In the last year, the baking industry has flooded the marketplace with low-carbohydrate items. Only time will tell if these items have staying power.
The low-carbohydrate craze swept through the baking industry like a flash flood. It was sudden, with little warning and caused significant damage to the industry in the eyes of consumers. The million dollar question, though, remains whether the craze will leave in a hurry similar to a flash flood or stick around and evolve into a solid, niche category.
When Flowers Foods, Thomasville, Ga., launched one of the first new products catered to low-carbohydrate dieters, the ears of an industry beleaguered with decreasing volumes and excess capacity perked up. Many in the bread industry saw low-carbohydrate breads as the answer to declining white bread volumes. Others saw the trend as a way to jolt stagnant sales.
Soon, the bread industry's low-carbohydrate fever had spread throughout the entire baking industry. Low-carbohydrate cheesecakes, muffins, Danish and cookies all began hitting store shelves. And it just wasn't the retail environment that caught low-carbohydrate fever. Various foodservice outlets, from quick service to white tablecloth, were swept up in the low-carbohydrate craze.
That is a short history on how the industry reacted to carbohydrate-counting consumers. Now, the question is whether this craze will find staying power or go the way of previous fad diets, such as low fat.
Is the bubble bursting?
It has been more than a year since Flowers Foods launched its low-carbohydrate bread, and according to the company's latest analyst conference, the product is still performing exceptionally. George Weston Bakeries mirrored its competitor's attitude regarding its Atkins-endorsed low-carbohydrate breads.
However, the Canadian company is not finding identical success with the recent launch of low-carbohydrate Entenmann's products. The company recently announced that only two of its six low-carbohydrate Entenmann's products are reasonably performing. "This has been a bit of a disappointment to this stage," Gary Prince, George Weston Bakeries' president, said of the low-carbohydrate Entenmann's products. "This launch was expensive in the first quarter, and we'll have to watch the development carefully.
Gary Prince's comments about the product introduction being "expensive" should resonate with bakeries already manufacturing low-carbohydrate products and bakers considering launching a low-carbohydrate line. Because the staying power of low-carbohydrate products is up in the air, making significant equipment, ingredient and packaging investments may be a big gamble.
According to one baker who spoke at a recent low-carbohydrate forum, if a bakery has not yet released a lowcarbohydrate product, it should stay away from the category. Although this cautious approach may prove to be wrong, it is necessary to look at what goes into a low-carbohydrate product. The three main facets of a low-carbohydrate launch include research and development, manufacturing, and marketing.
Formulating low-carbohydrate products
The most difficult aspect of launching a low-carbohydrate product is developing the ideal formula that cuts carbohydrates and tastes good. Balancing these two factors could mean the difference between a successful low-carbohydrate product and one that tastes like cardboard. "Our initial approach was to make a product that was really low in carbs, about four to five net carbohydrates, and we found that the product tasted pretty bad," John Khoury, Custom Foods' president, says. "So the approach we took after that was to take the carb content up a little bit until the taste was acceptable."
Because there is no definition of low-carbohydrate by the Food and Drug Administration, products cannot be labeled as "low-carbohydrate." Therefore, manufacturers should not feel pressured to cut as many carbs as possible. Although slashing carbohydrates may lead to the lowest-carbohydrate product on the market, it will not guarantee repeat purchases if it tastes poorly.
Another consideration for low-carbohydrate formulation is the number of ingredients, blends and mixes available for bakeries to reduce their products' carbohydrate content. By now, the suppliers of these ingredients should be versed in low-carbohydrate formulations and should be able to help bakers formulate the type of product they desire.
Manufacturing and marketing
After developing a formula and testing it in the research and developmentlab, the next step in launching a low-carbohydrate product is moving the manufacturing of the product from the lab to the plant floor. For the most part, low-carbohydrate formulas perform similar to their traditional counterparts. In mixing, however, low-carbohydrate formulas tend to have increased mix times due to their hydration and high-gluten content.
Because manufacturing low-carbohydrate formulas generally does not require a significant investment in additional processing equipment, bakers can tinker with these formulas without committing big money to a new line.
However, if a bakery decides to move forward with the line, marketing the products could lead to a significant investment. Whereas competition in the low-carbohydrate arena a year ago was non-existent, it's almost certain that every category will have at least one competitor vying for shelf space. This could lead bakers to spend major money on promotions and selling. However, this could be a risky investment if the carbohydrate craze loses its legs.
Manufacturing low-carbohydrate products is a risky, yet potentially profitable venture. Before jumping into the low-carbohydrate pool, bakers have to look at the costs associated with the release, and the short-and long-term expected profits. After figuring this out, bakers must ask themselves if it's worth all the effort.
"I think it was worth the effort because we gained a good understanding of the product," Khoury says. "I don't think sales have been as robust as we've hoped, but there is still a lot of interest and we get calls about it all the time."