Posted on 01/22/2004 10:58:51 PM PST by Cincinatus' Wife
The recent explosion of low-carbohydrate diets is starting to weigh heavily on some food producers.
Take Riviana Foods, a Houston-based company that is one of the nation's biggest distributors of branded and private-label rice. It is blaming the low-carb diet craze in part for lower profits.
Other companies that specialize in carbohydrate-laden products such as potatoes, pasta and even orange juice are also feeling the heat.
"We and other affected food marketers have yet to come up with an effective strategy to counteract these debatable diet plans," said Joseph Hafner Jr., Riviana's president and chief executive officer.
The amount of rice that Riviana sells retail was down 9 percent, as were sales of instant and prepared rice, in the quarter that ended Dec. 28.
Those figures mirrored sales declines throughout the industry, according to ACNielsen, which measures such matters.
The dropoff is significant. Riviana reported lower earnings of $5.9 million, or 40 cents a share, compared with net income of $8.5 million, or 58 cents a share, for the same period last year.
"Riviana's domestic rice business reported lower results, primarily due to changing dietary trends related to the proliferation of low-carbohydrate diets and significantly higher rice costs," the company said in a prepared statement.
ACNielsen's findings indicate that the sales of many products that are high in carbohydrates suffered.
ACNielsen said the volume of fresh bread sold in 2003 dipped 2.5 percent, pasta was down 4.6 percent, instant rice plunged 8.2 percent, and dehydrated potatoes fell 3.2 percent.
"As far as the impact on most starch-based products that are being panned, it looks like most categories are being hit in the range of 2 to 4 percent," said Kit Haines, vice-president of marketing for Riviana.
Not everyone is taking the challenge sitting down. The United States Potato Promotion Board is setting the table to battle the low-carbohydrate phenomenon.
Potato consumption is down despite the positive aspects of the product, spokeswoman Linda McCashion said.
"We are an extra-nutritious product that has just fallen off people's radar," McCashion said. "In general, the demand is down, and these diets definitely seem to be a factor."
The potato board will start fighting back in earnest next month when it kicks off a new multimillion-dollar advertising campaign.
That campaign will focus on the fact that potatoes contain everything from vitamin C to fiber to folic acid, McCashion said.
Business interests believe misinformation is being spread in diet books and other materials about higher-carbohydrate products.
"Clearly, we have seen the same decline in some of our consumption," said John Keeling of the National Potato Council. "It is a shame because all of this ignores the fact that in losing weight and being healthy, there are no silver bullets. Potatoes and other carbohydrates can and should be a valuable component of that."
Even orange juice is getting squeezed.
Flat sales recently have prompted Coca-Cola's Minute Maid unit to develop a product that contains fewer calories and carbohydrates.
"We think, for people counting carbohydrates, this will be a great product," Minute Maid spokesman Ray Crockett said.
Company officials don't have any research showing that the popularity of low-carbohydrate diets are responsible for sluggish sales, Crockett said. But they suspect it is a culprit.
"Chilled orange juice certainly has been flat for some time," he said."It is conceivable some of that could be attributed to it."
As a result, the company is responding with a product that will have roughly half the calories and carbohydrates of Minute Maid Premium.
The rollout of the new brand will come sometime during the first half of the year, he said.
A new line of so-called "light" Minute Maid juice-based drinks also will be available in plastic bottles next month, Crockett said.
In Florida, the orange juice industry will spend $1.8 million on a marketing campaign to convince consumers that orange juice can be compatible with regimens such as the Atkins Diet.
At Fort Worth-based Mrs Baird's, spokesman David Margulies said more attention is being paid to diets now because it is right after the first of the year and many people have vowed to lose weight.
"We have surveys that show the number of people on Atkins actually has gone down," Margulies said. "Most people have figured out that if you eat a healthy diet, a balanced diet, and exercise a little bit, you are not going to have a weight problem. Bread is still a staple product."
Mrs Baird's has a large plant in Houston, he noted.
The issue in the bread industry right now is coming up with a greater variety of breads, which include some with fewer carbohydrates, he noted.
Oroweat, owned by Bimbo USA, has a new "Carb Counting" bread on the market.
And at Riviana, the one product that has not been hurt is brown rice, because it is acceptable on many of the low-carbohydrate diets.
The company has several major promotions coming up that focus on brown rice, company officials said.
The "considerable" impact that low-carbohydrate diets have had on Riviana has been offset by the company's continued strong results from Kern and Pozuelo, its Central American businesses.
"The recent peaceful demonstrations in Guatemala, successful CAFTA negotiations and continued economic growth are positive signs for our operations," Hafner said.
Riviana favors the Central American Free Trade Agreement, particularly because it has those operations in the region and ships products from there back to the United States.
It's a heartbreaker!
My idea of a low carb diet is laying off beer, for starters -- then food and water, to shake off those last few tenacious pounds.
I eat what ever I want whenever I want.
I have never paid any attention to diet fads, including the anti-cancer bran muffin craze..
However....
I am also sometimes liable to to eat only once a day, sometimes a large meal, sometimes no more than a bowl of cereal. ( I love Raisin Bran.. with lots of sugar. )
I drink coffee constantly, (more like tea in strength) and smoke.
I get into food ruts..
I will eat nothing but tortilla chips, salsa and nacho cheese for a week..
I will make up a gallon of "chili" (or my facsimile thereof) and roll out a couple dozen flour tortillas, and eat nothing else until it's gone..
I will get into salad ruts, chinese stir fry ruts, go on burrito marathons...
I have a bread machine, and make my own bread and rolls. ( mmmm.. hot rolls!!! with lots of butter!!! )
I have never been able to gain weight.. wish I could actually put on a few pounds...
I will probably go to my grave looking like a scrawny scarecrow.
You burn fuel like a gas guzzler. A lot of us are fuel efficient and don't need so many carbs.
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