Milling & Baking News - April 13, 2004 - 12

B U S I N E S S

NPD Group finds few consumers
fully embracing low-carb diets
Continued from Page 1
carbohydrates a day. For men the average
was 145 refined grams; for women, 109
grams, the NPD Group said. According
to the group those totals are considerably higher than the 20 to 50 grams of
carbohydrates per day some low-carbohydrate diets recommend for weight loss,
although still lower than the overall average of 210 grams of refined carbohydrates
a day consumed by all adults.
"Everybody in the food industry has
the potential to be positively or negatively
impacted by this low-carb phenomenon,"
said Anne Mixen, author of the NPD
study. "This report sheds some light on
how big of an impact the low-carb craze
is going to have on certain businesses
and products in the food industry. There
aren't any studies out there that look at
what people are really adding to and cutting from their diet and how many carbs
they are actually consuming."
According to the study, at any given
time, about 4% of the population is on
a low-carbohydrate/high-protein diet,
which translates to about 10 million
Americans.
Highlights of the study, which analyzed consumption behavior of 11,000
people from data collected during 200103, and examined what they ate on a
regular basis, included:
* "The middle-aged are the largest
group trying to eliminate their middle
by cutting carbs. The majority of people
who claim to be on a low-carb diet are
between the ages of 35-64.
* "Among those adults really reducing
carb intake, 40% tell NPD they exercise at
least three times a week. This same group
is almost 30% more likely to be obese.
* "People who are eating lower carbs
report health problems such as diabetes,

high blood pressure and high cholesterol
at above average rates.
* "Adults at the other end of the spectrum, who regularly eat a high-carb diet,
are most likely to be an optimal weight
or underweight."
"Low-carb diets are a fad, just like the
low-fat craze of the late 80s and 90s, the
question is how long will it last," said
Harry Balzer, vice-president of the NPD
Group. "In the meantime, every manufacturer will put out their version of low-carb
products and Americans will try them because that's what we do, we like to try new
things. People still want to lose weight by
eating, but getting people to change their
behavior is very difficult to do."
A day after the release of the NPD
Group's report, Marketing Technology
Solutions, Inc., a New York-based consumer information services company,
unveiled findings from its own study
illustrating that American consumers are
increasingly embracing low-carbohydrate
foods to stay trim. According to the February survey, which polled a sample of
17,000 respondents at qualityhealth.com,
70% of respondents stated that they have
incorporated more low-carbohydrate
foods and beverages in their diet during
the preceding three months.
M.T.S. said that the increase was
driven in part by new product offerings on store shelves, but the study also
showed that 31% of those who increased
low-carbohydrate consumption said that
they did not purchase low-carbohydrate
packaged products at all.
"Those who add low-carb elements to
their diet do not necessarily enjoy buying pre-made, packaged foods," said
Ram Rao, vice-president of analytics
for M.T.S. "Instead, many people prefer
adopting the principles of low-carb diets

Kellogg projects 30% quarterly
profit gain; ups annual guidance
BATTLE CREEK, MICH. - Double-digit
sales growth and foreign currency gains
drove stronger-than-expected first-quarter
results at Kellogg Co., the company announced last week.
While results for the quarter ended
March 31 will not be released until April
22, Kellogg said it expects earnings growth
of about 30% from the 40c per share on the
common stock earned in the first quarter of
2003.
"Our business momentum is strong
enough that we can raise our earnings guid12 / Milling & Baking News, April 13, 2004

ance, even as we encounter significantly
higher commodities costs and reinvest for the future," said Carlos M. Gutierrez, chairman
and chief executive officer
of Kellogg. "The reinvestment includes substantially
increased brand building, as well as cost
related to projects that offer high returns on
investment and the opportunity to enhance
profitability in the future."
For the entire year, Kellogg raised its
earnings guidance 2c per share, to $2.07 to

like South Beach but cooking the items
themselves."
The survey found that consumers not
only are concerned about obesity, but
also are interested in other nutrition-related issues such as high cholesterol. The
study found:
* "Proportionally more of these consumers use medications to lower their
cholesterol levels;
* "Those who have increased their
consumption of low-carb foods and beverages are much more positive toward
associated diet programs - 57% report
a favorable opinion of the Atkins diet
versus only 14% favorable among those
who did not alter their diets;
* "Consulting on-line diet programs
is nearly twice as important for those
who increased low-carb use (12% vs.
7%), and dieting was much more important to those increasing their low-carb
consumption (48% vs. 15%);
* "Those who have ramped up their
low-carb consumption, and are also dieting, are more likely middle-aged female
consumers."
"Marketers need to ask themselves
if their key consumers are riding the
bandwagon before jumping on," Mr.
Rao said. "For most brands, the goal will
be to deliver a product assortment that
efficiently meets the needs of each consumer niche within a brand's franchise.
"One concern is that low-carb products are also purchased by those who
described themselves as fit and at the
proper weight. Advertising themes
geared at 'lose the weight' might alienate those who could relate to a message
of 'stay fit.' Strategic use of the branding
message, media selection and celebrity
endorsements is critical to success."
M.T.S. expects to publish results of a
second low-carbohydrate survey in May.
That study was fielded in March and
focuses on consumer interest in specific
low-carbohydrate foods and diets. MBN

$2.11. At the new guidance levels, Kellogg's
earnings growth would be "modestly
above" the company's long-term target of
8% to 10%. The company earned $1.93 per
share in 2003 and $1.77 in 2002.
"Underscoring the quality of these expected
earnings,
Kellogg
announced that this range
also includes a higher estimate for up-front costs and
write-offs related to capacity
rationalizations and cost-reduction
initiatives," the company said. Writes-offs
in 2004 are now forecast at 10c to 12c per
share, up from the previous forecast of 5c.
Kellogg shares rose 31c, or 0.8%, in trading April 5, closing at $39.50. MBN
bakingbusiness.com / world-grain.com
http://www.qualityhealth.com http://www.bakingbusiness.com http://www.world-grain.com
Milling & Baking News - April 13, 2004

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