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August 11, 2005
Pounds fall off, but so do the dollars
Atkins revolution falters as diet food firm files for bankruptcy protection in US with losses of $340m reports Jamie Wilson
It was, many agreed, the perfect diet. From the Hollywood film star who needed to squeeze into that unfeasibly tight Oscar-night dress, to the truck driver from Oldham who couldn’t start the day without piling into a plate of bacon and eggs, Atkins was for you.
Geri Halliwell seemed to go from well-built to waif overnight, while Jennifer Aniston, Victoria Beckham, Renée Zellweger and even the former vice-president Al Gore were said to have used the diet to slim down.
It might have given you bad breath –– a side effect of the body breaking down its own fats –– but for a while there seemed to be no stopping the low-carbohydrate lifestyle.
But if evidence were ever needed of the fickleness of the diet market and changing fashions in the fight against flab, it came very recently.
The once mighty Atkins Nutritionals Inc, the multimillion dollar company that produces the low-carb products that feed the diet craze, filed for bankruptcy protection in a Manhattan court after recording a loss of $340m (£192m) last year.
The company faltered as the diet fad, it helped to create started to wane and sales of low-carb products slowed in the second half of last year.
Atkins also found itself fighting on two fronts. Firstly, it had to battle against other high profile diets. Secondly, Atkins had to compete against low-carb products from some of the giants of the food industry.
The decision to file for chapter 11 bankruptcy protection allows the company time to reorganize itself by giving it protection from its creditors.
It comes less than six months after administrators were appointed to the UK arm of Atkins Nutritionals after the business –– based at Ashby de la Zouch in Leicestershire –– was hit by poor sales and amassed heavy debts.
About 30 million people in the United States and three million in the UK are believed to have tried the controversial diet at one time or another. It advocates high meat, fish and egg consumption, and a severely limited intake of carbohydrates such as bread, rice, pasta and starchy vegetables.
The plan was the brainchild of Robert Atkins, an American cardiologist who, at the age of 33, looked in the mirror and decided he didn’t like the portly, triple-chinned creature staring back at him.
He embarked on the revolutionary low-carb diet after reading a research paper in a medical journal and shed the pounds. His first book, Dr Atkins Diet Revolution, was published in 1972 and became an instant bestseller.
But it was not until the late 1990s that the business really took off, with the high-protein diet making a comeback against other low-fat programmes, that had cornered the market for the previous two decades.
In 1998 Dr Atkins formed Atkins Nutritionals to create food for those on his diet. Its revenues eventually reached a reported $100m.
But while the medical profession has been consistently sceptical of the low-carb lifestyle, with hindsight the company’s current travails can perhaps be traced back to April 18 2002, when, after a breakfast of bacon, sausages and eggs, Dr Atkins’s heart stopped and he collapsed in his Manhattan apartment.
He was rushed to hospital where he was diagnosed as having suffered a heart attack.
Worse was to come both for the doctor and for the diet. In April 2003, Dr Atkins slipped on an icy New York pavement, fell into a coma and died.
His medical records, released “in error” by the New York medical examiner’s office, indicated that he weighed more than 18 stone and was suffering from heart disease at the time of his demise.
A rash of headlines including: “Atkins diet may cut chance of pregnancy” and “Official: Atkins diet can be deadly” also took their toll on the company’s fortunes.
One man sued last year, claiming that the diet caused him severe heart disease, although Atkins Nutritionals has maintained the claim is without merit.
The privately owned company owes more than $300m (£169.7m) and is understood to have reached an agreement with the majority of its lenders to give them equity in exchange for lowered debt.
Atkins Nurtritionals has received $25m (£14.1m) in financing to operate during the bankruptcy proceedings, which will not affect its day-to-day operations. Recently, Mark Rodriguez, president and chief executive, said the company had “adjusted our organization to accommodate a smaller business” in the past year.
He added that Atkins would promote its brands “more broadly for consumers who are concerned about health and wellness,” and after leaving bankruptcy would focus on nutrition bars and shakes.
The company has been trying
hard to cut costs –– in September it started paying off 40 per cent of its workforce, cut its 2005 marketing budget by almost half and reduced the number of products it sold from 150 to 80.
Many in the medical profession will no doubt be relieved at the apparent demise of Atkins –– and they may not be the only ones allowing themselves a wry smile over their breakfasts this morning.
For the pasta and potato industries the low-carb craze spelt disaster as their products were shunned on the supermarket shelves. They may take comfort in the fickleness of the western diet. — Dawn/Guardian Service
Three popular diets
Atkins diet
Breakfast: Two poached eggs over fried green tomatoes. Two strips of nitrate-free meat
Lunch: Grilled turkey burger with pepper-jack cheese and green salsa, creamy red cabbage slaw
Dinner: Cajun pork chops, sauteed kale with red pepper dressing, Atkins cornbread
Snack: Spiced pumpkin seeds
GI diet plan
Breakfast: Bowl of porridge made from traditional oats and skimmed milk, sweetened with a little honey. Plus a pear
Mid morning: One pot low-fat fruit yoghurt and a banana.
Lunch: Bowl of lentil soup, open tuna sandwich made with two slices of wholegrain bread, a scrape of low-fat spread and tuna in brine. Plus a handful of cherries.
Mid afternoon: Small pack of low-fat crisps
Dinner: Spaghetti bolognese (made from extra lean minced beef and lots of vegetables) served with wholewheat spaghetti and salad
South Beach diet plan:
Breakfast: Two eggs scrambled with fresh herbs and mushrooms and two rashers grilled lean meat. Small glass of tomato juice and a decaf coffee or tea
Morning snack: One small chunk of reduced fat cheddar cheese
Lunch: Chicken caesar salad (no croutons) with two tbsp caesar dressing
Afternoon snack: Three tbsp low-fat cottage cheese with one tomato and cucumber
Dinner: Grilled salmon with steamed asparagus and a salad of mixed leaves, cucumber, green pepper, cherry tomatoes and two tbsp low-sugar dressing.
Dessert: Chilled lemon ricotta crème made by mixing 115g (4oz) reduced fat ricotta cheese with a little sweetener and 1/4tsp each of lemon zest and vanilla extract.
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