Monday, August 01, 2005

Atkins Bankruptcy Means Nothing Regarding Future Of Low-Carb

You knew the media was going to have a field day blasting away at the Atkins diet after the news that the company that makes the low-carb bars, shakes and other convenience products for people livin' la vida low-carb has filed for bankruptcy.

Just in case you've been living under a rock today and haven't heard the news, the New York-based Atkins Nutritionals, Inc. filed for Chapter 11 protection today as slumping sales have led to a debt of nearly $300 million.

That was all the salivating media needed today to begin feasting on their hatred for the Atkins diet.

Look at these vicious and conniving headlines:

"Atkins Files for Bankruptcy as Low-Carbohydrate Trend Fades"
"Thin times for Atkins diet"
"New Atkins Diet Plan: Chapter 11"
"Low on Carbs, and Funds, Atkins Files for Bankruptcy"
"Atkins bubble bursts as stars get fed up with diet"
"Doughless Atkins diet goes belly up"
"The beginning of the end for Atkins?"

Citing all kinds of experts in both business and health, story after story trumpeted the end of the "Atkins craze" as the news about the bankruptcy spread from coast to coast via radio, television and the Internet. But all of this doom and gloom is really much ado about nothing because most people who even casually follow business news realized Atkins Nutritionals, Inc. has been in financial trouble for quite a while. Today's news did not come as a shock to anybody in the low-carb industry despite the comical feeding frenzy that ensued across the media about this announcement.

When the Atkins diet was burning white hot in 2003 and the first part of 2004, everybody and their momma was trying to cash in on the biggest weight loss trend in the history of the United States. Carb this and carb that started popping up all over the place. Even companies that couldn't care less about low-carb products saw dollar signs and tried to capitalize on the success that the Atkins diet was having. Atkins Nutritonals, Inc. paved the way for many companies to get in on the low-carb bandwagon. Boy oh boy, did they ever start making product after useless, er, I mean, low-carb product. Well, at least that's how they were trying to market most of that junk they put on the shelves.

Predictably, when these other companies started pumping out products like there was no tomorrow (most of which I would not at all consider "low-carb"), the market became so overly saturated with low-carb products that I'm sure most consumers were left scratching their heads about what to purchase. I talk about this subject at great length in my upcoming book, "Livin' La Vida Low-Carb" (due out on and Barnes & Noble in early 2006). The market forces have been in place ever since making necessary adjustments based on the buying habits of the low-carb consumer.

The products distributed by Atkins Nutritionals, Inc. are no exception.

While the Atkins bars continue to be the market leaders among healthy diet nutritional bars, some of the other products offered by Atkins Nutritionals, Inc. probably needed to be discontinued a long time ago. That's the reality of the situation that is difficult to swallow when everything you sell used to fly off the shelves like it was going out of style. Atkins Nutritionals, Inc. and other companies probably got so spoiled on the success they were seeing a couple of years ago and did not purge certain products that just needed to go away. Businesses deal with this inventory problem every day of the week and it has now hit the low-carb industry hard. The key is to find those products that do sell well and push those hard. This is Economics 101 people.

So what happens now? Is this the end of low-carb as we know it? Not hardly!

While Atkins Nutritionals, Inc. will go through a very difficult transition period during their bankruptcy, people will still be able to purchase their favorite Atkins bars and shakes as they always have. The products that have sold well will continue to be available for consumers to purchase. Just as major retail chain K-mart filed for bankruptcy in 2002 and remained in business after closing some stores, so too will Atkins Nutritionals, Inc. continue to lead the way with low-carb products that people will want to buy. I have every bit of faith that the company behind the weight loss program that transformed my life completely will come through this experience stronger and better able to serve the low-carb customer base.

To be honest, other than a few months of eating some of the Atkins Advantage Bars (Peanut Butter is my favorite!), I haven't really consumed a lot of the products from Atkins Nutritonals, Inc. When you are livin' la vida low-carb, there are so many naturally low-carb options available that I did not feel the need to spend my money on these products. However, I know many people who live and die by these products, so I guess it is all a matter of personal taste and desire.

Although the bankruptcy announcement by Atkins Nutritionals, Inc. is truly unfortunate, it really means nothing regarding the future of low-carb. According to the latest Opinion Dynamics Corp. poll, the popularity of low-carb is at an all-time high in 2005. As I have been stating for months since I lost 180 pounds following the Atkins diet program, the demise of the Atkins diet is greatly exaggerated.

Livin' la vida low-carb will continue to be the weight loss option of choice for people who are fed up with the failed low-fat/low-calorie/portion-controlled diets that are shoved down our throats by so-called health "experts," the government, and the media.

Let them have their fun ridiculing the Atkins diet this week. But those of us who have made low-carb eating a real lifestyle change will have the last laugh.

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Blogger Hannah Sutter said...


It doesn't suprise me, the press in the UK had a field day for a week when Atkins subsiduary Atkins UK folded earlier this year. Interestingly we are picking up additional listings with retailers all the time. The latest one Tesco, which is stocking our products.

We all lived through the same thing during dotcom land. A gold rush mentality that subsides and the companies who focus on keeping going eventually win through - Look at ebay, amazon and google - all written off in 2001!

Personally i am looking forward to a period of managed growth..Keep up the good work

Go Lower

8/02/2005 5:21 AM  
Blogger Intern said...

I agree with you about the media: they were relishing the opportunity to criticize low carb eating. I wonder why the media is so quick to discredit this diet? Do they always respond this way to something innovative, different and effective?

8/02/2005 5:29 PM  
Blogger Connie said...

Jimmy, I've been meaning to write to you earlier, but this time I had to write back, because in this post, you do make some very insightful observations.

I loved how you dug up all these headlines crowing about the demise of low carb.

These reporters -- of which I'm one (though on my own now) -- really don't cover the low-carb story accurately, and I find that annoying, if not embarrassing!

Anyhow, I just wanted you to know that I cited your entry in a post I made on my SugarShockBlog about the Atkins Nutritionals bankruptcy.

Jimmy, while you and I don't exactly see eye to eye on everything, I do check your blog from time to time, and I laud you for some astute, insightful entries and for keeping so up to date and following lots of trends, etc.

Oh, and congrats on finishing your book! Very cool! (I'm actually in a similiar situation -- just finished a book, too. Phew!)

Anyhow, glad to meet you! And keep up the good work.


8/02/2005 7:25 PM  

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