Consumers are starving for low-carb products, and retailers are hungry for a sale.
In a pace reflecting the level of demand, supermarkets are setting up displays or marking special products as fast as they can to meet customer requests for Center Store products with lower carbohydrate counts, retailers told SN.
Consumer packaged goods manufacturers have been increasing their output of such products in categories that range from beer to ice cream, making them suitable for people following the guidelines of diets like the Atkins or South Beach plans. As a result, grocers have been able to add more products to their everyday mix. Industry veterans said that, based on the current landscape, the low-carb "trend" looks to have more staying power than some of the half-baked diets of years past.
"There's no question the category is absolutely on fire," said Andy Knoblauch, vice president of sales and marketing, Coborn's, St. Cloud, Minn. "I see [low-carb] as a category that is definitely going to continue to grow. Our sales have been excellent, and we just keep expanding the sections."
In the past month and a half, Atkins products were added to any Coborn's stores that didn't already carry the brand, and "we now have a minimum of a four-foot section in every store that we have," Knoblauch told SN. Coborn's operates stores under the Coborn's, Little Dukes and Cash Wise banners.
The retailer also buys a line directly from Keto Foods -- a Tinton Falls, N.J.-based manufacturer of low-carb groceries -- and is also starting to add low-carb lines from its specialty foods and natural and organic foods suppliers. In stores, Coborn's is increasing the amount of space devoted to these items.
"In one of our Cash Wise stores, we just went to a 28-foot set of just low-carb product, which has got to be one of the biggest sections in this state. We were real big in natural foods and having separate natural foods sections, and somehow that product started there even though it's not natural or organic. That seems to be where our customers are looking for it," he said.
Placing low-carb products, or any item marketed as being diet-based, in natural sets is becoming more commonplace in the supermarket channel. While this placement doesn't guarantee ultimate sales success, it does make sense considering the traffic patterns of health-conscious shoppers.
"It's a healthy set. Natural and organic is synonymous with healthy in the consumer's mind," said Scott Van Winkle, a principal who specializes in natural foods at the Boston-based investment bank Adams, Harkness & Hill. "The products can move faster in and off the shelves there."
Van Winkle added that if low-carb stays the present course, it will likely follow the same path that natural and organic foods did in the 1990s. "That category was growing 15% to 20% a year," he noted.
Although a spokeswoman for Wegmans Food Markets, Rochester, N.Y., declined to be interviewed, Mary Ellen Burris, vice president of consumer affairs, talked about the low-carb craze in a recent online column. In it, she said the chain has added many new lower-carb products to meet the growing demand. Like Coborn's, Wegmans offers products such as Darielle Pasta and Food for Life Low Carbohydrate Bread in its all-natural sections. However, the chain also carries low-carb items in the main grocery aisles, including most of the Atkins-branded products, which consist of pancake mixes, syrups, chocolates and nutrition bars, to name a few.
At San Antonio-based H. E. Butt Grocery Co., the retailer displays the Atkins packaged breads on a separate fixture near the bakery department, Debbie Lindsey Opel, director of public affairs and advertising for the south Texas region of H-E-B, told SN.
''Definitely, we're seeing an increased demand for low-carb products. We're continuing to merchandise the [Atkins] bread on a dedicated fixture so it can be a showcase for customers," she said. "As we see more vendors who produce these products, we'll evaluate the choices and incorporate them."
While the low-carb packaged breads and nutrition bars are currently the products raking in the most dough, there is no doubt that CPG manufacturers will continue to roll out low-carb concoctions in even more categories in the near future.
"I think you're going to see lots of options," said Kimberly Kirchherr, corporate dietician for Albertsons' Chicago-based Jewel-Osco division. "People like variety, and consumer request and interest are what's driving these products appearing on shelves."
Jewel-Osco carries an assortment of low-carb items under the Atkins brand, and also offers Brownberry-branded breads. Additional low-carb items are carried in categories including pasta, ice cream, nutrition bars, tortillas, tacos, cookies and beverages.
"We try to stay ahead of what's going on, and it's good to have a choice," Kirchherr said. "People need to read labels and see if the product fits into their lifestyle just like they would any other product."
To aid in the consumer education process, Jewel-Osco will soon be rolling out shelf tags for its low-carb selections, which the retailer places on endcaps and also in-aisle. A&P, Montvale, N.J., recently began doing the same thing, adding colorful "Low Carb" shelf tags emblazoned in two shades of purple. The tags highlight dietary choices integrated within the grocery aisles.
The dieting craze that is sweeping the United States is not only boosting sales of low-carb groceries, it's also lifting sales of other protein-heavy items, sources report.
For example, Food Lion, Salisbury, N.C., is experiencing a sales boon in sausages and bacon, both the traditional kind and the heat-and-eat varieties, according to the retailer's spokesman, Jeff Lowrance.
"We have seen increases in breakfast meat sales that we're attributing to the growth of the Atkins diet," he told SN.
Snack foods may soon "feel the burn" as well, suggested Van Winkle of the Boston-based investment firm.
"I think you're going to start to see more interest in the snack category," he said. "We've already seen things like beef jerky start to benefit, but I'm thinking things like peanuts over potato chips. We will see a movement in categories; peanut sales will grow faster than chip sales. Eggs are going to benefit here -- hard-boiled eggs become your snack food."
All in all, supermarkets are poised to take advantage of the current surge in demand for low-carb groceries, but consumers will ultimately determine the duration of the trend's popularity.
"I'm seeing a huge amount of curiosity from customers about low-carb products and requests for specific low-carb brand names," said Leah McGrath, corporate dietitian for Ingles Markets, Asheville, N.C. "I started getting calls from people who were asking, do we carry, will we carry, this product and that's put supermarkets in this scramble to keep up with this demand for these lower-carb products. Every year you see a trend that seems to make itself evident, and [low-carb] seems to be what you'll see in the market in the coming year. It's like a 'if you put it on the shelf, they will come' type of thing."
