The Atkins economy
How to lose weight and make money with low carbohydrate diets
Aug 14th 2003 From The Economist print edition
“OF ALL the parasites that reflect humanity, I do not know of, nor can I imagine, any more distressing than that of obesity,” wrote William Banting in what was probably the first guide to following a low-carbohydrate diet. After trying all manner of remedies, in 1862 this London undertaker was horrified that he still tipped the scales at 202 pounds (92 kg). A year later, after following his high-protein diet, he had shed 46 pounds. Today he would probably have been a devotee of the Atkins diet, which is having a huge impact not just on the slimming business—worth over $40 billion in America alone—but on the entire food industry.
Unlike a conventional diet, which stresses guilt and abstention, particularly with regard to fats and protein, the Atkins diet encourages feasting on such delights as eggs, bacon, steak and cream (not necessarily all on the same plate) while avoiding carbohydrates, such as bread, potatoes and pasta. Coupled with celebrity endorsements from the likes of Catherine Zeta-Jones and Jennifer Aniston, the promise of munching through so many once-forbidden things to lose weight fast has made the diet enormously successful—especially in America, where nearly two-thirds of the population are overweight.
Lowcarb.ca posts William Banting's “Letter on Corpulence”. See also Slim.Fast and Weight Watchers.
When the Atkins diet began to take off rapidly in America last year it moved markets, especially for beef, says Charles Levitt, a senior livestock analyst with Alaron Futures and Options, a Chicago trading company. Further afield, as the diet has suddenly become all the rage with blubbery Brits, in recent weeks egg sales in Britain have grown by an unexpected 3%. “If not Atkins, then we are not sure what else has caused it,” says Peter Challands, marketing director of Deans Foods, the country's biggest egg-producer.
Thinner profits
Atkins is also being blamed for others' misfortunes. Unilever, an Anglo-Dutch consumer-products giant, says the diet has eaten into its profits. It is one reason why sales of its SlimFast brand have been hurt in America, the company admitted recently. Weight Watchers, which promotes conventional diet plans with its own celebrity, Sarah Ferguson, Duchess of York, has seen a 6% fall in Americans attending its slimming programmes.
At the same time, a new market is opening up for low-carbohydrate snacks, foods and beverages. No one yet knows if it will be as big as that for low-fat foods, such as “lite” yoghurts and margarines. Nevertheless, the food industry is abuzz with talk about producers preparing various low-carb products to substitute for items on the Atkins blacklist. In Britain this month, Anheuser-Busch, a big brewer, launched its new low-carbohydrate beer, Michelob ULTRA, which has been on sale in America since last year. HVC Lizard Chocolate, a small American firm, has started supplying a sugarless carbohydrate-free chocolate bar called Z-Carb to the 7-Eleven convenience-store chain.
Leading the trend is the business established by Robert Atkins, who died in April, aged 72, from complications after a fall on an icy New York street. His pioneering book, “Dr Atkins' Diet Revolution”, was first published in 1972 and has now sold some 15m copies worldwide—many in the past couple of years. His last book, “Atkins for Life”, has ridden high on bestseller lists since it was released in January—briefly overtaking even Harry Potter. His work challenges many nutritional conventions. Much of his diet's popularity came after some recent studies showed that, at least in the short term, it could work and might lead to improved health.
Yet some scientists are deeply sceptical. They concede that many Atkins followers do lose weight. But they argue that this is probably because they inadvertently consume fewer calories, rather than because of the mechanism suggested by Dr Atkins whereby the body switches from a carbohydrate-burning metabolism to a mainly fat-burning metabolism. That theory is “nonsense and pseudo science,” said Susan Jebb, a nutritionist at Britain's Medical Research Council, on August 12th. Dr Jebb and others expressed concern that, like any extreme diet, Atkins could pose long-term health risks. Tabloid newspapers promptly screamed that the fashionable Atkins diet is “dangerous”.
Atkins officials maintain that the diet is by no means wacky. Atkins Nutritionals, based in Ronkonkoma, New York, is the commercial arm of Dr Atkins's legacy. It is now a multi-million dollar business. From producing mainly dietary supplements, the company now has over 100 food and snack lines. Looking ahead, Scott Kabak, the firm's president, says the main developments will come in low-carbohydrate breakfast cereals, pasta and bread. While he expects plenty of competition for such products, Mr Kabak says the privately held firm has taken out patents and has proprietary use of certain production techniques that he hopes will give it the edge. Atkins Nutritionals also has a strong brand, which he says will be reinforced with new marketing and new books.
But is it just another dieting fad? Linda Huett, the chief executive of Weight Watchers International, thinks so. “Certainly, throughout my career I have seen dozens of extreme diets, including low-carb regimes, come and go, with none of them having any lasting impact on our business,” she recently told financial analysts. Nevertheless, Weight Watchers is revamping its product with the launch in America on August 17th of a new programme called Flex Points, which is supposed to be easier for slimmers to follow.
“I don't think it is a fad,” says Richard Poulson, executive vice president and an adviser to the chairman of Virginia-based Smithfield Foods, the world's largest pork producer and processor and the fourth-largest beef processor. He lost 30 pounds over about four months with the Atkins diet, and thinks Smithfield's new range of lean pork could do well in a growing market for low-carbohydrate foods.
Michelob ULTRA has already been far more successful than Anheuser-Busch expected, says Randall Blackford, the firm's British marketing director. The new beer has a fraction of the calories and carbohydrates of its rivals. It is brewed with an extended mashing time, in which the carbohydrates are broken down into simple sugars that are then fermented into alcohol and carbon dioxide. It sounds simple, but it took Anheuser-Busch some 18 months to produce what they claim is a first-rate premium lager.
And if beer, why not fast food? Imagine if McDonald's were to extend its recent enthusiasm for “healthy” meals, which has led it to promote salads. What might a bigger Big Mac without the bun and fries do to beef, wheat and potato prices?
Nor does the market for low-carbohydrate products necessarily depend on the continuing success of the Atkins diet. While Atkins demands an extreme low-carbohydrate regime, at least in its early stages, many of its rivals also advocate, to varying degrees, a controlled carbohydrate intake. One of them is the intriguingly named “South Beach Diet”, which has recently overtaken Atkins in some best-seller lists. It was written by Arthur Agatston, a cardiologist from Miami Beach.
Competition among diets is fierce. It certainly helps if diets are enjoyable and easy to follow. The once portly Banting, who lived at 27 St James's Street, London (next door to what is now The Economist building) understood that even better than alcohol-sceptic Dr Atkins. In Banting's pamphlet, “Letter on Corpulence”, he suggests for supper three or four ounces of meat or fish, and a glass or two of claret. And, if so inclined, a tumbler of gin, whisky or brandy as a nightcap. Some bright publisher should reprint his advice as the “Banting Plan”—which would surely trounce Atkins in the best-seller lists.
"The Atkins economy: How to lose weight and make money with low carbohydrate diets"
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