The emergence of Atkins Nutritionals from Chapter 11 bankruptcy last month is more than a story about a company on the rebound. It is an important reminder that - in the health and wellness business, at least - it's better to focus on long-term lifestyle changes than to jump on hot trends.
At the height of the low-carb phenomenon, led by the Atkins diet plan, the company marketed more than 300 products. Now, it is back to offering some 60 items centered around its original nutrition bars and shakes.
"We have credibility based on our heritage, but we can stand for so much more and target a much broader audience," said Beth Neumann, Atkins' vice president and chief marketing officer. She added that the products are not just for dieters, but people looking to eat smarter.
"These are people looking for health and nutrition. They're not even dieting," she said.
This shift from low-carb to a broader health and wellness theme, however, carries potential trouble for a company affiliated so closely with the diet plan itself, according to observers.
"What was different about the company was the Atkins diet," said one Wall Street analyst who covers the food industry. "The company's whole reason for being was to spend against a trend there was a lot of hype around, and now that trend has totally lost out."
A successful transition to general healthfulness will depend in large part on Atkins' ability to stand out in the bar and shake aisle, two categories that are home to several other low-carb craze refugees. On the meals side, the door is firmly closed. Despite disappointing earnings and news of impending layoffs, Kraft Foods scored big with its line of South Beach Diet products, which contributed $170 million toward the company's bottom line after only 10 months on the market.
Shadows on Saw Palmetto
The estimated two million men who take saw palmetto to treat their enlarged prostates were disappointed to hear the herbal supplement performed poorly in a major study.
The examination, profiled in a recent issue of the New England Journal of Medicine, followed 225 men with moderate to severe benign prostatic hyperplasia for a year. Both the group taking the supplement and the control group showed very little change in their conditions.
Widely used as an herbal remedy, saw palmetto is derived from an Florida palm and has gained a loyal following - even among doctors - after smaller, earlier studies showed some effectiveness in easing the discomfort and frequent urination associated with BPH. Sales in the United States topped $134 million in 2004, making it one of the five most-popular herbs used for medicinal purposes.
Critics of the study note that most of the current literature cites positive results among men with symptoms milder than those in the trials.