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updated 9/14/2004 12:03:01 PM ET 2004-09-14T16:03:01

Atkins Nutritionals, the food company founded by the man behind the Atkins diet, is laying off workers and cutting costs in the face of mushrooming competition to supply low-carbohydrate foods.

The company said it had hired AlixPartners, a turnaround specialist, to improve its supply chain. It was cutting its 370 staff by an unspecified number to give it "greater operational flexibility in a demanding marketplace". The job cuts are part of plans to outsource some sales to a third-party broker.

The moves follow suggestions from several food industry giants that the growth rate in low-carbohydrate products has peaked.

Doug Conant, chief executive of Campbell Soup, Monday said sales of pasta sauces and other products hit by the Atkins craze had recently improved.

NPD Group, a market research firm that uses consumer questionnaires to track how Americans eat, says the number of people who say they are on a low-carb diet has fallen from 9 percent in January to about 7 percent now.

But Atkins Nutritionals, the food company that grew out of Dr. Robert Atkins' medical practice, denied the low-carb craze was slowing.

"The number of people following low-carb [diets] has doubled over the past year. These people are buying three times as much product, but there is 10 times the amount of product available," said Richard Rothstein, an Atkins spokesman.

Analysts say other specialist food companies that were quick to offer low-carb products have struggled as the biggest players such as Kraft Foods, Kellogg, H.J. Heinz, Unilever and PepsiCo have rushed out products to meet the demand.

Goldman Sachs Capital Partners and Parthenon Capital, a Boston-based private equity firm, took 80 percent of Atkins Nutritionals for a reported $533 million last year.

There was speculation earlier this year that Atkins was preparing for an initial public offering. Atkins says more than 30 percent of Americans are at least controlling their daily carbohydrate intake. Food companies and analysts suggest low-carb products are likely to remain an important niche even after the initial boom has passed.

© The Financial Times Ltd 2013. "FT" and "Financial Times" are trademarks of the Financial Times.

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