Carb-Cutting Still Trending Strong: IRI Report
CHICAGO - Recent consumer research, media reports, and food industry watchers have been questioning the longevity of the low-carb trend, but new sales data reported in Information Resources, Inc.'s latest Times & Trends report, "Carb-Cutting Shoppers," suggest that the popularity of cutting carbs has not yet waned. To capitalize on the trend, retailers should continue evaluating their strategies for stocking, merchandising, and promoting low-carb products, according to IRI.
The marketing information group estimated that 26 million Americans are currently on a low-carb diet, while some 70 million are limiting their carbohydrate intake more informally.
Its "Carb-Cutting Shoppers" report utilizes a variety of IRI information services, including IRI's InfoScan Reviews and new CarbTracker Service, to provide detailed analysis on low-carb trends in the most recent 52 weeks and most recent 12 weeks through mid-June.
For the 52 weeks ending June 13, 2004, sales of naturally low-carb product categories were up 5.8 percent versus the year ago period, outpacing total food/beverage sales growth of 1.7 percent. Meanwhile the low-carb brands segment has grown from non-existent to $1.1 billion in under two years and a 1 percent share of total food/beverage sales. This growth has been fueled by hundreds of new product introductions.
"This research provides a unique look into the low-carb phenomenon, while showing that manufacturers and retailers continue to have a major opportunity to serve the carb-conscious consumer," said David Shanker, division president, Client Solutions, IRI. "To be successful, it's critical that CPG food and beverage companies and retailers continue working to fully understand the changing consumer dynamics. They must also continue collaborating on advertising, packaging, merchandising, and shelf presentation to provide shoppers with the information they need to make healthier choices and support new lifestyles."
IRI is now tracking sales of more than 80 low-carb brands. While the early players in low-carb -- brand families like Atkins, Keto, and CarboRite -- are still growing at 181 percent versus a year ago, major manufacturers entered the arena full-force in the past six months, taking market share from the early entrants. Specifically, the brand extensions' share of the segment rose from 44 percent to 57 percent in the past year.
Although consumers continue purchasing both naturally low-carb and the new carb-branded products, these categories are being used in different ways and for unique meal occasions, IRI has found. The naturally low-carb product growth of nearly 6 percent proved strongest in beverage, dinner, and breakfast consumption products, while nearly 80 percent of the carb-branded activity growth was in snack meals and sweetened snacks and desserts.
According to the report, portable, between-meal snacks and beverages remain the largest carb-cutting battleground for carb-cutting CPG manufacturers. While soft drinks and beer, snack bars, candy, and other sweets are predicted to sustain consumer carb-cutting or calorie-cutting interests, lower-calorie or artificially-sweetened, diet versions have the potential to take over shoppers' attention and taste satisfaction requirements.
Additional key findings from the report include:
• Retailers are still evaluating low-carb stocking, merchandising, and shopper communications strategies. Carb brands have received unusually strong display support and are often displayed in multiple locations with multiple carb brands. Additionally, "Healthier Eating" sections are being tested within categories and as separate departments.
• Food ads are flagging a surge of new entries. The jury is still out on which strategies and which best practices consumers will respond to more than others.
• Taste approval, price/value, and weight-loss results are critical. Many carb-company products are premium priced compared to brand carb-extensions, which are more competitively priced. Taste and efficacy remain core to product adoption.
The marketing information group estimated that 26 million Americans are currently on a low-carb diet, while some 70 million are limiting their carbohydrate intake more informally.
Its "Carb-Cutting Shoppers" report utilizes a variety of IRI information services, including IRI's InfoScan Reviews and new CarbTracker Service, to provide detailed analysis on low-carb trends in the most recent 52 weeks and most recent 12 weeks through mid-June.
For the 52 weeks ending June 13, 2004, sales of naturally low-carb product categories were up 5.8 percent versus the year ago period, outpacing total food/beverage sales growth of 1.7 percent. Meanwhile the low-carb brands segment has grown from non-existent to $1.1 billion in under two years and a 1 percent share of total food/beverage sales. This growth has been fueled by hundreds of new product introductions.
"This research provides a unique look into the low-carb phenomenon, while showing that manufacturers and retailers continue to have a major opportunity to serve the carb-conscious consumer," said David Shanker, division president, Client Solutions, IRI. "To be successful, it's critical that CPG food and beverage companies and retailers continue working to fully understand the changing consumer dynamics. They must also continue collaborating on advertising, packaging, merchandising, and shelf presentation to provide shoppers with the information they need to make healthier choices and support new lifestyles."
IRI is now tracking sales of more than 80 low-carb brands. While the early players in low-carb -- brand families like Atkins, Keto, and CarboRite -- are still growing at 181 percent versus a year ago, major manufacturers entered the arena full-force in the past six months, taking market share from the early entrants. Specifically, the brand extensions' share of the segment rose from 44 percent to 57 percent in the past year.
Although consumers continue purchasing both naturally low-carb and the new carb-branded products, these categories are being used in different ways and for unique meal occasions, IRI has found. The naturally low-carb product growth of nearly 6 percent proved strongest in beverage, dinner, and breakfast consumption products, while nearly 80 percent of the carb-branded activity growth was in snack meals and sweetened snacks and desserts.
According to the report, portable, between-meal snacks and beverages remain the largest carb-cutting battleground for carb-cutting CPG manufacturers. While soft drinks and beer, snack bars, candy, and other sweets are predicted to sustain consumer carb-cutting or calorie-cutting interests, lower-calorie or artificially-sweetened, diet versions have the potential to take over shoppers' attention and taste satisfaction requirements.
Additional key findings from the report include:
• Retailers are still evaluating low-carb stocking, merchandising, and shopper communications strategies. Carb brands have received unusually strong display support and are often displayed in multiple locations with multiple carb brands. Additionally, "Healthier Eating" sections are being tested within categories and as separate departments.
• Food ads are flagging a surge of new entries. The jury is still out on which strategies and which best practices consumers will respond to more than others.
• Taste approval, price/value, and weight-loss results are critical. Many carb-company products are premium priced compared to brand carb-extensions, which are more competitively priced. Taste and efficacy remain core to product adoption.