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WASHINGTON, Oct 11, 2004 (United Press International via COMTEX) -- It is lunchtime on a cloudless Friday afternoon, and business is bustling at a local Firehook Bakery in downtown Washington. Customers on their lunch breaks stream through the door and back out again, their bags filled with sandwiches, muffins and the bakery's signature cookies. It's a low-carb dieter's nightmare.
Fewer and fewer people, these days, are adhering to Atkins, South Beach and other low-carb, high-protein, high-fat diets. As health professionals have increasingly questioned the long-term health effects of these diets, and people on them have grown weary of sausage, steak, bacon and eggs, the low-carb craze is now cooling off.
Steve Berne, editor of Baking & Snack magazine, said the demand for low-carb products is decreasing.
"It definitely was a fad," he said. While people are always willing to try something new, he sees that "interest has waned."
That may be good news for companies like Krispy Kreme Doughnuts and Interstate Bakeries, maker of Twinkies and Wonder Bread.
Interstate filed for bankruptcy protection Sept. 22, and Krispy Kreme stock dropped to its lowest point in more than four years at the end of August after it reported poor earnings. While the companies had other management and production problems that caused most of their financial woes, both cited consumer preference for foods low in carbohydrates as a factor.
Many smaller, local bakeries have fared better than their larger counterparts for a couple of reasons.
Mary Meyers is head baker for CakeLove, a popular haven for the sugar-starved on Washington's trendy U Street. She said business is doing quite well, despite all the dieting.
"When people want to cheat, they come to Cake Love," she said.
She said customers appreciate the real butter and other natural ingredients she and her staff use. With row upon row of cupcakes and offerings such as "My Downfall," a dark chocolate cake smothered in layers of vanilla buttercream, it is easy to see why someone would be tempted to cheat.
At Firehook, the greater focus on bread means that customer awareness of carbohydrates may have actually helped business.
"Our typical customer has always been a little more aware of the health effects of whole grains," said founder and CEO Pierre Abushacra. Atkins and South Beach have served to highlight the difference between the refined wheat of white breads and the whole grains used in many of Firehook's specialty loaves.
"There is no question that the general public is more health conscious" as a result of low-carb diets, Abushacra said. "Customers are asking more specific questions and are more interested in what's in the bread."
Bread lovers have been so interested that Firehook opened it ninth location in April in Alexandria, Va., and the to-go business at CakeLove expanded last year into the sit-down service at Love Cafe across the street.
While Meyers' recipe for decadence at CakeLove survives on vice, Berne believes the future of baking lies in healthier breads with whole grains and high fiber.
"Functional foods are the wave of the future," he said. He thinks that the baking industry will get a boost from government and retailers who are emphasizing choice among carbohydrates rather than ignoring them all together.
The industry may need this boost as the low-carb demand declines. Makers of low-carb products that scrambled to meet consumer demand even a year ago now find they have extra food sitting on the shelves.
Sales of low-carb products saw an increase of 95 percent during the 13-week period ending March 13 of this year as measured by market-research firm ACNielsen. That growth slowed by half to only 42 percent for the following time period ending June 12.
The leader in carbohydrate consciousness, Atkins Nutritionals Inc., has announced in the last month that it will be laying off workers and had hired a crisis management team to shore up resources and reorganize in the face of declining profits.
The company has sold more than 45 million copies of its books and still has partnerships with T.G.I. Fridays, Subway and others, but had to write off some of its inventory as expired food in the second quarter. John Rutherford, a member of the Atkins board, said last month that sales were slowing in 2004.
The company has attributed its loss in revenue to increased competition as new companies began putting similar products on supermarket shelves. It maintains that it is the market leader in low-carb food and that its profits will increase again as competitors fall away.
Outside analysts have confirmed that supply has saturated the market, but they also point to recent reports questioning the health effects of diets low in carbohydrates but high in fat and protein.
Scientists have consistently expressed concern for the high amounts of fat and cholesterol in low-carb diets, as well as the lack of many vitamins and minerals, including dietary fiber. A recent article in The Lancet medical journal indicated that people on the Atkins diet for a year complained of headache, muscle weakness and other side effects.
Firehook's Abushacra expects customers to continue to shift towards a preference for long-term health.
"The pendulum has shifted so much to the extreme, and now it's moving more towards health" and informed decisions.
As Miller Lite moves away from low-carb slogans in their advertising and Sara Lee introduces Healthy Heart breads and whole wheat bagels, the future of carbohydrate marketing seems to have arrived.
Copyright 2004 by United Press International.
