Maker of Atkins diets files for bankruptcy

[WeeButtons]

Maker of Atkins diets files for bankruptcy

Slumping popularity of low-carb diet, plus increased competition, leads company founded by late diet doctor to seek Chapter 11 protection.

The Atkins diet has fallen on lean times.

The company started by the late nutrition guru Dr. Robert C. Atkins to promote a low-carb lifestyle has filed for bankruptcy court protection, a further sign of the waning popularity of the diet.

A hearing on the prearranged, Chapter 11 filing by Atkins Nutritionals Inc. was scheduled for Monday in U.S. Bankruptcy Court, spokesman Richard Rothstein said Sunday.

The company, which sells Atkins-brand nutrition bars, shakes and candy as well as offering low-carb diet information, has been hurt by waning popularity of its namesake approach, which focuses on eliminating carbohydrates such as bread and pasta to shed weight.

One of the most popular diets ever
The diet became one of the most popular in U.S. history, spawning a virtual cottage industry of low-carb regimens, and was so popular from 2002 through early 2004 that it was blamed for the bankruptcies of several pasta and bakery companies.

But it also drew criticism from experts for its focus on fatty foods and low fruit and vegetable consumption. The death of company founder Robert Atkins after a fall in April 2003 led to a spate of negative publicity when the public learned that he had been overweight.

In its heyday, the company listed Goldman Sachs among its backers and analysts predicted an initial public offering, according to Reuters. Its trademark red "A" logo appeared on a range of packaged foods and was featured in advertising for Subway sandwich stores.

But Atkins Nutritionals said demand slumped beginning in the second half of 2004 and rival products flooded the marketplace, Reuters said, prompting the company to restructure and replace its management team.

Low-carb diet loses popularity
A recent survey by the NPD Group, an independent marketing information company, found that the number of American adults on any low-carb diet peaked at 9.1% last February and dropped to 3.6% by mid-November.

In a further sign of the slump, the nation's largest fresh egg producer, Cal-Maine Foods Inc., said Monday that waning demand for high-protein, low-carb diets has resulted in a glut of egg inventory.