Is Low Carb the New Low Fat?

Oct. 9, 2002 -- Keeping in shape and drinking beer might not be two ideas that people associate with each other. But that's exactly the image Michelob was touting as it put a new low-carbohydrate beer on sale across the nation last week.

Introduced in print ads showing fit men and women out for a run, Michelob Ultra boasts 2.6 grams of carbohydrates — the lowest of any competing light beer.

While a low-carb beer might seem like an oxymoron, the firm is not the only food and beverage company to jump on the low-carb bandwagon. Since 2000, 816 new products making a low- or no-carb claim were introduced into the marketplace, according to market research firm Productscan Online.

That's because many Americans are shunning high-carbohydrate foods in favor of high-protein, low-carb alternatives. Eaters are driven partly by the popularity of high-protein diets like the Zone and Atkins, and partly by recent questions over whether the government-recommended high-carb, low-fat "food pyramid" really helps people lose weight.

Companies are certainly taking notice. Love those muffins, but can't have the carbs? Try Carbsense Foods' honey bran muffin mix with 16 grams of carbohydrates per two-muffin serving. Got a hankering for bagels? You can have some from Atkins Nutritionals that have 12 grams of carbs per bagel. Pasta craving? Try Due Amici Pasta Lite, which has 10 grams of carbs — and 28 grams of protein — per serving.

"Manufacturers are marketing these products not only to those interested in weight loss and physical fitness; they're also tying them into the ever-growing segment of the population of diabetics," says Suzanna Eygabroat, Productscan's manager of information services.

Low-Fat’s Heyday Done

For years, "low-fat" was the hot buzzword for food companies, with products like Snackwell's cookies and fat-free salad dressings lining supermarket aisles. Just a few years back, in 1996-97, some 38 percent of new product launches had low-fat claims,according to Chicago-based market research company Information Resources Inc.

But waning consumer interest in these products has prompted firms to scale back. Indeed, the percentage of new low-fat products dropped to 11 percent of all new launches last year, according to IRI.

That leaves room for some smaller players to fill a niche for the health-conscious consumer.

Atkins Nutritionals, which came onto the scene six years ago with high-protein shakes and bars, started making foods like breads, breakfast and bakery items about a year and a half ago to allow dieters to more easily follow the Atkins Diet regime.

And Carbsense, a low-carb food manufacturer based in Hood River, Ore., has managed to get its products distributed in all 50 states since just April. The company is close to finalizing some deals that would put its items in five different supermarkets in the Northeast, says Kevin Dalrymple, the company's vice president of sales and marketing.

"I'm absolutely amazed," says Dalrymple. "My job has been so easy. If I introduce our company and send samples, the deal is done."

Low-Carb Buzz

These companies readily admit that their sales don't exactly threaten those of more established food companies.

Atkins expects to have sales of more than $100 million this year, while Carbsense is hoping for a more modest $2 million. By contrast, the low-fat food category represents around $5 billion in sales, according to IRI.

But there are signs that some larger companies are getting into the action.

The low-carb Michelob Ultra, one of Anheuser-Busch's stable of beers, was sparked by market research about 18 months ago, says Pat McGauley, Michelob's director of high-end brands. The company started test marketing the low-carb beer last December in Tucson, Denver and Fort Meyers, Fla., and expanded it into four other markets in May.

"We had a really tremendous amount of buzz in these test markets," says McGauley, noting that the low-carbohydrate factor was "an interesting point of difference. This is what many consumers are interested in."

Miller Light, which has 3.2 grams of carbohydrates per 12-ounce serving, has also started to position itself as a low-carbohydrate alternative to beer. (Miller Genuine Draft and Miller High Life both have 13 grams of carbohydrates per serving.)

The brewer has been running print ads this summer in consumer magazines like Entertainment Weekly with the tag line "Low Carbs. Low Calories. Great Taste."

The point of the ad is "to convey a third point in terms of what Miller Lite has to offer," says Ron Acosta, the brand's communications manager.

And if more consumers show an interest in high protein, low-carb fare, more companies may respond. A recent study from NPDFoodworld showed the consumption of high-protein breakfast foods like eggs, sausage and bacon is at a 10-year high.

"When you see something affecting a meal occasion, you take notice," says NPD Group Vice President Harry Balzer.

Low Carbs Not Cheap

How much success these products have in the marketplace remains to be seen. Some analysts say the fickle nature of American diet trends, as well as confusion over what is really good for you, may make more mainstream food companies hesitant to embrace low carbs.

"It's a little dangerous because, as you know, what's good for you seems to change with awful lot of regularity," says Bob Goldin, executive vice president at Chicago-based food service consultant Technomic. "I don't think anybody is going to rush into it at this point."

In addition, the process of actually making low-carbohydrate foods is still relatively new and expensive, with costs getting passed on to consumers.

For example, Atkins Nutritional's muffin mix retails for around $5.09 — a hefty premium to what regular mixes sell for. That's because most low-carb products use an isolated form of soy protein instead of flour — an ingredient that is still relatively expensive.

"These products are not cheap by any means," says Carbsense's Dalrymple, adding, "Just starting out in a niche market, the marketing costs are extremely expensive."

But industry insiders say as demand increases and manufacturing processes for soy products improve, prices may start to come down somewhat.

"As our volumes go up and we're able to produce the products more efficiently, we have been able to pass on the savings to consumers," predicts Matt Wiant, Atkins Nutritionals' chief marketing officer.

Consumers Pick and Choose

As with any new product, many consumers are still experimenting with what they like and what works for their diets.

Kathie Fulgham, a public relations manager for the Tennessee Aquarium in Chattanooga who's been on a high-protein regime for 3 ½ years, says she prefers Atkins' cinnamon-flavored nutrition bars and Zone bars, which she thinks are the only ones that don't have a "funny aftertaste." But an experiment with Atkins' bread and muffin mix yielded mixed results.

"I was desperate to have a sandwich and the bread was not good," she says. "It just didn't work for sliced bread, but it was great for muffins."

Katherine Voss of Atlanta, who has been doing a medically supervised low-carb diet for eight years, says she eats high-protein bars when she's traveling and knows she's going to need high-protein alternatives, but says she's been disappointed in the taste of many of the options. Plus, at a price of almost $3 apiece, she finds the cost can be prohibitive.

"I try not to buy them too much because they're very expensive," she says.