HARD-HIT GROCERY CATEGORIES LOSE CARBS 2004-01-19 (1)

JON SPRINGER

NEW YORK -- Eager retailers are beginning to see new low-carbohydrate products in categories like pasta and bread, where diet trends have slimmed sales.

"We've been pressuring our vendors to come up with products that meet the needs of our customers who want lower-carb options," said Kevin McFadden, bakery category manager for Schnuck Markets, St. Louis. "And it seems a lot of companies are addressing the issue of taste now."

Reduced-carb breads from Sara Lee and Interstate Bakeries Corp., and a lower-carb refrigerated pasta line from Monterrey Pasta, are among the options rolling out in recent weeks. Earlier this month, Unilever Bestfoods North America launched its 18-product, co-branded line, called Carb Options [see "Umbrella Low-Carb Line to Hit Stores," SN, Jan. 5, 2004].

Overall, breads and pastas are feeling the low-carb crunch. Bread dropped 1.1% in year-over-year unit sales, according to current figures from Chicago-based Information Resources Inc., and pasta was flat in both dollar and unit sales, IRI reported.

"Low-carb diets have definitely had an impact, mainly on our processed white breads. But [they've] also cut across the board into pasta and pizza," said McFadden, adding that lower-carb breads have struggled in part because they tend to "lack the mouthfeel and consistency of traditional breads."

Other retailers report they have had difficulty finding acceptable low-carb items in the bakery aisle. "Our fresh bakery is where we've been hit the hardest [by the low-carb diet craze] because it's an area where we haven't yet found a quality low-carb product," said Dennis Darling, president of Foods Etc., a two-store operation based in Clearlake, Calif., about 70 miles north of San Francisco.

"Right now, we're integrating low-carb products into our sections and seeing an introduction of low-carb breads into the area. We set up off-shelf displays for those," Darling said. "Low-carb has been a success for us, but maybe not as dramatic as you might see in more urban areas. What we've seen is meat sales boom, but also a decrease in bakery."

Cleveland Heights, Ohio-based Zagara's Marketplace carries a wide variety of low-carb foods, including newly released Carb-Cutting Wheat Tortillas from La Tortilla Factory, Darielle pasta, Atkins frozen products and low-carb breads from Roman Meal and Natural Ovens Bakery.

"When we first introduced the Atkins products, there was a bit of a bang -- but it's leveled off some," said John Zagara, store director. "We're getting repeat sales from people who are loyal to the program. But if it doesn't taste good, you don't want to try it again. They've got to make it taste good."

Indeed, Sara Lee's new Delightful Bakery breads aim to appeal to those who want to cut down on carbohydrates and fat, but who feel that low-carb diets are either not healthy or ineffective over a long term, according to the St. Louis-based baker.

As it has done with other reduced-carb foods, Schnucks is featuring Sara Lee's new breads in a special display for about a month, said McFadden, "until people become aware of it. After that, we'll put it in the regular bread section because we want our shoppers to come into the bread aisle and compare the different products."

Besides Sara Lee, Schnucks also carries reduced-carb breads from Lewis Bakery and George Weston, and plans to add a new lower-carb product from IBC's Home Pride label.

Meanwhile, Salinas, Calif.-based Monterrey Pasta Co. is trying to address flat sales in the refrigerated pasta category with a new line of Carb-Smart pastas, sauces and entrees, available at King Soopers and Wegman's, among others.