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The Atkins Diet Fad: Set for a Comeback

Lisa Scherzer
Personal Finance Editor
The Exchange

As with fashion, diet fads come back. The low-carb Atkins diet, which achieved peak popularity in the early 2000s, wants you to have some more steak – again.

Ad Age reported last week that Atkins hired a new ad agency, Interpublic's (IPG) Lowe Campbell Ewald, in a bid to boost its slowly growing market share. Detroit-based Lowe Campbell Ewald said in a statement on Sept. 13 that it was awarded “a substantial piece” of Atkins’ marketing business: “Scope of work for the brand includes strategy, creative development, and production of a multimillion dollar national campaign – slated to launch early next year – that will consist of TV and print,” the firm said.

Dr. Robert Atkins popularized the diet as an effective weight-loss strategy and was met with a fair amount of controversy. Critics, for one, noted the potential for long-term health problems associated with a diet low in fiber stemming from the program's restrictions on eating fruits and vegetables in the early weight loss stages. Since Dr. Atkins died in 2003 (he slipped on icy pavement in New York after a snowstorm), the brand had languished. (One 2005 NPR report noted that, at the height of its popularity, one in 10 Americans was on the Atkins diet.)

Denver-based Atkins has been rolling out new products over the past year, including a line of frozen entrees (e.g., sesame chicken stir fry – no rice, of course) and bite-size snacks called Atkins Candies coming out next month.

In the weight-management/meal-replacement category, Atkins’ share of sales rose from 7.4% in 2011 to 8.1% in 2012, behind Herbalife’s 14% share and Kellogg’s Special K 13.8% in 2012, according to market research firm Euromonitor International. That figure was more than 10% in 2003, when the low-carb craze was in full force. According to Kantar Media, Atkins has more than tripled its advertising spending, from about $6.5 million in 2010 to more than $20 million in 2012.

Dieting: big business

The Boston Medical Center estimates that 45 million Americans diet each year and spend $33 billion a year on weight loss products. But nearly two-thirds of Americans are overweight or obese. Thus the proliferation of countless weight-loss approaches all in the name of getting skinny. According to the Calorie Control Council, more American adults were on a diet in 2010 – 54% - than in more than 20 years.

Indeed, dieting is practically a national pastime. Beyond the classic diet and nutritional supplement plans, like Weight Watchers, Jenny Craig, Slim Fast and South Beach, there are ever-narrower and restrictive spinoffs: the raw food diet, DASH diet (Dietary Approaches to Stop Hypertension), Mediterranean diet, blood type diet, rice diet (which recently shut down its operations), macrobiotic diet, Colorado diet, paleo diet and the current juicing craze.

As AdAge pointed out, it’s likely Atkins wants to capitalize on the increasing popularity of the paleolithic diet – also known as the caveman or hunter-gatherer diet. The paleo diet espouses a nutritional plan based on what our ancestors consumed, namely wild plants, meat and fish; this means no grains, salt, sugar or dairy.

Atlanta-based private equity firm Roark Capital Group, which also owns Arby's, Carvel, Auntie Anne's and Cinnabon, bought Atkins Nutritionals in 2010. "This is not the bacon double cheeseburger and T-bone diet," a managing director with Roark Capital said at the time of the purchase. "Atkins offers a well-known, research-based and clearly differentiated approach to weight loss and weight management."