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Nearly one in three
Americans today is considered obese—a statistic that
has grown by tens of millions in the past decade—with
millions more qualifying as overweight. This alarming assessment
continues in spite of Americans' mission to lose weight via
the latest "sure thing" diet. These fads of past
and present have impacted food and beverage marketers and
the types of products they bring to market. In the 1970s,
calorie counting became a pastime, and the introduction of
products like sugar-free Tab cola placed a focus on caloric
intake. In the 1980s, appetite suppressants like Dexatrim
ranked as a popular slimming method, and millions of women
learned how to weigh their food portions and flock to the
nearest Weight Watchers center to share their success with
others. The low-fat trend of the 1990s spawned the popular
Snackwell's brand and Lay's Wow brand, enticing consumers
to bypass fat to reduce the pounds.
While most experts agree the best prescription for maintaining
a healthy weight is moderation, balance and exercise, consumers
crave a quick-fix weight solution, and as evidenced by the
past, will try almost anything to shed the pounds. One recent
dieting fad is having a profound effect on the way consumers
are eating and the way marketers are thinking about their
products.
Low-Carb Crazy
The new millennium has proven to be the century for contrarian
thinking when it comes to dieting. In recent years, the rage
in weight-loss programs has made protein and fat the friends
and carbohydrates the foe. A leading proponent of this diet,
Dr. Robert C. Atkins, gave birth to "the controlled carbohydrate
approach to nutrition." He was the founder and medical
chair of The Atkins Center for Complementary Medicine, where
he spent over 30 years teaching patients about nutrition.
Atkins' success has helped open the door for other popular
low-carbohydrate diets, such as the South Beach diet, "Dr.
Phil" McGraw's diet plan, and the Zone diet. Atkins-style
diets became further validated when several recent studies
suggested they did indeed have merit in the battle against
weight loss and did not have any proven (to date) negative
health effects.
Americans—many eager to try a diet where red meat and
cheese are considered "good" foods—have begun
to shed pounds without tabulating points or weighing portions
on a scale. Controversy, however, still looms regarding these
high-protein, low-carb diets, especially concerns of high-fat
diets affecting cholesterol and heart disease. But regardless
of any perceived drawbacks, large numbers of Americans are
getting on board. As many as 25 million people have tried
the Atkins diet alone, according to Atkins Nutritionals, which
doesn't even include other low-carb programs. These new trends
are changing the way consumers perceive nutrition and health,
and marketers are beginning to adapt to these new regimens.
Even the famous USDA Food Pyramid is under review, and new
dietary guidelines with an updated pyramid are slated for
release in 2005.
Category Changes
The catch, however, is that while subjects can eat unlimited
amounts of certain high-protein foods, they must also avoid
carbohydrate-packed foods like breads and pastas. These diets
give the green light to eat bacon, eggs and cheese for breakfast,
but not cereal, toast and juice.
According to the latest indicators, these diets are affecting
certain food categories. For example, data from ACNielsen
Strategic Planner show that while beer sales have remained
steady, the increase of low-carb and light beers has fueled
the category. The egg category has spiked by 11% in dollar
volume compared to prior year, and the fresh meat department
has exploded over the past two years with increases of 16%
in 2003 and 35% in 2002. Other strong increases have occurred
in the deli department, nuts and dietetic/sugar-free candy
(+64% in 2003, +35% in 2002). Less dramatic, but still noteworthy,
were steady dollar volume increases in categories like packaged
meat and cheese, which are staples in high protein diets [See
chart 1].
On the flip side,
categories such as cereal, cookies and baking products have
seen a sharp decline, including decreases in cookie, muffin
and bread mixes, and yeast. Fruit juices have also been affected,
with the total category sagging by 2% and categories like
apple juice and cranberry juice experiencing double-digit
decreases. Diet colas and carbonated beverages have seen growth,
whereas their regular counterparts have shown declines [ See
chart 2 ].
The
Marketing Rush
Atkins and other low-carb diets are beginning to re-shape
the image of healthy food in the U.S., impacting different
categories in the process. In the past two years alone, more
than 800 new low-carb products have been introduced to the
market, according to ProductScan information published in
the Atlanta Journal Constitution. And there is no slowdown
in sight. With diabetes also on the rise (an almost 30% increase
from 19972002), low-carb diets have more validity and
have become even more popular with Americans. From ice cream
to beer and bread, consumers are searching for low-carb versions
of the foods they love.
One particular category that has exploded in the past year
is the health bar category. A number of years ago, the energy
bar market grew strongly, with brands like Balance and PowerBar.
However, a consumer on an Atkins-style diet would find these
bars too high in carbohydrates, and instead would choose from
the growing number of high-protein/low-carb bars available.
Recently, several new low-carb brands were introduced—Atkins
bars were introduced in 2000—and these bars have seen
as much as 90% growth in the past year. Today, the energy
health bars and sticks category includes over 200 product
brands.
The foodservice industry is catching on, too. With obesity-related
lawsuits gaining media attention, fast-food venues are under
scrutiny. Companies like McDonalds, Burger King and Hardees
are offering healthier options to satisfy consumer demand,
helping customers avoid the carbs if they wish. And Blimpie
Subs & Salads, according to Nation's Restaurant News,
recently launched a new low-carbohydrate menu.
Blimpie's low-carb offerings include sandwiches served on
low-carb bread, and low-carb chips and salad dressings. The
company estimates that the new Carb-Counter items will account
for 10 to 15 percent of their sales.
With obesity at an all-time high, the high-protein/low-carbohydrate
diets have proven effective to show results quickly, providing
an incentive to stick to it. This, however, may present a
problem to other food categories. A recent Crain's Chicago
Business article noted a Merrill Lynch analyst considered
certain food categories "at-risk" due to this new
focus.
Marketers wanting to capitalize on the low-carb diet trend
are working diligently to be the first in their category to
launch alternative low-carb versions of their products. Time
will tell if low-carbohydrate foods reach the public consciousness
the way low-fat did in years past; however, what remains clear
is that "low-carb" is the buzzword of today, and
smart marketers are taking advantage of this diet trend.
A Look at Obesity
The crisis of obesity is one that transcends borders. "Globesity,"
as termed by the World Health Organization (WHO), has become
an epidemic all over the world. The WHO estimates that globally,
there are more than one billion overweight adults, at least
300 million of them obese. These health conditions pose a
major risk for chronic diseases, including diabetes and cardiovascular
disease, and are caused by an increased consumption of energy-dense
foods high in saturated fats and sugars combined with reduced
physical activity. Obesity affects people of all ages and
socio-economic levels, and is impacting consumers, businesses
and marketers alike.
The obesity trend has created another trend in the U.S.—the
emergence of bigger everything. The business implications
of "bigger" are massive. Car manufacturers, clothes
makers, even airlines are having to accommodate the concept
of "bigger." Healthcare organizations are affected,
too. Obesity accounts for 26% of total healthcare costs,
and being overweight can have negative health risks, including
diabetes. These factors may be contributing to over-the-counter
healthcare product purchases. Products like dietetic candy,
appetite suppressants, insulin syringes and blood/urine/stool
test products showed substantial growth during 2002.
Obesity is also escalating in seismic proportions in children.
According to the Annual Report on America's Children, the
obesity rate among children and teens has doubled to almost
16%. Poor eating habits are to blame, but lack of exercise
is also a major factor. Today's society is conducive to inactivity,
with the Internet, video games and television competing for
childrens' free time.
According to the ACNielsen Homescan Panel*Views Survey on
child obesity, 90% of households are concerned with obesity
becoming an issue in their families. Most households believed
that the parent or guardian was responsible for the problem,
but also blame other sources (see chart below). Both households
with children and those without had similar attitudes, but
those without children felt stronger about responsibility.
Schools, in particular, are under intense scrutiny when it
comes to childhood obesity. In fact, more than three of every
four households believe that schools should adopt new policies
to address child obesity concerns, including taking measures
to ban unhealthy foods and beverages in some cases. Because
of the sheer volume of children they serve, schools have the
power to make a difference. In 2002, more than 25 million
American children used the federal school lunch program, and
consumers spent an estimated $13.2 billion on school food
in the U.S. Today, schools are partnering with food and beverage
marketers to offer healthier options to children, including
replacing soda with flavored milk in school vending machines.
According to the Panel*Views Survey and ACNielsen Homescan
consumer purchase data, consumers who are concerned about
obesity have different buying habits. Households with children
age seventeen and under who were reported as being "very
concerned" with obesity showed higher penetration in
categories like dietetic chocolate, diet carbonated beverages
and diet gelatin mix. Those that said they were "not
at all concerned" had lower penetration rates among the
same categories.
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