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Low-Carb Industry Expects Shakeout

WASHINGTON -- According to industry experts, sellers of low-carb food seem set for some thinning, as major food processors and retailers have joined the fray to drive out some smaller food brands and specialty retailers, reported the Associated Press.

"Over the next six months, there will be a significant amount of fallout," said Matthew Wiant, chief marketing officer of Atkins Nutritionals of Ronkonkoma, N.Y. The company founded by Dr. Robert Atkins promotes a line of food products as well as the low-carbohydrate eating plan.

In the early days -- Atkins' first book was published in 1972 -- low-carb processed foods were the domain of small manufacturers. That changed as demand grew. Today, Unilever, General Mills, Sara Lee and other companies sell products with a low-carb label.

Their entry has changed the market, Wiant said. "Retailers would take anything you would give them six months ago," he said. "There was a shortage of product to meet the demand. Now, retailers we are talking to are starting to say, 'We are not going to take everything from everybody,'" Wiant said.

The foods that do not get picked lose, and Wiant predicted that, of at least 2,000 products currently available, "I bet 500 won't be on the shelf by the end of the year."

The entry of big companies also affects where consumers buy foods. When low-carb eating was new, people who wanted the packaged foods went to health-food stores and other smaller retailers. As the trend grew, some small stores specialized in low-carb foods.

These days, however, low-carb foods can be found everywhere from supermarkets to drugstores. Customers who used to go to the small independent retailers now go to the big stores with greater variety of products, where "they can buy their hamburger and toilet paper and low-carb products in the same place," said Laurie Kuntz, CEO of LowCarbiz, a Denver-based trade publication.

Under the pressure of competition, some of the smaller independents that specialize in low-carb products are closing, some are diversifying and others are "just hoping that the wave will switch back to the upswing," Kuntz said.
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