Kraft shows late for Beach party

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Just as the low-carb craze fizzles, Kraft Foods is gearing up to heavily support the launch of a full lineup of 26 convenience foods based on the carb-restricting South Beach Diet.

While South Beach Diet creator Dr. Arthur Agatston claims even from the first line of his book that his approach is not low-carb, most retailers and analysts agree that South Beach is still linked in consumers' minds with the fad diet that hit its high roughly a year ago. That makes Kraft's ambitious introduction of a range of South Beach Diet products-from frozen dinners to cereal bars-look more than slightly late to the party. The push in April is pegged to the paperback rollout of "The South Beach Diet," which has been on the New York Times bestseller list and sold more than 8 million copies since Rodale launched the hardback in April 2003.

"Kraft can call it what they like, but the [South Beach] diet is still low-carb," said one Midwest retail executive. The executive's expectations for the line are not high because, "we've probably discontinued half of our low-carb and Atkins products recently."

Another Midwest retail executive, who likewise is discontinuing many low-carb products, including Kraft's CarbWell cereals, General Mills' Total Protein cereal and many items from Unilever's Carb Options lineup, said, "Kraft is just grasping at straws. I don't think people will buy something or certainly not pay more for something that says `South Beach Diet' on it."

But Howard Brandeisky, VP-South Beach Diet foods at Kraft, said, "We've seen growing consumer interest in the South Beach Diet and providing convenient options for consumers to be on that diet will be a big idea."

a modest start

Kraft's partnership with Dr. Agatston began modestly last October with the addition of a "South Beach Diet-recommended" burst on more than 200 products across 38 of its brands, including Sugar-Free Jell-O, Planters nuts and Boca Burgers. The new initiative creates a standalone brand for cereals, meal-replacement bars, refrigerated sandwich kits and frozen entrees.

The lineup will be backed by an integrated-advertising effort from Interpublic Group of Cos.' Foote, Cone & Belding Worldwide, Chicago, expected in April. Although Mr. Brandeisky declined to give details on the thrust of the campaign, he said, "The South Beach Diet is not focused on eliminating carbs, but on eating the right carbs that contain fiber, whole grains, nutrient-rich fruits and vegetables." A Kraft sales rep told an East Coast retail executive that while the carb craze has peaked, the South Beach program will outlast it.

"The lifestyle is still around and people are constantly looking for alternatives and new products," agreed another East Coast retail executive.

Atkins Nutritionals is headed in the same direction. Acknowledging that fewer people today would say they are on a low-carb diet and that the "hysteria" has clearly ended, Matt Wiant, chief marketing officer and senior VP-marketing, said Atkins will move forward with a broader nutrition message.

"We're not as focused on convincing people to do the Atkins diet as we are on getting them to buy the products because they are more nutritionally sound in terms of their higher fiber, higher protein and lower sugar levels," Mr. Wiant said. An ad for Atkins Advantage bar compares it favorably to Nestle's PowerBar in terms of sugar grams. Independent Mad Dogs & Englishmen, New York, handles.

Through the roller-coaster diet trends of the last two years, Atkins has been able to build a franchise that Information Resources Inc. puts at $345 million in food, drug and mass retailers excluding Wal-Mart for the 52 weeks ended Nov. 28.

Prudential Securities analyst John McMillin said the South Beach Diet line-seemingly "a year or two late"-is likely a defensive rather than an offensive move, intended to protect its own product lines from the likes of Atkins. But, he said, "It's not necessarily going to help Kraft grow."

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