Thankfully the fad seems to be fading once again. Based on surveys of thousands of American adults, the low carb craze seems to have peaked around January 2004 and is expected to continue to drop according to food-industry analysts at Morgan Stanley. Most industry analysts and consultants are now suggesting that this latest low carb wave is indeed a passing fad.  According to Fortune magazine, data show that the number of Americans on a low carb diet has fallen 25% since January.
The American public seems to be finally waking up to the truth. In one survey, for example, fewer than one in five consumers surveyed said they would even consider purchasing a low carb product. Reasons given for not choosing low carb included beliefs that low carb diets were neither healthy nor effective.
Declining demand is starting to affect the low carb corporate bottom-line. Food gants clamored onto the bandwagon, Maclean’s noted,“just as its wheels started to fall off.” Food manufacturers are being stuck with backlogs of low carb products and a number of planned low carb lines have been scuttled thanks to disappointing sales. Articles with titles like this one from Forbes Magazine: “A low-carb retailing disaster: A pack of entrepreneurs chased the low-carb dream–over a cliff” have started appearing with more frequency in the business journals. “There’s been a bloodbath in the industry,” admits the head of the low-carb business association. The Wall Street Journal calls this phenomenon the “food-fad effect.”
“It reminds me a lot of investors who around 1999 thought it would be a great time to invest in tech funds, and then proceeded to lose their pants,” says the executive editor of an industry trends publication. “The pattern is very, very similar.”
A year ago, the Atkins empire couldn’t crank out products fast enough. Now, retailers are discounting them. By the second quarter of 2004, low carb product sales growth was cut in half. Layoffs at the Atkins Corporation started in September 2004.
Food industry researchers conclude that consumers seem to be finally wising up to the health risks. “It defied logic,” said one industry expert, “Bacon is better for you than orange juice. Yeah, right.”
Or as one Wall Street analyst explained, “Have you ever tried low carb bread?”