Bacon aficionados loved it. It horrified others. Even if its following is fading, the Atkins diet has been tremendously popular and successful, so why is Atkins Nutritionals going broke? The idea that health gains can be had in spite of largely unlimited consumption of foods high in animal and saturated fats, like bacon, is still popular but controversial. When the Atkins organization recently filed for Chapter 11 protection from its creditors, some even said it fell victim to its own marketing triumph.
In the diet (or any other) industry, nothing attracts imitators like success. Entrepreneurs will flock to compete in any venture that is earning exceptionally high profit. First introduced in the 1970s, Atkins didn’t generate much market interest until the (slightly) revised diet book appeared in the late 1990s. The reintroduced low-carbohydrate idea hit the weight loss market just right, and the Atkins diet became a virtual low-carb craze. So what happened?
By the time Atkins Nutritionals were introducing low-carb convenience products like Atkins brand breads, pastas, mixes, and cereals, other suppliers were already in on the act. Competitors offered their low-carb foods more affordably than the pricey Atkins versions. And consumers, enthusiastic about the diet, responded accordingly and bought up low-carb products in cheaper brands. Eventually, lackluster Atkins-brand sales helped figure into the company’s poor bottom line.
Compared to the 1970s, when diet support groups became marketable items, diet plans today have become a virtual boutique industry. There are now diets that appeal to practically every potential diet client’s preferences; Weight Watchers, Scarsdale, Macrobiotic, Jenny Craig, Nutri-System, Zone, Blood Type, and many other diet plans have proliferated. Most also have some proprietary/membership features: meetings, documents, or foods, and each has had its own appeal. Because Atkins requires nothing more than an Atkins diet book, or an appropriate carbohydrate counter, the company has made no inroads toward continued spending from its diet clients, another source of financial difficulty.
With the death of Dr. Robert Atkins in 2003, critics have become especially vocal. Despite critics, however, 2002 and 2003 marked the introduction of thousands of products geared toward low-carbohydrate eating. In some cases, existing products were reformulated to appeal to carb-conscious consumers, not always with success. North Carolina-based Krispy Kreme’s experiment with a low-carb donut was an attempt to maintain sales in the face of a market driven by carbohydrate high fat, high-protein diets, and the vitamin and mineral benefits of some high-carb foods are generating new ad campaigns for the maligned carbohydrate. The Potato Board plans to spend millions “to propound the straight facts about [their] tasty tubers.”
Easy, inexpensive access to the principles of the Atkins diet, and its use of foods ‘forbidden’ in other diets’ regimes helped create the low-carb Atkins craze. But with no plan to propel additional spending on Atkins products or services, the company has been unable to capture a lion’s share of the low-carb market it inspired. In a weight-loss market that is both open and dynamic, a good idea isn’t enough to guarantee success. If other weight loss promotions are an example, financial success requires ancillary sales as well.
If Atkins can innovate its product, compete for diet popularity with imitators and detractors, and boost revenues, they may be able to survive in the weight-loss market. It’s fair — though extremely corny — to note that the diet industry is a dog eat (low-carb?) dog business, after all.