Atkins Bankruptcy a Boon for Pasta Makers

This week's bankruptcy filing by Atkins Nutritionals reflects the declining popularity of the low-carbohydrate diet. NPR's Wendy Kaufman reports that what's bad for Atkins is good for other companies that make products such as pizza and pasta.

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LINDA WERTHEIMER, host:

Time now for business news.

The Atkins diet and the company that carries that name has gone into free fall. This week, Atkins Nutritionals filed for bankruptcy protection. For pasta companies and others that make carbohydrate-rich foods, the decline of the Atkins diet is good news. NPR's Wendy Kaufman reports.

WENDY KAUFMAN reporting:

Last year at the height of the Atkins low-carb diet craze, one out of every 11 Americans said they were following a low-carb diet, so it was hardly surprising that pasta sales were down as much at 10 percent. New World Pasta, which makes brands such as Ronzoni and American Beauty, sought bankruptcy protection. The company says it can't blame the low-carb craze for its financial woes, though the hype surrounding the Atkins diet certainly didn't help.

But today, just 2 percent of the American public says it's on the low-carb diet, and Doug Ehrenkranz, a senior vice president at New World, says his company is on track to emerge from bankruptcy. Sales have returned to pre-Atkins levels. Ehrenkranz suggests some of the credit goes to new USDA Dietary Guidelines.

Mr. DOUG EHRENKRANZ (Senior Vice President, New World Pasta): It's all about moderation and it's all about whole grains, things like fiber, and a lot of the things that low-carb took out of the menu, the new USDA Dietary Guidelines put back in.

KAUFMAN: Pasta benefits from being low-cost and easy to make, says Harry Balzer, vice president of the market research firm, NPD. But at the same time, Balzer says, the nation's demographics aren't necessarily in pasta's favor.

Mr. HARRY BALZER (Vice President, NPD): It really is a family food, and recently we've been seeing that the growing segment of the population is actually a smaller household. That's the baby boomers whose kids are now leaving the household, and they're empty-nesters.

KAUFMAN: The challenge, he says, is to make a product that will appeal to them.

Mr. BALZER: How can I make the process of purchasing, making and cleaning up pasta easier, and how can I direct this to a smaller household?

KAUFMAN: Look for smaller packaging and more finished products, things like ready-to-cook tortellini. Balzer adds that the foods will have to be healthy but notes there are very few products that have risen to the top of their category based on health promises alone.

Wendy Kaufman, NPR News.

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