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Diets feed some Texas industries, hurt others
Low-Carb Losses

At the peak of the low-carbohydrate craze, about 27 million Americans were following some sort of low-carb diet, according to New York research firm the NPD Group.

By late 2004, food and diet industry experts said the trend was on the wane. About 10 million Americans are still going low-carb, according to NPD Group. According to Atkins Nutritionals, which markets the Atkins diet plan, 100 million Americans were on a low-carb diet at its peak.

The diet affected a host of Texas food industries--bolstering the bottom line for cattle ranchers, pork and poultry producers and spawning a cottage industry of specialty food companies. While there are few estimates available on the size of the low-carb market in Texas, the Nutrition Business Journal estimated the industry was worth $2.7 billion nationwide in 2004.

"It was hot six months ago, or nine months ago," Ralph Waniska, professor of food science and technology for Texas A&M University's Cereal Quality Laboratory, said in January.

There's still interest but there's less produced and less consumed, he said.

"It was incredible how quickly it took off and how hot it was and how quickly it fell," said Julee Dennis, CEO of Pflugerville-based Gram's Gourmet, which sells low-carb and sugar-free snacks.

More meat
The trend centers around a 1970s diet developed by Dr. Robert Atkins that prescribes low-carb, high-protein foods and favors meat, cheese and eggs over pastas and breads. Another popular diet introduced in 2003, the South Beach Diet, limits bread, rice, pastas and fruits and recommends fiber and lean proteins.

For the beef industry, 2004 started ominously with Bovine Spingiform Encephalopathy, or mad cow disease, found in a cow in Washington state. As a result, dozens of countries closed their borders to American cattle and beef exports in 2004. Yet Texas saw its beef industry flourish in part due to the low-carb craze, said Shane Sklar, executive director of the Independent Cattlemen's Association of Texas.

"The demand [for beef] stayed very strong even as the prices at the grocery store rose a bit, in a large part due to the diets like Atkins," Sklar said.

Nationally, domestic beef sales sizzled in 2004 and are projected to be the largest on record at $70 billion, up $8 billion from 2003.

High consumer demand and lower production contributed to steeper prices. In 2004, the price for a live steer averaged 84.5 cents per pound, up from 83.3 cents in 2003 and 67.5 cents in 2002, said David Anderson, associate professor and extension economist for Livestock and Food Product Marketing for Texas Cooperative Extension.

Texas pork producers benefited from the low-carb trend as well, said Ken Horton, executive vice president of the Texas Pork Producers Association.

"I'm sure the interest in lower carbs has given us some help," Horton said. "It's hard to determine how much."

Chicken and the egg
James Grimm, executive vice president of the Texas Poultry Federation, attributes an increase in egg and poultry consumption to low-carb diets.

Since 2001, nationwide annual egg consumption rose half an egg per capita, which means Texas' 20 million residents ate 10 million more eggs in 2004, Grimm said.

More Texans are gobbling turkey and chicken than they did four years ago, Grimm said. In 2004, Texans ate an average of 71 pounds of chicken per person, up from 69 pounds in 2000. Turkey consumption rose from 18 pounds per person in 2000 to 22 pounds per person in 2004.

"Atkins certainly had an affect on us," said Grimm. "We know more people are more health-conscious today about eating the turkey products and the skinless, boneless chicken breasts."

Beef and chicken may have benefited from the bandwagon, but the state's rice, potato and wheat industries lost out, said Anderson.

"This whole Atkins deal has been a huge [hardship] for the wheat and rice producers and the potato guys," Anderson said.

The low-carb diet trend wasn't a hardship, however, according to Mike Doguet, president and owner of Doguet Rice Milling Co. in Beaumont. He said demand for rice dropped off slightly in early 2004 for about four months.

"A lot of the stores were kind of nervous about buying a lot of rice," Doguet said. "The last six to eight months we've seen it really come back and not affect our business at all."

John McClung, president of the Texas Produce Association, said he has not tracked the affects of low-carb diets on sales of Texas fruits and vegetables. But a look at prices for Texas potatoes and corn--two starchy vegetables discouraged in the Atkins diet--shows a dip in prices from 2002 to 2003, according to the Texas Agricultural Statistics Service.

The price for potatoes dropped from 10.7 cents per pound in 2002 to 10.4 cents per pound in 2003. Corn dropped from 20.7 cents per pound in 2002 to 20.6 cents per pound in 2003. Low-carb diets also discourage high-carb orange juice. The price for Texas oranges dropped from $4.64 per box in 2002 to $4.26 per box in 2003. Factors outside dieting trends, however, also may have affected the prices for those products.

Through the roof
Hutto-based LowCarb Success saw sales for its low-carb cereals, pancake mixes and granolas soar in early 2004, said David Martinez, vice president of sales and marketing.

"Everything just went through the roof last year at this time," Martinez said. "Last year [2004] in the first quarter, we matched our 2003 sales."

Sales have dropped a little, but there is still demand, Martinez said.

"You talk to people in this industry who say low-carb is dying," he said. "Those are the ones whose products are being dropped. I think the premiere products are going to make it."

Austin resident Kalinda Howe lost 13 pounds in two weeks on the South Beach diet in January 2004. She liked the diet because it was flexible and allowed her to eat things like queso and meat, although she had to avoid pasta and carbs.

"I don't eat a ton of red meat myself, but I could eat pork, chicken and turkey," Howe said. "One of the great things about the diet is it is intended to be a lifestyle change, which it was for me. I try to avoid white breads now, and go for whole grains if at all possible."

No quick fix
Texans may be growing weary of fad diets, said registered dietitian Kathy Chauncey, associate professor of family medicine for Texas Tech Medical Center and author of the 2003 book Low-Carb Dieting for Dummies.

"I think everyone is coming to the realization that there is no quick fix," Chauncey said. "I see more people becoming receptive to the idea it's what you do on a daily basis that really counts."

The nation's dieters have a new plan to follow, under federal dietary guidelines issued in January by Health and Human Services Secretary Tommy Thompson. Thompson urged Americans to eat more whole grains, fruits and vegetables and to limit fats, salt, carbs and sugar.

If consumers are ending their low-carb love affair, should Texas beef producers be worried? Perhaps, said Anderson.

"If the growth in demand slows because of consumers not doing this diet anymore, then that is a concern for livestock prices," Anderson said. "Growth in consumer demand is really what you need to continue to expand the market."

Others don't see low-carb eating as a fad. Atkins Nutritionals projected in December 2004, that an estimated 12 percent of Americans planned to follow a low-carb diet in the first quarter of 2005, up from 8 percent in November 2004.

"I think there's a significant number of people who will remain on the South Beach and Atkins-type diets," said Texas A&M's Waniska. "[Low-carb products] are going to be there in the future, but it's just not the size of the market that some companies had hoped for."

Karen Hudgins