Atkins Nutritionals files for bankruptcy protection

August 4, 2005

Hmmm...maybe now they will stay away from the junk low carb stuff.

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By Theresa , USA TODAY

NEW YORK — Citing heavy debt, the death of its namesake founder and a

drop in low-carb dieting, Atkins Nutritionals, filed for Chapter 11

bankruptcy on Sunday.

The company behind the high-protein diet that shunned carb-rich foods

such as pasta helped spark the low-carb craze. But packaged foods and

supermarket expert Phil Lempert says that Atkins products, such as

low-carb shakes, breads and bars, failed the taste test.

" It was first and it owned the category, but the problems from a

consumer standpoint were that the products tasted really bad and

consumers are still confused about net carbs, " says Lempert of

Supermarket.com. " A lot of people who really wanted to follow the

low-carb diet were feeling ripped off. Clearly, they had the

front-line position, but they really gave it away. "

Atkins, who founded the company in 1989, died in 2003. The loss

of a pitchman may have contributed to Atkins' troubles, says

Braverman, a former research director for Atkins and the director of a

medical practice in New York. " Unless they have a spokesperson equally

as zealous as him, it's not likely to succeed, " he says.

The low-carb craze helped the company put its licensed signature red

" A " on Atkins-friendly menus at fast food joints such as Subway and

casual dining restaurants such as T.G.I. Friday's. But the diet's huge

popularity also attracted giant packaged-food competitors such as

Kraft into low-carb products.

Meanwhile, there's been a sharp drop in low-carb dieters, from a peak

of 9% of U.S. adults in 2004 saying they were on the diet to 2.2% last

month, according to market research firm NPD Group.

" The low-carb trend has sort of died on the vine, " said Bob Goldin,

executive vice president at Chicago-based food industry consulting

firm Technomic.

Braverman, who has used variations of the Atkins diet for the past 20

years to help diabetic and obese patients, says Atkins may be able to

emerge by focusing on other diets pioneered by Atkins.

" He did not have one diet for everyone, " says Braverman. " He had many

different diets, and good diet and nutrition is the cornerstone for

the medical practice. "

Contributing: Wire reports

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