Why Did Atkins Die?

Just because Atkins filed for bankruptcy, doesn't mean low-carb is dead.

Put down that bagel. Just because Atkins Nutritionals Inc. filed for bankruptcy protection on July 31, it doesn't quite mean the low-carb diet philosophy is dead. David Hartley, analyst for Toronto-based First Associates Investments Inc., says that for a lot of people low-carb is very similar to just saying low fat or reduced calories. He believes the trend will be sustained because it's not really about low-carb anymore. “It's about health and wellness, which is a genuine trend,” he says.

So what happened to Atkins? According to Hartley, it didn't have a strong enough critical mass when it encountered a proliferation of competitors, as companies with strong branding power simply introduced healthier low-carb products to capture health-conscious consumers. He cites the Coca-Cola Co. as an example: it uses brand power to keep calorie-counters on board with new products like Coca-Cola C2. The lower-carb Cadbury Thins bar is another example. Atkins was just an approval stamp. In the end, Hartley says, “companies with better brand power won the day.”