LCL Looks at the Industry
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Man's View of Valentine's Day
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The Future of Low Carb
Fiber: Not Just for Breakfast
Fixing a Low Carb Disaster
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"The world is a book, and those who do not travel, read only one page."
— Saint Augustine
Copyright © February 2005 Dan Maiullo and Low Carb Luxury
When putting together our article for Page 1:
"LCL Looks at the Industry", we asked a number of people in the business for their
thoughts on where it was all going... Most gave us a few sentences; some a few paragraphs.
But when we saw what Dan Maiullo had put together, we realized we wanted to present it to
you in its entirety. For those of you who don't know Dan, he was the co-founder of Life Services
Supplements that later became Keto Foods. Dan served as Vice President and Corporate Counsel for
Keto for over 16 years and most certainly has a unique perspective on the industry. Here then,
is Dan's account of what happened, what's still happening, and where he believes things
will go from here...
I first got involved in low carb in 1998 when my partner, Pete Maletto, began creating
low carb, high protein shakes. It was our plan to sell them to Atkins Nutritionals. However, the Atkins
organization wasn't interested in Pete's shake mixes. So we at Life Services Supplements began producing
them for our own business — in chocolate and vanilla. We called them Keto Shakes.
In short order, we began noticing huge demand for low carb fare. Keto Shakes out-sold our other
weight loss shakes by about ten to one. So we came out with more flavors. And we soon began
creating other low carb products: pancake and muffin mix, bread mix, nutrition bars, corn
chips, pasta, cereal, milk, and the list went on and on.
By 1999, there were many independent health food stores buying low carb Keto products for their
customers who were no longer interested in simply organic, or low-fat foods... they were asking
for low carb foods! It was then that Life Services began a concerted marketing effort to
get distribution of Keto products throughout these independent health food stores all over America.
Back to the Beginning. . .
The modern low carb movement had begun with the publication of Dr. Atkins first book in
1972. So by the time Keto came along, low carb was already almost 30 years old, with a
number of veteran low carbers actively purveying product around the U.S. and the world.
Keto's timing could not have been better. After years of cantankerous commentary, Dr.
Robert Atkins had brought awareness of low carb dieting to critical mass — the "tipping
At the same time, scientific studies demonstrating the safety and effectiveness
of low carb dieting were being picked up by the mainstream media and publicized to consumers.
Finally, "low carb" was gaining in respectability.
The debate in industry and Wall Street circles was this: Is low carb a trend or a fad? A
fad is something imposed by marketers on the public, makes a great deal of money for a few
people for a short time, and then dies. The perfect example is not the hoola hoop,
but the pet rock. At least the hoola hoop was fun — you could get some exercise. The
pet rock was (and still is) just dumb. People paid money for a worthless rock in a box,
just because it was the "in thing" for a while.
A trend, by contrast, is a groundswell coming from the general public. From certain
influential circles, a notion spreads due to its own merit, until the marketplace
responds to increasing demand with products and services for this new notion. A trend
is not hatched in a marketing laboratory somewhere like a new car model or a pet rock.
So was low carb shaping up to be a trend or a fad? In 2000, 2001, and 2002, experts were describing
low carb dieting, and the low carb products market, as a trend. It was supported by
solid scientific evidence, people were losing weight, health indicators like blood sugar,
cholesterol and triglycerides were improving, and the word was spreading! And in response,
food companies began jumping on the bandwagon faster than fleas on a dog.
In 2003, despite the scientific underpinnings of low carb dieting, and the increasing
numbers of successful low carb dieters, the low carb marketplace began more and more
to take on the appearance of a fad, a flash in the pan. I knew it was all over when
I saw jars of mayonnaise labeled, "0 Carb". By the middle of 2004, we had seen one
of the fastest boom/bust cycles in history; and casualties lay everywhere.
So in the end, was low carb a trend or a fad? Well, I like to say that it was a fad layered on
top of a trend. The science and success of low carb dieting is undeniable. But the
science and success of low carb products is much more dubious. A number of factors
led to the low carb market disaster of 2004.
The science of low carb was never fully and sufficiently explained to the
general public. Low carb dieting appears to be so counterintuitive. Low fat dieting is easy
by comparison, which explains its long running success in popularity if not in
improving health. Conventional wisdom is you are what you eat. "If you eat less
fat, you'll be less fat." Low carb is much tougher to understand and accept. How
can you lose fat by decreasing carb consumption and increasing fat consumption? It
just doesn't make any sense. Low carb dieting requires extensive education beyond
the physician-authored bestsellers.
And when I say politics, I mean money. Powerful agricultural and
food manufacturing interests are opposed to low carb dieting because it hits them
squarely in the pocketbook. Witness the decline in baked goods and pasta sales and
the corresponding bankruptcies. The U.S. Department of Agriculture, authors of the
infamous food pyramid, is largely a mouthpiece for this segment of the economy.
Therefore, you won't soon be seeing any education about low carb coming from Washington,
Bogus low carb products began cropping up rather quickly, and soon reached a
crescendo in early 2004. One outfit produced a brownie with 33 grams of maltitol per
serving, just because they could subtract all the maltitol from the total carb number
to get negligible net carbs. All sorts of justifications were invented to avoid
counting carbs in the product to achieve a low carb number. And all sorts of new
processed ingredients were invented to be used to replace sugar and flour, but without
knowing how these ingredients were being digested and metabolized by the consumer.
These included glycerine, sugar alcohols, polydextrose, inulin, various new fibers,
various new protein concentrates, isolates, and resistent starches.
When people ate the products made with
these ingredients, they failed to lose weight, their health failed to improve, and they
reached the conclusion that low carb dieting doesn't work. A conclusion they were meant to
reach? In reality, eating these quasi-foods meant that they weren't really following
the true tennents of a low carb diet.
Because of the lack of education, and the plethora of bogus low carb products,
people were doomed to fail. Many people approached low carb dieting and low carb
products like an antidote. That is, they thought if they ate low carb labeled foods,
they could still eat whatever else they wanted, because the low carb foods would cause
them to lose weight. Somehow they missed the message to stop eating all the carbs and
calories that packed on the excess weight and ruined their health.
Food manufacturers largely caused their own demise. By rushing bogus foods and food
ingredients to market to take the place of the real thing, they disappointed consumers
in taste, texture, and results, sealing their fate. In fact, I don't know if it's not
healthier just to eat a real donut rather than a "low carb" knockoff.
At the present time, there is residual low carb awareness in the market. The general
impression is that it is good to reduce your carb intake, as well as fat and calories
overall. However, the caloric restriction (starvation) diet is notoriously unsuccessful.
And when you do it by eating carrot sticks and rice cakes instead of meat and other forms
of protein... well, God rest your soul.
It is really not that hard to eat low carb. Cut out pasta, bread, rice, potatoes and sugar,
and eat meats, cheese, eggs and vegetables. There is no need for low carb pancake mix,
especially at $5.99 a box! A significant portion of the population has figured it out:
pasta, potato, and baked goods sales remain depressed. I think that what has happened
so far is that carb consumption is reduced, even if the general public has not whole-heartedly
adopted the low carb religion.
So what is the future of low carb? Well, look at the past. True low carb will be
restricted to an educated minority. If you can't understand the benefits, you won't
be motivated to eat a true low carb diet. The success of the diet itself will be its
salvation and perpetuation. As more and more people fail to lose weight and improve
their health on low fat and strictly low calorie diets, they will turn to low carb. As
more and more people have success with low carb dieting, they will help to spread the word.
At the same time, there will always be a majority of people who subsist largely on carbs
instead of protein and healthy fats. One reason for this is that most people just can't
or won't grasp how low carb dieting works. The other reason is that carbs are just plain
cheaper than protein and healthy fat. Some people feel they can't afford to eat a healthy low carb
diet, especially when ipods and sneakers are competing with food for disposable income.
The future of low carb products, like the past, is much more dubious than the diet itself.
And by low carb products, I don't mean mayonnaise and ground beef. Low carb substitutes for
high carb foods can never be more than just an occasional treat in a successful low carb diet.
When consumers treat low carb potatoes as a staple in their diet (just like real potatoes
used to be) they are risking the success of the diet. It is so much easier just to skip
the potatoes, especially when the low carb version costs ten times as much as the real thing
and doesn't taste nearly as good. People are eating less pasta overall. Most haven't
switched to high cost, "low carb" pasta; they are just eating other foods.
There will always be a market for sugar free soft drinks and jams and candies. But I don't
see a repeat of the low carb product boom of 2002-2004. Most consumers are no longer
interested, and true low carbers know better than to eat a brownie containing 33 grams
of maltitol. The solution for cottage low carb food manufacturers is to identify a
product niche that is not being served by the mass market, and to take advantage of
alternative distribution channels such as internet, mail order, and independent health
food stores. In this way, a successful business can be established and decent living can be made.
If your goal is to strike it rich, well, let's just say Las Vegas may be a better option for you.
Title photo Copyright © 2005 Neil Beaty and Low Carb Luxury