complete cutting of carbohydrates from the diet, but reasons that offering products with 2-3g “net carbohydrates” will enable consumers to follow a low-carbohydrate diet without alienating them from the Slim-Fast brand.
The new product range adds to its core range of snack bars, shakes and meal bars and puts it directly in competition with Atkins Nutritionals’ offerings in the same category. The two ready-to-drink shakes come in Creamy Chocolate and Vanilla Cream flavours, available in a 340ml can singly or in four-pack format. Meal bars are Chocolate Peanut Butter, Chocolate Brownie and Cinnamon bun varieties and are designed to replace a meal. The snack bar products are Chocolate Peanut, Cookies ‘n Cream and Banana Nut, and act as a mid-meal snack as part of the Six-A-Day eating plan. There are no current plans to launch the range in Europe.
The development of low-carbohydrate foods to sit within its Slim-Fast portfolio echoes development in other parts of Unilever’s business – its Carb Options range, as outlined in Chapter 5, shows that the company is committed to the long-term development of low-carbohydrate foods.
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Unilever’s co-chairman Antony Burgmans has admitted that he sees no evidence that the low-carbohydrate trend has “cooled off”
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. He has also outlined Unilever’s
commitment to other health-related initiatives, claiming that 2% of turnover is channelled into R&D, half of which is invested in the food division. Half of this in turn is spent on vitality and health projects and is a figure expected to grow.
WeightWatchers WeightWatchers is the other main player in the European and U.S. diet food sector and has been facing a similar challenge in the face of low-carbohydrate diets as Unilever. Conceived in 1963, the company went public in 1968 and was bought by Heinz 10 years later. It is now owned by Artal Luxembourg, although it has a number of manufacturers, including Heinz, making branded products under licence.
Although its food products have a considerable presence and revenue stream, the company’s meetings business is core to its growth, it claims to have 40,000 weekly meetings in 30 different countries, with consumers using its proprietary Points system, or the new FlexPoints plan.
Growth pattern shows slump Sales for the company have been steady; its 2002 revenues were $809.6 million, showing a 30% rise since the previous year, where revenues came in at $623.9 million. Figures for the three months to January 2004 showed revenues of $216 million, although the company has been fighting to retain its high levels of membership.
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Between 1997 and 2002, attendance at WeightWatchers meetings more than doubled from 23 million to 55 million. Datamonitor research pinned this surge of activity down to consumers approaching middle age and concerned about their weight choosing a well-established brand and its well-documented support system of group meetings.
However, this dropped off in the last quarter of 2003, with membership dropping 3.1%, even though figures showed some 26% of U.S. consumers were on some kind of dietxxxvi.
Evolving formats for changing consumers Although WeightWatchers claims that dieters respond better when they are losing weight in a group, the company moved quickly to recognise that offering consumers the choice of successfully following its system alone was also an untapped revenue stream. It embraced the Internet and now offers remote diet groups on its global websites, specifically for consumers too busy or without the inclination to attend meetings. Members can assess the value of foods, find recipes and record their progress online on a series of regional websites.
WeightWatchers has also responded to the rising rates of obesity in the U.S. by developing “corporate solutions”, offering businesses the chance to grasp the nettle, combat an expanding workforce and put a stop to obesity-related illness by offering meetings and support in-house.
Tackling and conceding consumers’ appetite for low-carbohydrate products In the face of Atkins, WeightWatchers was quick to defend itself as the most popular diet plan in the U.S. and publicly announced its scepticism of a low-carbohydrate diet as
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an effective way to lose weight. As the public’s enthusiasm for low-carbohydrate foods mounted, WeightWatchers compiled a consumer guide, “The Truth About Carbs”, which it distributed to members and group leaders.
The document claimed that reducing carbohydrates only affected weight loss because calorie consumption also falls, that essential nutrients were lost if carbohydrates were removed from the diet, and that if normal eating patterns were resumed, weight gain was inevitable. WeightWatchers drew on advice from American Cancer Society guidelines, as well the National Kidney Foundation, the American Dietetic Association and the American College of preventative medicine, which all advocate a balanced, lowfat diet including carbohydrates. Indeed the company’s own research, in collaboration with the National Institute of Health, showed that WeightWatchers dieters generally kept the weight they had lost off even after five years. Emphasising the level of support offered by the diet programme was also a crucial tactic to retaining and increasing its membership base.
The company launched its FlexPoints system in Autumn 2003, which allows consumers to accrue Points and build flexibility into their diet plan. This idea gave the company the chance to re-educate its members about the benefits of a low fat, calorie controlled diet.
January 2004 saw the introduction of its FastTrack programme, designed to offer rapid weight loss in the first two weeks – in the same manner of Atkins’ induction period. The programme also included a guide to “higher protein” eating. Membership numbers rallied, but slumped again following the promotion, leading WeightWatchers to admit that its first quarter of 2004 will show a drop in membership.
WeightWatchers has continued to concede that consumers were interested in following low-carbohydrate diets by including information about different carbohydrates and their varying nutritional qualities.
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Product innovation WeightWatchers-branded products have been hit by the move away from low fat to lowcarbohydrate meals. Heinz’s range of Smart Ones ready meals, available in the United States, is soon to be boosted by six variants aimed at consumers trying to cut carbohydrates. Sales of Smart Ones have been hit by low-carbohydrate food sales, and the six new options will effectively allow Heinz to test the market and WeightWatchers to incorporate them into its system through its “Truth about Carbs” initiative.
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Chapter 8
Industry Opinion and Consumer Research
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Chapter 8
Industry Opinion and Consumer Research
Summary Over a quarter of food and drink companies view the development of lowcarbohydrate foods as a priority, and are actively investing in the research and development of new products. 28% of industry respondents claimed they had a good knowledge of the sector, because it was a priority for the company for which they worked. The categories believed to currently be most affected are bakery, confectionery and snack-foods. 76% of respondents thought that the snack foods sector would be affected by developments in low-carbohydrate food, with 73% believing that the bakery sector would be challenged. Exercise, or lack of it, was a crucial consideration for our food industry and consumer respondents, with nearly all citing it as very important factor in the growth of obesity. Progressive sandwich retailer Benjy’s, which stocks a range of low-carbohydrate products including Carbolite bars, showed its strength in the consumer survey, with 40% of the sample claiming they would buy its products in the future up from the 2% who currently regularly purchase Benjy’s products.
Introduction Over a quarter of food and drink companies view the development of low-carbohydrate foods as a priority, and are actively investing in the research and development of new products. Half are monitoring the sector with interest, keeping abreast of the latest developments and studying the impact of this new sector on their business, but are not currently involved in launching into it.
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Business Insights conducted two surveys in April 2004 for the purpose of primary research for this report. The first was an industry opinion survey, which was completed by a staggering 513 respondents across a number of European countries including Belgium, France, Germany, Italy, Spain and the United Kingdom, as well as the United States.
The second was a consumer opinion survey, based in the UK, with a total 159 respondents. The aim of conducting the two surveys was to identify whether the industry and the consumer are on the same page when it comes to dieting, with a particular focus on low-carbohydrate diets such as Atkins. The results of both should be of high interest to any executive in the food and drinks industry regardless of whether they are already focusing on a specific product or considering launching one in the near future. This chapter opens up the debate about the role of the food and drinks industry in respect of rising levels of obesity.
Individuals working in the following sectors were asked for their responses to questions on the subjects of obesity, dieting and the low-carbohydrate sector: Alcoholic drinks;
canned and cooked meats;
ambient, ingredients;
cheese;
baked goods and bread distribution;
chilled;
beverages;
frozen and ambient ready meals and components;
dried fruits; chocolate; biscuits; confectionery; breakfast cereals; foodservice and fast food; cakes; dairy – cheese, processing, desserts brewing;
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dietary supplements;
meat and meat-based ingredients;
edible fats and oils;
nutritional ingredients;
fibres;
organic food, including infant and childrens’ food;
fine food and delicatessen products; pasta; flavours, other ingredients and additives;
pizza;
frozen foods;
potato products;
fruit juices;
sandwiches;
functional foods and ingredients;
salads;
fruit and vegetable preparation;
seafood;
grain and plant-based products;
sauces and dressings;
grocery retailing;
snacks;
health food, natural products, herbal
soy-based products;
supplements and ingredient spices and seasonings;
manufacture;
diet and weight-loss foods;
vitamin and dietary supplements;
sugars;
ice cream;
spirits and liqueurs;
infant food;
sweeteners;
jams and preserves;
vegetarian foods;
meal solutions;
wine.
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What is the level of knowledge within your company about the lowcarbohydrate food sector? 28% of industry respondents claimed they had a good knowledge of the sector, because it was a priority for the company for which they worked; 52% of respondents claimed an average idea of the low-carbohydrate sector, saying that their organisations were monitoring and observing the market; 15% of respondents said their knowledge was low, mostly because their core business lay outside the low-carbohydrate sector; only 5% of the total 513 respondents admitted that they had no interest or knowledge in the sector, with no intention of exploring its opportunities.
Figure 8.6: How well perceived is the low-carbohydrate food sector within the industry?
5% 15%
28%
52%
High - it is a priority to us at the moment Average importance - it is something we are monitoring/aware of Low importance - it is not a priority to us No importance - we are not working in this sector nor are we interested in it Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
Do you view the low-carbohydrate sector as an opportunity, or a threat? 62% of respondents saw the burgeoning sector as an opportunity; 11% saw the market as a threat to their existing business;
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around 27% of the industry survey audience had no opinion either way, suggesting that they worked in a food or drink sector not directly touched by the trend.
Figure 8.7: Is the low-carbohydrate diet regarded as a threat or an opportunity?
70%
62%
60% 50% 40% 27%
30% 20% 11% 10% 0% Opportunity
Threat
Neither
Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
Does your company already manufacture a product that is marketed or sold as low-carbohydrate? 26% of respondents highlighted that their companies have already manufactured a product under the low-carbohydrate umbrella. of this 26%, 5% of respondents said there were no more products currently in the pipeline for the near future. however, 21% of those already manufacturing and marketing low-carbohydrate products in the UK said they were developing more for the near future. 22% of industry survey respondents said they were considering entering the market, but 52% – the majority – admitted they were not planning to launch such a product.
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Figure 8.8: How many companies are manufacturing products marketed or sold as low-carbohydrate or are planning to launch products in the future? 60%
52%
50% 40% 30%
22%
21%
20% 10%
5%
0% Yes but we are Yes we are not developing developing more any more in the for the near future near future
Considering it
No
Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
Do you think low-carbohydrate consumption is a “fad” that will impact the food and drinks industry in the short term, or is it here to stay for the longer term? The majority of respondents, 63%, believe that low-carbohydrate diets such as Dr Atkins’ would have a lasting impact on the food industry in the UK.
However, a still-significant number, 37%, said they thought that low-carbohydrate eating would be a fad with a limited shelf life.
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Figure 8.9: Short-term “fad” or long-term trend: an industry perspective?
37%
63%
Long-term potential influence
A short-term fad
Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
Which categories do you think have been most influenced by the lowcarbohydrate diet phenomena? The categories believed to currently be most affected are bakery, confectionery and snack-foods. 76% of respondents thought that the snack foods sector would be strongly affected by developments in low-carbohydrate food. 73% believing that the bakery sector would be challenged. Confectionery, a sector at odds with dieting in general, was also thought to be one in which current developments would be affected by the trend for low-carbohydrate foods, although to a lesser extent than snacking products and bakery.
Asked to predict whether the same would be true in three years time, the numbers dropped, as can be seen in Table 8.3. This indicates that respondents either thought that innovations in ingredients development would mean that high-carbohydrate products such as bread, snacks and confectionery would compete effectively against their normally formatted peer products, or that the sector would be less influential in general. Judging from the fact that two-thirds of our respondents thought that low-carbohydrate foods were here to stay, the former theory seems more likely.
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Sectors such as chilled and frozen foods, ambient meals, sauces and dressings, fruit juices and carbonates and beers and lagers, all of which traditionally contain carbohydrates either in variety or ingredients make-up, are also seen as likely candidates to be influenced by the low-carbohydrate trend.
The spirits and wine sectors remain relatively unaffected, however, in the eyes of the industry. Most products within these sectors contain a relatively low-carbohydrate count, meaning that any shift could come in the form of remarketing to capitalise on consumers’ enthusiasm for low-carbohydrate choices.
Table 8.3: Which categories do you think have been most influenced by the low-carbohydrate diet phenomena now and in thee years’ time? Category
Now
Bakery Chilled foods Frozen foods Confectionery Ambient meals Sauces and dressings Snacks Dairy products Fruit juices Carbonates Beers/lagers Spirits Wine
73% 31% 31% 53% 33% 41% 76% 43% 35% 46% 43% 11% 8%
In three years 27% 43% 46% 35% 46% 38% 25% 32% 31% 28% 29% 22% 21%
N/A 8% 28% 25% 17% 24% 24% 4% 27% 35% 28% 31% 68% 71%
Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
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Figure 8.10: Which categories do you think have been most influenced by the low-carbohydrate diet phenomena now and in thee years’ time? Now
C
Ba ke hi ry lle d fo Fr od oz s en C f o on od fe s c ti o Sa Am ne b uc ry es ien t an m e d dr als es si ng s Sn D ac ai ry ks pr od uc Fr ts ui tj ui ce C ar bo s Be na te er s s/ la ge rs Sp iri ts W in e
90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
In three years’ time
C
Ba ke hi ry lle d fo Fr od oz s en C f o on od fe s c ti o Sa Am ne b uc ry es ien t an m e d dr als es si ng s Sn D ac ai ry ks pr od uc Fr ts ui tj ui ce C ar bo s Be na te er s s/ la ge rs Sp iri ts W in e
50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
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Figure 8.11: Which categories do you think have been most influenced by the low-carbohydrate diet phenomena now and in thee years’ time? (Continued) N/A
C
Ba ke hi ry lle d fo Fr od oz s en C f o on od fe s c ti o Sa Am ne b uc ry es ien t an m e d dr als es si ng s Sn D ac ai ry ks pr od uc Fr ts ui tj ui ce C ar bo s Be na te er s s/ la ge rs Sp iri ts W in e
80% 70% 60% 50% 40% 30% 20% 10% 0%
Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
How important is it for UK retailers to accept products marketed as lowcarbohydrate in-store before the market opens up significantly? An overwhelming majority of 65% of respondents thought it was important that the UK’s multiple retailers supported low-carbohydrate product development and 21% of respondents considered it very important.
Only 14% of people did not consider retailer support as a catalyst for further development in the sector.
How significant are U.S. companies such as Atkins Nutritionals and Carbolite in the development of the low-carbohydrate sector in the UK? The aim of this question was to assess the level of interest in companies specialising in developing low-carbohydrate foods amongst industry players in the UK. Countries such as Germany should note the results of this question and other key European regions that
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are likely to follow the trend experienced first in the U.S. and then in the UK to a greater or lesser extent.
51% of respondents felt these companies were important to the development of the market here, of which 13% stressed that their activities were very important.
Interestingly, and perhaps demonstrating the relative youth of the market across Europe, 41% of respondents said they did not know how significant these companies were or would be on the development of the market.
The remaining 8% respondents believed the companies to be of average importance.
Tackling the issue of obesity The industry was also quizzed on the subject of rising obesity, as well as a sample group of 159 consumers (69 male and 90 female) on the issue of rising obesity in the UK. Both the industry executives and the consumers were asked what were the most important factors, in their opinions, for the increasing levels of childhood and general obesity.
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How important do you, within the industry, consider the following factors to be in the controversial debate on rising levels of obesity? Table 8.4: How important do you, within the industry, consider the following factors to be in the controversial debate on rising levels of obesity? Very important Lack of exercise Nutritionally poor school meals Increased snacking Decline in the traditional family mealtime occasions High fat and/or carbohydrate content in products Poor labelling on food and drinks products Large portion sizes Reliance on ready meals Increase in 'eating out'
Important
Average importance
Low importance
85%
13%
2%
1%
21% 51%
48% 40%
24% 8%
7% 1%
28%
46%
19%
6%
33%
34%
30%
4%
9% 30% 20% 15%
22% 38% 44% 38%
42% 25% 29% 34%
27% 7% 7% 13%
Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
Figure 8.12: How important do you, within the industry, consider the following factors to be in the controversial debate on rising levels of obesity?
Very important
Important
Average importance
Low importance
Increase in 'eating out'
Reliance on ready meals
Large portion sizes
Poor labelling food & drinks products
High fat and/or carbohydrate
Decline in traditional mealtimes
Increased snacking
Nutritionally Poor school meals
Lack of exercise
90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
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How important do you, as a consumer, consider the following factors to be in the controversial debate on rising levels of obesity? Table 8.5: How important do you, as a consumer, consider the following factors to be in the controversial debate on rising levels of obesity? Very important Food and drink marketing/advertising 33% Lack of exercise 90% Nutritionally poor school meals 38% Increased snacking 47% Decline in the traditional family mealtime occasions 25% High fat and/or carbohydrate content in products 45% Poor labelling on food and drinks products 22% Large portion sizes 33% Reliance on ready meals and fast food by certain consumers 48% Increase in 'eating out' 16% Poor education concerning the nutritional content of food and drink 43%
Important
Average importance
Low importance
46% 9%
16% 1%
5% 0%
42% 37%
16% 14%
4% 1%
45%
22%
8%
35%
16%
4%
32% 33%
28% 25%
18% 9%
38% 25%
13% 40%
1% 18%
35%
16%
6%
Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
Exercise, or lack of it, was a crucial consideration for the food industry and UK consumer respondents, with nearly all citing it as very important factor in the growth of obesity. No consumers and only five industry executives thought exercise was of little importance to the debate.
Increased snacking, large portion sizes and the prevalence of products high in fat and/or carbohydrates (sugar) were also key factors according to both sample. 93% of industry respondents stated that increased portion sizes were an important contributory factor to increasing obesity rates, with 96% considering the fat and carbohydrate content of food to be critical. Of the consumers surveyed, just under 99% of respondents felt increased snacking was an important factor, 90% of the consumer survey sample believed that large portion sizes were an important issue and 96% felt that high fat and sugar products were key factors in the rise in obesity.
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Nutritionally poor school meals and a lack of traditional mealtime occasions must take part of the blame 21% of industry respondents believed nutritionally poor school food was a very important contributing factor, followed by 48% believing them to be ‘important’ and 24% regarding them as being of ‘average importance’. 7% believed school meals held no importance in the debate.
More significantly 28% of industry respondents thought that a decline in the traditional family mealtime occasions was very important. This was echoed by the consumer sample; 96% of them thought school meals were of importance, 92% thought fewer family mealtimes were of importance and 99% felt a reliance on ready meals and fast food were important reasons for increased obesity.
Labelling was only considered an average importance factor, with just 9% of industry players considering it very important compared to 22% of consumers. The bulk of the industry respondents thought it either of average or low importance. The consumer sample was more divided on this issue with 46% consumers regarding it as an average or low-importance factor.
Do you think the food industry should be held responsible for the rising levels of obesity in children? We asked the industry respondents whether they felt their industry should take more responsibility in the area of increasing childhood obesity. 64% of respondents agreed that food and drink businesses had a part to play in combating childhood obesity in some respects, with 5.5% of this group indicating that the industry should take 100% responsibility for the situation.
A sizeable chunk of industry executives believe the food and drinks industry is not to blame for obesity, 36% of those who answered said that the industry should “definitely” not be held responsible for the rising levels of obesity.
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Consumer behaviour – survey findings The aim of the consumer survey was to sample and assess the dieting and exercise habits of a sample of the UK population, to find out how receptive they might be to lowcarbohydrate foods. We asked 159 adult consumers with the following age breakdowns:
Figure 8.13: Age ranking in consumer survey
18-24
25-30
31-35
36-40
41-45
46-50
51-55
56-60
60+
Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
The male to female percentage ratio for this survey was 44:56.
This survey must be analysed in context of the high proportion of 25-30 year old UK consumers who responded. This could be partly explained by the size of the sample group and the topic of health, obesity and dieting itself.
UK consumers think low-carbohydrate diets could be a short-term fad Contrary to the views of the industry, the majority of the consumer survey sample felt that low-carbohydrate diets and foods were likely to be a “fad” with a limited shelf life. If they had been on a diet, most respondents also said they had chosen a low-fat diet
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over a low-carbohydrate eating plan. However, they were almost twice as likely to have chosen the Atkins diet over Unilever’s Slim-Fast plan.
Have you been on a diet in the past 12 months? Are you currently on a diet or healthy eating plan? The majority of our sample, 36% of consumers, had not followed a diet in the past year. Currently, 31% of respondents consider themselves to be following a healthy eating plan.
If you are currently on a diet, please tell us how long you have been on this diet The majority of respondents had started a diet less than a week ago, however, the next most popular response was ‘more than three months’.
Figure 8.14: How long is the typical diet?
18% 32% 11% 9% 11%
14% 5%
Less than a week
About two weeks
About three weeks
About four weeks
More than a month
More than two months
More than three months Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
Which of the following diets have you tried in the past? Over half of respondents who answered had tried a low-fat or low-calorie diet and just over a quarter had tried the Atkins diet. Other branded low-carbohydrate diets did not 167
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fare so well, with only two and four consumers trying the Zone or South Beach diets respectively, although low-carbohydrate diets in general were popular – a combined 57% of consumers had tried one in some form. Only 19% of the sample had attempted to diet on the Slim-Fast plan, and only 7% had used diet pills. 41% of respondents said they had tried other, unnamed diet plans, which included: Scarsdale diet; Slimming World; WeightWatchers; Rosemary Conley; Cabbage Soup diet; personal healthy eating diet; “eat less, exercise more” Figure 8.15: What are the most popular diets?
70% 60% 50% 40% 30% 20% 10%
sp e
ie
se
(p l
ea
ca
lo r
ea ow
O th
er
t/l fa
ci fy )
di et
ie t ld
pi lls Ke l
Th e
Lo w
lo g
g' s
ce r
Di et
st Pl an
et
Fa
e Sl im
Th e
An y
ot
he
di
et di
rl ow
-c ar
bo
th So u e
Th
hy dr at
ch Be a
Zo n e Th
Th
e
At kin
s
e
di
di
et
et
0%
Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
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Over the last six months, how often have you exercised, on average, per week (20 minutes per session)? Just under a third of the consumer sample exercised just once a week or less, with the majority of 48% fitting in two or three sessions per week. 13% of consumers claimed to exercise four times a week, but there was a dramatic fall-off in the number of people exercising five times or more – just 8%.
Figure 8.16: Is exercise as important as dieting to consumers? How often do consumers exercise per week?
5% 4% 30%
13%
23% 25%
Once or less
Twice
Three times
Four times
Five times
More than five times
Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
Do you think low-carbohydrate eating is a “fad” that will impact the food and drinks industry in the short term, or is it here to stay for the long term? The vast majority of the consumer sample thought that low-carbohydrate foods would be a fad with no long-term impact on the UK’s food and drink industry. The remaining 39% thought it would have long-term influence.
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Figure 8.17: Short-term “fad” or long-term trend: a consumer perspective?
39%
61%
Long-term potential influence
A short-term fad
Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
Have you purchased any products from the following companies/brands in the past 12 months? Table 8.6: Have you purchased any products from the following companies/brands in the past 12 months? Regularly Atkins Nutritionals Carbolite McDonalds Cadbury's Michelob Ultra WeightWatchers Nimble (bread) Benjy's Boots' Shapers Sainsbury's Be Good to Yourself Asda's Good for You Safeway's Eat Smart Tesco's Healthy Living Other supermarket (private label) healthy eating ranges
Sometimes
No, but would consider it 11% 13% 6% 6% 23% 19% 25% 40% 21%
No, would never 86% 82% 26% 4% 67% 50% 60% 34% 20%
0% 0% 7% 28% 1% 6% 3% 2% 8%
1% 1% 60% 60% 8% 23% 11% 22% 51%
19% 7% 4% 14%
60% 17% 17% 47%
11% 45% 51% 28%
7% 29% 27% 11%
8%
42%
31%
11%
Source: Obesity, Low-Carb and Atkins Revolution Industry Opinion Survey April 2004 Business Insights
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The responses serve to show the level of penetration by the two leading lowcarbohydrate brands against other key brands and healthy eating ranges from the multiples. Although currently low, this look set to improve, with our sample consumers indicating that they would purchase branded products in the future.
The number of consumers buying chocolate, and intending to continue doing so, also gives an insight into the sectors which could do well from producing a low-carbohydrate (or low-fat) variant – confectionery is clearly a key product category for most consumers, regardless of their dieting behaviour. Creating a variant which would satisfy taste, texture, mouthfeel and price criteria would ensure low-carbohydrate dieters could continue to eat chocolate but fulfil their chosen eating plan.
Progressive sandwich retailer Benjy’s, which stocks a range of low-carbohydrate products including Carbolite bars, showed its strength, with 40% of the consumer sample claiming they would buy its products in the future up from the 2% who currently regularly purchase Benjy’s products. Sainsbury’s demonstrated its private label dominance in the UK retailer healthy eating ranges with 79% of consumers regularly or sometimes buying its products, beating Tesco’s 61%. The other multiples fared less well, with only 24% buying from Asda and 21% from Safeway’s healthy eating ranges.
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Chapter 9
2004 - The Year of the Low Carb Diet. What Next for the Industry?
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Chapter 9
2004 - The Year of the Low Carb Diet. What Next for the Industry?
Update to report – November 2004 Since researching and writing this report for publication in April 2004, the market for low-carbohydrate foods has moved forward. This appendix is designed to be read in conjunction with the original report. As well as looking into areas of growth and charting some of the NPD activity in low-carbohydrate products in the UK, we also repeated the research into industry opinions, with the results positioned against the attitudes we uncovered in May.
General overview Media interest in low-carbohydrate eating and foods has switched in the past six months. Consumer press interest, fuelled by celebrity dieters, debates over efficacy and safety and the sheer perceived novelty of such diets as Atkins New Diet Revolution, as well as numerous others, has changed to commentary on the longevity of any business opportunity.
Headlines have charted the launch and entry to market for a whole host of big-name brands - such as Unilever and Nestlé - to the low-carbohydrate sector and the appeal they hold for mass consumers, but they have also served to show the relative fragility of the market.
From “Low-carb diets appeal to over half the US population” (just-food.com, March 19, 2004), and “Low-carb boom isn’t just for dieters any more” (New York Times, February 19, 2004), and “Brands change course to combat Atkins”, Reuters, August 22, 174
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2004), the newspapers are now concentrating more on the economic strength of the market. This reflects the general mood of the food industry – keen to enter the market, but equally keen to check its long-term viability. In place of celebrity name-checks, we now see headlines such as “Low-carb food craze may have missed Atkins wave” (Reuters, August 22, 2004).
However, the exclusive survey of food and drinks professionals working in Europe and the United States conducted by Business Insights for this report shows that industry interest in developing low-carbohydrate choices is still strong. Over half of those we questioned said their companies were actively researching the sector, a percentage point up from those surveyed six months ago. It is slow progress.
The food industry, in fact, should be commended for not rushing to market too soon, saturating the marketplace with products for which there is insufficient audience. As reported in the original report, there are a number of growth-restricting factors, including insufficient long-term medical research - which, in curbing low-carbohydrate growth in the short term, may enable it to grow stronger in the future. Big brands would do well to continue to carefully research their areas, invest heavily in product and ingredient development, and plan their communications strategies.
In the United States, however, enthusiasm continues to grow. A recently established Internet portal aimed at investors researching entry into the low-carbohydrate market estimates that the market value of the sector in the United States will reach $25 billion in 2004.
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Who or what is driving growth in low-carbohydrate foods? Medical science Whilst the Atkins diet and its long-term effects have yet to be proven safe through medical research, other aspects of low-carbohydrate lifestyles are gaining momentum.
Glycaemic Index The general acceptance of the Glycaemic Index (GI) will continue to drive growth in interest in low-carbohydrate patterns of eating and the development of new products.
The GI scale has been adopted by Tesco and is included on the labels of many of its products. The scale, which was adopted to help diabetics control their blood sugar, runs from 1 to 100, according to how quickly the body absorbs the carbohydrate in a food. Glucose has a rating of 100, whilst low-GI foods show a smaller and slower rise in blood sugar levels.
Australia has launched a nationally recognised symbol for the GI, which now features prominently on products sold in the country. Tesco says it has benefited from its labelling scheme by increased loyalty from a niche group of diabetics, but the company has delighted low-carbohydrate diet followers in the UK because they can see at a glance which products are more suitable for them. However, the company still does not advocate a following a low-carbohydrate diet such as Atkins.
Because medical professionals already use the GI for helping diabetic patients monitor their blood sugar levels, it is thought that the system lends itself more readily for mass consumer following. Medical endorsement is a key factor in influencing lifestyle change. And because low-GI products, such as wholemeal bread and brown rice, offer consumers healthier ways to eat carbohydrate and does not restrict their consumption, it could be that nutritional plans which incorporate the GI become more significant than
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purely low-carbohydrate diets. However, the GI reflects whole, unprocessed foods, which offers little succour to manufacturers of processed, added value products.
Further research A study into the implications of low-carbohydrate diets has also been launched since the publication of this report. The National Institute of Clinical Excellence (NICE) is investigating Atkins as part of a huge study on obesity – the results, due to be compiled in January 2007 are expected to influence how doctors in the UK advise obese patients on the best way to lose weight. NICE has been advised by Atkins in the UK and US to include research demonstrating the effectiveness of low-carbohydrate eating when it draws conclusions about the benefits of such a diet and other generic diets.
Other studies continue, showing the interest taken in low-carbohydrate diets by the medical establishment. In the United States, a recent study undertaken at Harvard School of Public Health in Boston showed that there was a link between high carbohydrate consumption and an increased risk of breast cancer. The research looked at 2,000 Mexican women, and found that those who obtained over half their calories from carbohydrates had more than twice the risk of breast cancer as those on more balanced diets, with sucrose and fructose having the strongest link with breast cancer.
Multinational investment and interest The entry of several big players into the market has heralded others to take the plunge in offering UK consumers low-carbohydrate brands which had already been launched in the United States earlier in 2004.
Unilever’s decision to launch its Carb Options range in the UK is a signal that multinational investment in NPD will continue to push the market forward for lowcarbohydrate foods in regions other than the United States.
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Continuing innovation from smaller companies and the Internet Carbolite, the U.S. company that launched in the UK in early summer 2004, has now predicted sales of $150 million for the year.
GoLower, a UK company, reflects the entrepreneurial background of the lowcarbohydrate market in the United States. The company manufactures a range of meal replacement bars, and has just agreed a deal to supply catering firms Compass and Sodexho. It was started early in 2004 by ex-software executive Kevin Dorren and corporate lawyer Hannah Sutter and also supplies Sainsbury’s.
Consumer demand U.S. consumer take-up of low-carbohydrate diet and eating plans remains a compelling reason to continue researching entry to market. The latest figures from U.S. research firm Opinion Dynamics shows that the percentage of U.S. adults actively cutting carbohydrates from their diet has stabilised at around 11%. Whilst this can be viewed as the start of a possible downturn, it is still a significant portion of the population. Clearly, they will continue to demand options to suit their lifestyle.
Retailer activity in the UK – moving forward steadily Tesco Apart from Tesco’s activity in labelling foods with a GI count, the retailer has moved forward in low-carbohydrate foods. Tesco is now stocking Atkins products – this was not the case at the start of the year.
Asda Asda now stocks Nestlé’s low-carb Rolo and Kit-Kat products, plus a range of Atkins drinks. It also stocks Unilever’s Carb Options range, as well as Hovis Best with Less low-carbohydrate bread, but says it does not stock private label products, or any other specialist low-carbohydrate food, largely because consumer demand is not there. The
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retailer ran a joint campaign with Unilever to promote the launch of its Carb Options range.
Marks and Spencer It has moved on from offering a small range of low-carbohydrate wraps and ready meals to offering a more comprehensive range. A small range of low-carbohydrate ready meals now supplements the M&S range of egg-wrap sandwiches.
Boots Boots is driving forward with low-carbohydrate food options – perhaps not surprisingly, considering it was one of the launch outlets for Atkins-branded products in the UK. As well as a number of wraps and Atkins-branded products, it has launched a range of salads. Retailing at between £3.90 and £4.30, they are more expensive than the average lunchtime offering. Salad varieties include goats cheese & roasted vegetable, crayfish, prawn & honey roast salmon, chargrilled chicken, and chicken & bacon.
Sainsbury’s The retailer now stocks a selection of Atkins-branded products as well as Nestlé’s lowcarb Rolos and Kit-Kats. Unilever’s Carb Options range can be found on Sainsbury’s shelves, as is Duerr’s range of low-carbohydrate jams and GoLower products.
Morrison’s Morrison’s stocks the entire Unilever Carb Options range, as well as Nestle’s Low-Carb Kit-Kat and Rolo. It also sells Hovis Best with Less, a low-carbohydrate bread developed by British Bakeries (see below for more details).
Waitrose Waitrose has a significant range of branded low-carbohydrate products in-store.
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Interest shown by the major multiples is a good indication that low-carbohydrate food options are becoming a more mainstream choice for consumers. However, the breadth of products designed to help consumers with allergies and food intolerances or those who wish to eat organic foods does not indicate the complete mass-consumer market for such products. Low-carbohydrate foods are not likely to be catapulted into the mainstream yet.
Problems with future development Although many studies exist which show the efficacy of low-carbohydrate diets to shift excess weight quickly, and several show how weight can be kept off providing the diet is followed as a lifestyle, there is still the issue of long-term health effects. Nutritionists and health professionals are likely to continue to worry about the long-term effects of restricting the intake of a major food group. In turn, this could hinder a growth surge in the low-carbohydrate food and drink sector. Other potential health issues include osteoporosis, infertility and kidney stones.
Due to the celebrity interest, which initially piqued consumer interest in lowcarbohydrate eating, and particularly the Atkins Nutritional Approach, the media has retained a huge interest in the phenomena. Atkins shrewdly recruited well-known health journalist Dr Sarah Brewer, herself an advocate of low-carbohydrate eating, as a spokesperson for the diet in the UK, allowing it to add medical, rather than marketing, gravitas to health concerns raised in the UK media. As stated previously, negative press coverage, centring on dieting side effects, health and business, will continue to appear, but conversely, keeps the debate and issue alive in consumers’ minds. Dr Brewer’s main aim in the UK is to raise awareness of excess carbohydrate consumption and to turn traditional thinking upside down: “Raising awareness about the benefits of wise choices of carbohydrates based on their nutritional value and impact on blood sugar is an important part of my job,” she says.
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Dr Brewer does not promote the range of Atkins-branded low-carbohydrate products, however, in a move which demonstrates how seriously the company takes the medical championing of its diet plan – some may feel that Dr Brewer’s endorsement of processed foods would compromise her medical credentials.
The diet food industry has long been familiar with trend burnout – the struggles of the Slim-Fast and WeightWatchers branded diets and products continue to be the best examples of how fashion and fad can change consumer behaviour. This could be the case with low-carbohydrate dieting. Again, long-term research is needed to ensure mainstream appeal with longevity.
The ingredients industry has embraced low-carbohydrate food development as a major opportunity – and with good reason. A major growth restrictor on the low-carbohydrate sector could be a poorly developed product with inferior taste and mouthfeel. A recent article in The Scotsman featured several new products and tasters’ comments. The best stated one brand of low-carbohydrate chocolate tasted “like ordinary chocolate”. The worst were unkind: “Fake. Insulting. Evil. Chemical rubbish” is just one of the comments reflecting consumers’ honesty when faced with products, which fail in their opinions to perform. Ingredients innovations currently underway include developing fibre-based products designed to behave like carbohydrates and resilient starches to enable the development of potato-based low-carbohydrate options.
New product development update Development of low-carb foods in the UK is proving relatively slow and even slower in Europe – largely due to the cautious approach currently being adopted by the major retailers. The examples of activity outlined below illustrate how both big brands and small innovative companies are adding credibility to the sector.
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Nestlé and Unilever both have the advantage of a history of brand excellence, making the multiples more likely to back their launch.
Xcarb, a new company, lacks that tradition of excellence, making its penetration into still-sceptical retailers more difficult.
Carbolite, the U.S. company which launched its range of confectionery and snacks in the UK in early 2004, has now launched a mainstream low-carbohydrate sandwich range in partnership with Hazlewood foods, one of the largest manufacturers of prepared sandwiches.
Duerrs’ reputation as a quality jam manufacturer has meant a relatively smooth and seamless brand extension to include low-carbohydrate jams. At the time of writing (November 2004), Heinz was reported to be planning to launch a range of lowcarbohydrate foods, including baked beans.
Hovis, one of British Bakeries’ core brands, joins Nimble Carb So Low as a second bigname low-carbohydrate bread option for UK consumers.
Nestlé – low-carb Rolo and Kit-Kat Nestlé says the combination of celebrity endorsement and media attention has propelled low-carbohydrate diets and foods to the forefront, and it has moved relatively swiftly to position two of its leading brands in the burgeoning sector.
It has also been watching the development of the low-carbohydrate market in the United States closely and says the increasing expansion of the sector over the past five years has encouraged it to enter. It was the first mainstream operator in the UK and Ireland to launch low-carbohydrate chocolate.
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KitKat Low Carb and Rolo Low Carb were launched in mid-July 2004 with a price point of 79p and £1.49 respectively. They are also sold in seven-piece multipacks at an recommended retail price of £5.29 and £9.89. They are not displayed with other confectionery, but rather with other specialist diet foods. This means Nestlé can compete with a stronger brand against specialist manufacturers and brands, and also means the products’ higher price point is seen in context by consumers. Since launching, combined sales of both low-carbohydrate options have reached £1million.
Figure 9.18: Low carb confectionery
Business Insights
Source: Author research
Unilever Carb Options – pastas, sauces, soups and condiments Following the success of Carb Options in the United States, which was launched in the summer of 2004, Unilever has ramped up its rollout activity for the brand, launching in the UK and Australia, another burgeoning market for low-carbohydrate food. With sales in the United States expected to top $100 million in its first year, and the continued struggle for the Unilever-owned Slim-Fast brand, this is one brand that Unilever appears keen to nurture.
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sought to distance the brand from the “diet” concept of low-carbohydrate eating, instead communicating the “pleasure” aspects of eating – recent press and poster advertising uses the strapline: “Curb your carbs, not your enthusiasm”, and shows real people enjoying eating with gusto. The brand aims to “normalise” the concept of cutting carbohydrate consumption, a strategy which Unilever hopes will open it up to a body of consumers who want to continue to enjoy their food. Recipes, advice and product information is contained on a consumer website. The products have listings in most UK supermarkets. Launch activity has seen Unilever and Asda collaborate on promotional activity, with adverts appearing in national press to highlight prices and availability.
Carb Options has also been launched in Australia, with a heavy advertising campaign featuring a woman running away from a potato and the strapline: “There’s no need to run away from carbs”. The products, launched in September 2004, serve to fuel a burgeoning market in Australia, and Unilever is aiming to sell up to Aus$50 million worth of Carb Options in the region per year. Brewing company CUB is also bolstering low-carbohydrate in Australia, with the launch of Pure Blond, a low-carbohydrate beer.
Xcarb - ready meals This newcomer to the market has an ambitious strategy to become the “household name for low-carb in the UK”. Although Xcarb’s range of products has yet to be listed by UK retailers, the company claims its ready meals, desserts, pastas, soups and potatoes offer consumers the only complete range of foods available, spanning breakfast, lunch, dinner and snacks.
The company was started by a frustrated low-carbohydrate dieter and ex-Sainsbury buyer Dave Marshall who wanted better, convenient options. The full range comprises over 50 products. On the savoury side, the company has developed six ready meals, seven varieties of fresh and dry pasta, nine pasta sauces, three kinds of sausages and mashed vegetables, five soups and pork snacks. Sweet products include two trifle and mousse products, seven ice-cream flavours and milk and dark chocolate.
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Marshall is aiming for a £10 million annual turnover for the company, claiming this is achievable through enthusiasm for low-carbohydrate eating and the increasing numbers of obese consumers in the UK. Xcarb is planning a raft of PR and a £1 million advertising campaign to support the launch of the range.
Carbolite and Hazlewood Foods – sandwich range Spotting the impact that low-carbohydrate diets had on traditionally carbohydrate heavy foods such as bread, prompted Hazlewood Foods to research the options of launching sandwiches into the UK market. Teaming with Carbolite Europe, the company has launched a range of co-branded sandwiches to help low-carbohydrate eaters stick to their lifestyle and protect the UK’s strong “sandwich culture”.
The range includes egg mayonnaise and rocket, chicken and herb salad, smoked ham and cheddar and prawn mayonnaise, all served on a specially developed multi-seed bloomer bread with 13g carbohydrate per 100g. Carbolite’s European managing director, Rob Ellert, claims the long-term development of the market lies in products, which have no taste compromise. “Successful products are those which enable dieters to stick with their eating plan, offer convenience and are ultimately satiating,” he said.
Duerrs – low-carbohydrate jams and spreads Duerrs’ technical manager, Evelyn Lamacraft, lost weight on the South Beach Diet and decided to investigate the low-carbohydrate opportunities in jam. The result is a fivestrong range of low-carbohydrate preserves – strawberry, raspberry, apricot, blackcurrant and orange - and listings in Sainsbury’s, despite being launched in September 2004, a time when the supermarkets are normally restricting new lines to Christmas products. The research took six months, and has resulted in a product with increased fruit content and no added sugar. The sweetener used is Sucralose, and the carbohydrate content is 1g per 20g serving.
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Figure 9.19: Duerrs – low-carbohydrate jams and spreads
Business Insights
Source: Author research
With 85% extra fruit, the jams will have cross-over appeal to consumers who are not necessarily cutting their carbohydrate intake but want a “healthier” products, according to Lamacraft. Clearly, the benefits of attracting mainstream consumers to the product will lie in increased sales.
Kraft Following in the footsteps of using low-carb diets to market products, Kraft has positioned some of its products as ‘South Beach Diet Recommended’ in the United States. The diet requires people to limit their carb intake as well as saturated and trans fats. The ‘South Beach Diet Recommended’ label will appear on products such as Oscar Mayer Deli Meats.
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Hovis The Best with Less sliced white bread has 25% fewer carbohydrates than others and is positioned to capture the market of people who want to reduce their intake, but who are not following what the company calls “faddy” diets. The bread is made without artificial agents – the lower carbohydrate content is achieved by replacing the wheat content with other parts of the grain, according to Hovis’ head of marketing, Darren Grivell. Launched in July 2004, the bread is now stocked in most multiples.
Figure 9.20: Hovis’ low carb offering
Business Insights
Source: Author research
The company, which launched the Nimble Carb So Low bread earlier in the year, claims the healthy white bread sector is the fastest growing in the plant bread market, with year on year growth of around 24%. British Bakeries, now with two brands on the market, is clearly bullish about the low-carbohydrate sector, and predicts the low-carbohydrate bread market alone could be worth £70 million within five years.
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Special appendix – low-carbohydrate alcoholic beverages in the United States The arrival of low-carbohydrate beers onto the US and UK market have been detailed in the rest of this report. Michelob Ultra and Coors Aspen Edge and Labatt’s Rock Green Light were launched as low-carbohydrate beers, and Miller Lite and Bud Lite are now marketed as such. This reflects a growing trend for this sector. Currently, alcohol marketed as low-carbohydrate must have lower than 7g per serving, and there can be no implication that alcohol can play a role in losing or maintaining weight.
The rise of the alcopop’s popularity has spawned the launch of Bacardi Silver Low-Carb Black Cherry, which is a collaboration between Anheuser-Busch and Bacardi. The product sits within the Bacardi Silver range of drinks, and has listings alongside them in U.S. supermarkets. The range has a 24% share of the malted beverage market in the United States, meaning the low-carbohydrate variety has a strong brand base upon which to build and en existing mainstream audience. The launch was supported by a nationwide marketing and PR campaign when it launched in July 2004.
Marketing opportunities continue to grow for spirit manufacturers, as they do not contain carbohydrates. Diageo has spearheaded a campaign to emphasise this in marketing its spirits brands such as Smirnoff, Johnnie Walker and Tanqueray Gin, and has made efforts to educate low-carbohydrate enthusiasts in a PR campaign.
3 Vodka claims to be the first U.S. spirit to be granted permission to use a “zero carbohydrate” claim on its packaging. The spirit, manufactured by Sovereign Brands, is made from soy isolates as opposed to vodka’s traditional ingredients of corn, wheat or potato. The brand has made much of its celebrity drinkers, which have reportedly included Britney Spears and Justin Timberlake.
Diageo’s work to tackle its wine brands BV Coastal, Sterling Vintners Collection and Century Cellars by flagging up their low-carbohydrate content has been followed by 188
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other manufacturers. Diageo used bottleneck leaflets and the strapline: “Low Carbs, High Standards” to highlight the 3g carbohydrate per serving credentials for a BV Chardonnay. Sutter Home Family Vineyards is also adopting the tactic.
Other manufacturers are changing the formulation of their wine brands. Brown-Forman, manufacturer of the Jack Daniel’s and Southern Comfort brands, has launched One.6 Chardonnay and One.9 Merlot – flagging up the low-carbohydrate content as part of the brand itself. Commentators have predicted other brands at mass-market level will follow suit, although it is not thought premium brand owners would consider such a tactic.
Big brand names with existing consumer bases and hefty marketing budgets are well poised to take advantage of low-carbohydrate demand in the United States.
Industry opinion update – end of 2004 Following on from the industry survey taken in April 2004, we asked a cross-section of the international food and drinks industry for their views on the low-carbohydrate food market.
For the second survey, individuals working in the following sectors were asked their opinions on the low-carbohydrate sector: Snacks
Fish
Brewing
General food
Ready meals
Dairy
Spreads and jams
Cereal bars
Ingredients
Cheese
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Mayonnaise
Nuts
Pasta
Bakery
Dressings
Nutritional and dietary supplements.
Non-alcoholic drinks
Biscuits
RTD hot beverages
Education
Research and consultancy
Confectionery
Functional foods
The survey was re-mailed to the 519 industry executives who responded to the first survey to monitor changes in opinions over the six-month period between April 2004 and October 2004. 129 people responded to the second mailing.
What is the level of knowledge within your company of the lowcarbohydrate food sector? An increased number of respondents – 32% - claimed their company had a high level of knowledge about the low-carbohydrate sector. This is compared with responses from six months ago, when 28% of respondents said low-carbohydrate food and drink was a priority area for them.
Over half our respondents said it was something their company was exploring - 53% up 1% from six months ago.
Fewer respondents (12%) claimed the sector was not a priority – compared with 15% in April 2004.
Only 4% of the surveyed professionals admitted that they had little knowledge of the sector, a decrease of 1% from the previous survey.
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Table 9.7: What is the level of knowledge within your company about the low-carbohydrate food sector? High - it is a priority to us at the moment Average importance - it is something we are monitoring/aware of Low importance - it is not a priority to us No importance - we are not working in this sector, nor are we interested in it
31% 53% 12% 4% Business Insights
Source: Business Insights survey, October 2004
Which categories do you think have been most influenced by the lowcarbohydrate diet phenomenon? Little change appears to have occurred in terms of category penetration/perception. As seen in the previous survey, the three sectors perceived to be most influenced by the low-carbohydrate trend were bakery, snacks and confectionery. 79% felt that bakery goods were challenged, with 77% feeling that snacks were affected and 52% convinced that the confectionery sector was. These results are similar to those garnered from the previous survey.
The numbers dropped considerably when the respondents were asked about the influence of low-carbohydrate products in three years time. Some categories were thought to be largely unaffected – wine and spirits are both naturally low in carbohydrates.
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Table 9.8: Which categories do you think have been most influenced by the low carbohydrate diet?
Bakery Chilled foods Frozen foods Confectionery Ambient meals Sauces and dressings Snacks Dairy products Fruit juices Carbonates Beers/lagers Spirits Wine
Now 79% 42% 38% 58% 40% 48% 77% 42% 40% 46% 46% 17% 10%
In three years 31% 33% 40% 38% 42% 29% 29% 29% 38% 35% 23% 21% 23%
N/A 2% 29% 27% 10% 21% 27% 2% 33% 29% 23% 33% 63% 69% Business Insights
Source: Business Insights survey, October 2004
Do you view the low-carbohydrate sector as an opportunity or a threat? There has been little movement in respondents’ attitudes towards low-carbohydrate foods – 62% thought that the sector was an opportunity, whilst 11% felt it to be a threat, showing a 1% shift in favour of a threat. 27% had no opinion either way.
Table 9.9: Do you view the low-carbohydrate sector as an opportunity or a threat? Opportunity Threat Neither
63% 15% 23% Business Insights
Source: Business Insights survey, October 2004
Do you think low-carbohydrate consumption is a “fad” that will impact the food and drinks industry in the short term, or is it here to stay for the long term? The respondents were divided in half exactly on this topic, showing a change from the previous survey, when 63% felt low-carbohydrate products would have a long-term
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impact. This time, 14% more respondents, or 50% of those surveyed, felt that lowcarbohydrate was a fad.
Table 9.10: Do you think low-carbohydrate eating is a “fad” that will impact the food and drinks industry in the short-term or is it here to stay for the longer term? Long-term potential influence A short-term fad
50% 50% Business Insights
Source: Business Insights survey, October 2004
Do you think the majority of UK and European food companies are taking low-carbohydrate food opportunities seriously? 45% of respondents said they thought low-carbohydrate was just another diet issue. However, a still-significant number – 28% – thought that most food and drink companies were taking the issue seriously enough to take advantage of the opportunities. Conversely, 19% thought the issue was not being taken seriously, and 9% did not know.
Table 9.11: Do you think the majority of UK and European food companies are taking low-carbohydrate food opportunities seriously? Yes, it is viewed as a serious market opportunity Average 'dieting' issue No, it is not being taken seriously as is not regarded as long-term issue I don't know
28% 45% 19% 9% Business Insights
Source: Business Insights survey, October 2004
How significant at US companies such as Atkins Nutritionals and Carbolite in the development of the low-carbohydrate sector in the UK? We wanted to find out whether specialist companies were better known in the UK than they were when we ran the previous survey, and also how important they were considered to be. 61% of respondents said they thought they were important, of which
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15% thinking they were very important – showing an increase of 10% from the last survey. Only 22% did not know whether they were significant players, down by half, which shows that awareness of specialist companies working in the low-carbohydrate sector has gone up. The same number of respondents – 8% - felt companies such as Atkins and Carbolite were not important.
Table 9.12: How significant are U.S. companies such as Atkins Nutritionals and Carbolite in the development of the low-carbohydrate market in the UK? Very important Important Not important Don't know
15% 46% 17% 22% Business Insights
Source: Business Insights survey, October 2004
How important is it for UK retailers to accept low-carbohydrate products in-store before the market opens up significantly? The power of the retailers continues to be an important factor for the rise of lowcarbohydrate options in the eyes of our respondents. 81% thought it was important that retailers would help grow the market by stocking the products, with 22% thinking it was very important. Just a fifth felt that retailers were not a significant factor in opening up the market.
Table 9.13: How important is it for UK retailers to accept low-carbohydrate products in-store before the market opens up significantly? Very important Important Not important
22% 59% 20% Business Insights
Source: Business Insights survey, October 2004
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Does your company already manufacture a product that is marketed and sold as low-carbohydrate? 23% of respondents said their firms already operated within the low-carbohydrate food sector, showing a slight dip from the previous survey’s 26% - this could be affected by the smaller number of respondents to the second survey.
Of those, 10% said they would not be exploring NPD in this sector, although 13% had further development plans in the pipeline.
There was a big leap in the numbers of companies not already developing or manufacturing low-carbohydrate food or drink who are thinking about entering the market. 31% of the survey’s respondents said this was the case, compared with 22% from the previous survey.
And 46% of respondents said there were no plans to enter the market, down from 52% six months ago.
Table 9.14: Does your company already manufacture a product, which is marketed and sold as low-carbohydrate? Yes, but we are not developing any more in the near future Yes, we are developing more for the near future Considering it No
10% 13% 31% 46% Business Insights
Source: Business Insights survey, October 2004
In the second survey, some additional questions were also asked to reflect change and development within the low-carbohydrate food sector.
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How significant for the future potential of the low-carbohydrate market is it that companies such as Unilever and Heinz have launched lowcarbohydrate options? For the vast majority of respondents – 83% - it is indeed significant that large multinational companies have taken up the challenge of producing and marketing lowcarbohydrate foods. Of those, a further 9% felt it to be highly significant. Only 13% did not see the involvement of multinational players to be a sign of the growing importance of the low-carb food sector.
Table 9.15: How significant for the future potential of the low carb market is it that companies such as Unilever and Heinz have launched carb products? Highly significant Significant Not significant I don't know
9% 74% 13% 4% Business Insights
Source: Business Insights survey, October 2004
Which of the following do you think will drive further growth in the lowcarbohydrate sector? The media - with 57% of respondents - was seen as the top driver behind any further growth of low-carbohydrate foods. Consumers – with 55% of those taking part in the survey believing they were a key force behind further growth – came second. Just 19% believed that retailers would lie behind further growth, although 21% also thought that other high-profile low-carbohydrate diets would also contribute to further growth, presumably through media coverage and consumer take-up. As consumers typically lead innovation and new product development in the food and drinks industry, it is extremely interesting to note that the media is viewed as having such a strong influence. The media has picked up on the issue of healthy eating and dieting much more in 2004 and the food and drinks industry is more than aware of its role in influencing consumers’ purchasing habits.
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Table 9.16: Which of the following do you think will drive further growth in the low-carbohydrate sector? Consumers Retailers The media Manufacturers Other high-profile low-carb diets Other (please specify)
55% 19% 57% 38% 21% 11% Business Insights
Source: Business Insights survey, October 2004
Finally, the aim of the survey was to find out what personal involvement the respondents had had with low-carbohydrate eating plans.
Have you ever been on a low-carb diet? 40% of those surveyed claimed to have followed a low-carbohydrate diet. Of that figure, 12% claimed to be currently following a low-carbohydrate plan, with 20% admitting to trying a few times. 8% of those asked had followed a diet once. Significantly, 43% said they had never tried such a diet, and would not consider it in the future, although 12% who had never tried it would give it a go in the future.
Table 9.17: Have you ever been on a low-carb diet? Yes, I always eat low carb Yes, a few times Yes, once No, would never follow a low-carb diet No, but would consider following a low-carb diet I don't know
12% 20% 8% 43% 12% 6% Business Insights
Source: Business Insights survey, October 2004
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Chapter 10
Glossary and Terms
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Chapter 10
Glossary and Terms
Acesulfame K: An intense sweetener 200 times sweeter than sucrose. Is not metabolized by the body and is excreted unchanged. Brand names include Sunett.
Aspartame: An artificial sweetener that is some 200 times sweeter than sucrose. Stable for only a few months in solution, it can be used in soft drinks, dessert mixes, and as a tabletop sweetener. Brand names include Canderel, Equal, Nutrasweet and Sanecta. Body Mass Index (BMI): A way of measuring obesity. The weight in kg, divided by the square of the height in metres. The acceptable range is 20-25, above 25 is overweight, and above 30 is obese. Bulking agents: Non-nutritive substances, which are added to foods to increase their bulk and the consumer’s sense of satiety, especially in foods, designed to help weight loss. Calorie: A unit of energy used to express the energy yields of foods and energy expenditure of the body. One calorie is the amount of heat needed to raise the temperature of 1g of water 1oC (from 14.5-15.5oC). Carbohydrate: One of the nutrients that supply calories to the body. Compounds composed of carbon, oxygen and hydrogen arranged as monosaccharides (simple sugars) or multiples of monosaccharides (polysaccharides). When completely broken down in the body, a gram of carbohydrate yields about four calories. It is common for people to consume at least 300 grams of carbohydrate daily, but Atkins Nutritionals advises a considerably lower carbohydrate intake. The more active an individual, the higher the tolerance. Atkins also concentrates on vegetables and other nutrient dense carbohydrates rather than refined, heavily processed carbohydrates such as white flour and sugar. Complex carbohydrates: Polysaccharides composed of straight or branched chains of monosaccharides (simple sugars).
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Dextrose: Alternative name for glucose. Commercially, the term “glucose” is used to mean corn syrup (a mixture of other sugars and dextrins) and pure glucose is called dextrose. Dietary fibre: Material mostly deriving from plant cell walls, which is not digested by enzymes but is broken down into fatty acids, which can be used as a source of energy. Consists of non-starch polysaccharides, including soluble fibre that reduces levels of blood cholesterol and increases the viscosity of intestinal contents. Diabetic foods: Loose term for foods specially formulated for people with diabetes. They are generally low in carbohydrate, and especially sugar, and frequently contain sugar derivatives that are slowly, or incompletely, absorbed. Disaccharides: Sugars made up of two monosaccharide units. The nutritionally important ones are sucrose, lactose and maltose. Fat: A water-insoluble solid or semi-solid compound that is one of the three sources of macro-nutrients (supplying calories) in food and essential for life. Fat insulates the body – ensuring temperature maintenance – supplies fatty acids and carries the fat-soluble vitamin A, D, E and K. When completely broken down in the body, a gram of fat yields about nine calories. Total fat refers to the sum of saturated, monounsaturated and polyunsaturated fats in food. Glycaemic index (GI): A quick way to understand the relative impact that carbohydrates from a particular food have on blood sugar, compared to the effect after eating a similar amount of pure glucose, which enters the bloodstream almost immediately. In general, the lower a food is on the glycaemic index, or GI, the less glucose it will deliver to the bloodstream and therefore the less insulin the pancreas must produce to transport the glucose to cells. The less insulin produced, the less likely it is that the body stores fat. The GI does not take into account the average size of a portion. Glycaemic load (GL): Unlike the glycaemic index (GI) the glycaemic load takes portion size into consideration, comparing equal portions.
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Glycogen: A complex sugar composed of glucose, it is manufactured and stored in the liver and muscles and held ready for release to other parts of the body. HDL (high-density lipoprotein): Considered the “good” cholesterol, HDL is actually a carrier molecule that transports cholesterol in the blood. HDL is responsible for returning cholesterol and triglycerides, or fats, from the cells and the vessels to the liver. High Fructose Corn Syrup: Glucose syrup made by splitting starch molecules converting half the glucose to fructose. Similar to an equivalent made from sucrose, but cheaper. Use by many soft drinks manufacturers, and recently under fire from consumer pressure groups concerned about obesity levels. Ketosis: Short for benign dietary ketosis, or BDK, this is a biological process that results when sufficient glucose as a source of energy is not available from dietary carbohydrate and the body switches primarily to using fat. Fatty acids are released into the bloodstream, and then converted to ketones, which are used by muscles, the brain and other organs. Excess ketones are excreted in urine. Ketones have been used in the treatment of epilepsy. LDL (low-density lipoprotein): LDL is a carrier molecule that transports cholesterol and triglycerides in the blood from the liver to the body's cells. Although long considered the “bad” cholesterol, recent research indicates that some subfractions of LDL are actually heart-protective. Maltitol: This sugar alcohol is used by food manufacturers as a replacement for carbohydrates such as sucrose. It contributes only 2.1 calories per gram as compared to sucrose’s four calories per gram; nor does it raise blood glucose as sucrose does. Monosaccharides: Simple sugars, such as glucose, fructose and galactose.
Net carbohydrates: The carbohydrates that can be digested and processed by the body as dietary carbohydrate and therefore directly impact blood sugar. The figure for “net
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carbohydrates” represents the total grams of carbohydrate, minus grams of fibre, glycerine and sugar alcohols. Pancreas: An organ located behind the stomach that makes enzymes, glucogens and hormones, including insulin. The enzymes help digest food in the small intestine, glucogens are a reserve source of energy and insulin, a peptide hormone, controls blood sugar, making it integral to carbohydrate metabolism. Protein: Found in all living tissue, proteins are polymers of amino acids joined together by peptides. Dietary essential, they are chemically distinguished from fats and carbohydrates by containing nitrogen. Refined carbohydrate(s): Plant foods that have undergone a process by which their coarse parts are removed - when wheat is refined into flour, the bran, germ and husk are taken away.
Saccharin: A synthetic sweetener, 550 times sweeter than sucrose. Saturated fat: A type of fatty acid found in meat, egg yolks, dairy products and fish, as well as coconut and palm oils. Saturated fats are generally solid at room temperature. Starch: The principle carbohydrate of the diet, and a major source of energy. Starches from different sources (potato, maize, cereal) have different structures. When broken down by acids and enzymes, produces glucose. Sucralose: Trade name for chlorinated sucrose, Sucralose is 2000 times as sweet as sucrose and stable to heat and acid, making it useful for incorporating into baked goods. Sugar alcohols: Also known as polyols, sugar alcohols are sugar molecules with hydroxy, or alcohol, groups attached. Sugar alcohols have many of the characteristics of carbohydrates, such as bulking and sweetening, but provide fewer calories and do not impact blood glucose as sugar does. Varieties include Mannitol, Xylitol, Lactitol and
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Sorbitol and Isomalt. Can cause gastrointestinal discomfort if more than 20-50g per day is eaten. Sugars: Commonly table sugar or sucrose, extracted from sugar beet or cane, concentrated and refined. Molasses is the residue left after the first stage of crystallisation, treacle is the outcome of the second stage. The first crystals come in the form of Muscovado, brown and sticky, refined down into Demarara. Refined white sugar is 100% pure sucrose, and has a calorific value of 3.9 cal/g. Triglyceride: The chief form of fat in the diet and the major storage form of fat in the body. Serum levels of triglycerides indicate how much fat is moving through or clogging arteries. A level below 200 milligrams per decilitre (mg/dl) is considered healthy. Type I diabetes: Insulin-dependent diabetes is a less common type of diabetes than Type II, in which insufficient or no insulin is produced, requiring daily injections of insulin. Juvenile-onset diabetes is an autoimmune condition more likely to be Type I. It is a lifelong condition requiring the use of insulin. Type II diabetes: Also known as non-insulin-dependent diabetes, this is the more common type of diabetes. The body's fat cells resist the action of insulin, resulting in the inability to burn up the blood sugar (that comes from dietary carbohydrates), resulting in more sugar circulating in the bloodstream. Glossary compiled with the help of Atkins Nutritionals and Bender’s Dictionary of Nutrition and Food Techonology, David and Arnold Bender, Woodhead Publishing.
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Index
children, 29, 30, 35, 36, 38, 39, 41, 42, 51, 52, 61, 135, 163
&, 51, 73, 108, 111, 114, 117 advertisers, 38, 41, 42
Coca-Cola, 32, 39, 95, 119, 120 Africa, 36, 96 consumers, 15, 16, 17, 18, 20, 30, 31, 34, 38, 40, 41, 43, 44, 45, 46, 47, 48, 49, 50, 51, 53, 55, 58, 63, 64, 66, 68, 69, 70, 71, 72, 73, 75, 76, 78, 79, 81, 82, 83, 86, 87, 88, 89, 90, 91, 92, 93, 95, 98, 100, 101, 102, 103, 104, 105, 106, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 123, 124, 125, 126, 127, 128, 129, 132, 133, 134, 135, 136, 137, 138, 139, 142, 143, 144, 145, 146, 147, 148, 157, 160, 162, 163, 164, 165, 166, 167, 169
Anheuser-Busch, 18, 32, 100, 123, 124 Asia, 36, 93 Atkins, iii, 14, 15, 16, 17, 24, 25, 26, 27, 30, 31, 32, 34, 46, 47, 50, 55, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 78, 79, 80, 83, 84, 85, 87, 90, 91, 92, 94, 96, 97, 103, 109, 111, 112, 113, 114, 116, 118, 121, 123, 128, 129, 132, 133, 134, 135, 136, 137, 139, 142, 144, 146, 147, 151, 153, 154, 155, 156, 157, 158, 159, 161, 162, 164, 165, 166, 167, 168, 198, 202
diabetes, 16, 30, 36, 45, 58, 59, 64, 70, 96, 126, 199, 202
BBC, 42, 44
dieting, 14, 19, 24, 25, 26, 28, 31, 35, 49, 55, 66, 82, 86, 87, 91, 93, 96, 118, 129, 132, 133, 134, 135, 136, 137, 142, 143, 151, 156, 164, 167, 169
Benjy’s, 21, 32, 129, 150, 169
Doritos, 31, 93, 94, 105, 106
Boots, 31, 69, 70, 113, 128, 168
Europe, 20, 27, 29, 30, 55, 67, 68, 69, 75, 88, 93, 97, 135, 138, 144, 160
Australia, 96, 97
brands, 14, 17, 24, 31, 32, 39, 40, 42, 67, 84, 85, 90, 92, 94, 95, 101, 102, 103, 104, 105, 106, 107, 110, 112, 113, 114, 120, 122, 124, 142, 168, 169
fat, 14, 15, 20, 24, 26, 27, 28, 31, 32, 34, 35, 36, 38, 40, 41, 42, 43, 46, 47, 52, 59, 62, 67, 71, 75, 80, 81, 87, 97, 102, 106, 111, 113, 121, 132, 133, 136, 137, 142, 143, 147, 148, 161, 162, 164, 165, 169, 199, 200, 201, 202
British Bakeries, 32, 115, 116 Burger King, 31, 54, 92, 127
France, 30, 31, 49, 97, 151 Cadbury’s, 39 Frito-Lay, 94, 104, 105, 106, 107 Canada, 42, 54, 87, 93, 96, 122 Frozen food, 61, 105, 115, 119, 124, 153, 154, 155, 156, 158, 159, 161, 164, 165, 166, 167, 168, 181, 184, 185
Carbolite, 15, 21, 31, 32, 34, 47, 73, 84, 85, 87, 88, 90, 92, 103, 114, 117, 150, 159, 168, 169
General Mills, 18, 84, 100, 108, 114, 117, 118 205
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media, 16, 58, 62, 69, 70, 79, 96, 129, 136, 137, 138, 144
Germany, 30, 51, 69, 97, 98, 151, 159 government, 15, 30, 38, 39, 40, 41, 43, 46, 60, 62, 105, 137
Michelob Ultra, 18, 72, 79, 100, 123, 125, 168 Netherlands, 30, 69
Heinz, 17, 32, 72, 78, 80, 84, 93, 108, 110, 145, 148
Nimble, 32, 115, 116, 168 Hershey’s, 18, 100, 103, 104 NPD, 17, 18, 78, 80, 85, 86, 90, 101, 104, 138, 146, 189, 190, 191, 192, 193, 194, 195
Holland & Barrett, 73
nutrition, 16, 35, 41, 43, 44, 53, 54, 58, 70, 97
ingredients, 19, 32, 42, 43, 84, 85, 102, 111, 126, 127, 132, 133, 134, 151, 152, 156, 157
obesity, 1, 14, 15, 21, 24, 28, 29, 30, 31, 34, 35, 36, 37, 38, 39, 40, 41, 42, 45, 48, 50, 53, 54, 55, 59, 76, 96, 105, 126, 132, 146, 150, 151, 160, 161, 162, 163, 164, 198, 200
insulin, 26, 199, 201, 202 Internet, 17, 31, 86, 90, 91, 97, 104, 111, 112, 113, 115, 146
overweight, 29, 30, 35, 36, 37, 96, 198 Israel, 96 packaging, 43, 44, 52, 75, 101, 102, 128, 143 Italy, 30, 31, 49, 97, 98, 151 Pepsi, 31, 93, 94, 95, 104, 119 Kellogg’s, 39 PepsiCo, 15, 34, 39, 53, 93, 94, 95, 105, 119, 120
Keto, 15, 31, 34, 47, 84, 85, 86, 87, 90, 91, 92, 97, 104, 109, 111, 112, 114, 117, 121
portion, 39, 44, 45, 49, 52, 73, 161, 162, 199 Kraft, 43, 53, 102 private label, 15, 34, 44, 71, 72, 73, 89, 90, 94, 168, 169
labelling, 15, 34, 41, 42, 43, 44, 55, 72, 102, 113, 122, 137, 138, 161, 162
research, 16, 17, 19, 20, 26, 27, 35, 39, 44, 45, 46, 48, 59, 60, 61, 62, 67, 71, 76, 78, 79, 80, 81, 82, 83, 86, 89, 91, 104, 111, 115, 122, 124, 125, 129, 132, 133, 134, 135, 136, 137, 139, 142, 143, 144, 146, 147, 150, 151, 200
licensing, 17, 42, 43, 67, 78, 80 Lidl, 98 manufacturers, 15, 17, 32, 34, 38, 39, 40, 41, 42, 45, 46, 47, 49, 53, 55, 64, 69, 78, 79, 81, 83, 85, 86, 88, 89, 91, 93, 97, 98, 101, 103, 108, 112, 118, 121, 122, 126, 127, 133, 134, 138, 139, 145, 200
restaurant, 16, 46, 58, 67, 92, 128 retailers, 15, 17, 31, 38, 46, 50, 65, 69, 78, 79, 82, 86, 88, 89, 90, 97, 159
marketing, ii, 14, 16, 18, 24, 31, 38, 41, 43, 51, 53, 55, 59, 69, 70, 79, 86, 87, 91, 92, 95, 97, 100, 101, 103, 106, 111, 112, 114, 115, 117, 118, 119, 120, 121, 122, 124, 125, 127, 129, 133, 134, 139, 144, 154, 162
Russell Stover, 94, 103 Safeway, 72, 89, 116, 168, 169 Slim Fast, 19
Marks and Spencer, 73 Somerfield, 72, 116 McDonald’s, 32, 39, 50, 51, 52, 53, 54, 55 South Beach, 27, 31, 50, 97, 98, 142, 166
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96, 97, 100, 102, 103, 104, 107, 108, 109, 111, 112, 113, 114, 115, 116, 117, 123, 124, 125, 128, 129, 134, 135, 137, 138, 151, 154, 155, 159, 160, 162, 164, 167, 169
soy, 19, 74, 103, 104, 106, 107, 108, 112, 113, 114, 126, 127, 132, 134, 152 Subway, 16, 31, 54, 58, 67, 68, 92, 127
Unilever, 17, 20, 40, 46, 78, 80, 84, 93, 103, 109, 110, 111, 121, 142, 143, 144, 145, 165
Superdrug, 31, 73
Tesco, 15, 34, 44, 72, 116, 125, 168, 169
United States, 15, 16, 17, 18, 20, 25, 27, 35, 43, 44, 45, 48, 50, 53, 54, 58, 64, 66, 67, 75, 76, 79, 81, 82, 84, 86, 88, 91, 92, 93, 95, 98, 100, 101, 102, 107, 108, 109, 110, 111, 112, 113, 114, 120, 122, 123, 124, 127, 132, 133, 135, 148, 151
TGI Fridays, 16, 58, 67, 92, 128
vending machines, 38, 39, 91
The Hamptons Diet, 27, 76
Waitrose, 72, 125
U.S., 14, 15, 17, 18, 20, 24, 25, 26, 29, 31, 32, 34, 35, 37, 39, 40, 43, 44, 45, 46, 49, 50, 53, 54, 58, 59, 60, 61, 65, 66, 67, 68, 69, 71, 75, 78, 79, 81, 82, 83, 86, 88, 89, 90, 91, 92, 94, 95, 97, 100, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 117, 118, 119, 120, 121, 122, 123, 124, 127, 129, 134, 135, 139, 142, 144, 145, 146, 159, 160
Wal-Mart, 17, 45, 71, 78, 86, 89, 90, 93, 94, 97, 117, 127
supplements, 15, 31, 34, 47, 59, 62, 65, 66, 69, 70, 71, 74, 75, 84, 85, 91, 97, 152 Switzerland, 69, 97
website, 72, 75, 86, 87, 90, 91, 97, 113 weight, 14, 15, 16, 20, 24, 26, 28, 30, 34, 36, 46, 58, 59, 63, 64, 70, 72, 122, 125, 133, 135, 136, 142, 143, 146, 147, 152, 198 WeightWatchers, 19, 20, 72, 129, 136, 142, 145, 146, 147, 148, 166, 168
UK, 14, 15, 16, 18, 20, 24, 28, 29, 30, 31, 32, 34, 35, 37, 38, 40, 41, 42, 44, 45, 47, 52, 53, 54, 55, 58, 62, 64, 65, 68, 69, 70, 71, 73, 74, 75, 76, 79, 86, 87, 88, 90, 91, 93,
Zone, 28, 31, 97, 166
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