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Atkins Diet Company Files Bankruptcy

Low-Carb Diet Promoter Runs Out of Dough

August 1, 2005
It appears the low-carb diet craze may be waning. Atkins Nutritionals, the company founded by the late Dr. Robert Atkins, has filed for bankruptcy. Atkins developed the “Atkins Diet,” which counseled dieters they could lose weight just by avoiding carbohydrates.

The Atkins Diet and other low-carb regimens had a huge impact on the food industry. Some packaged food manufacturers were caught flatfooted, as consumers shunned their products that were high in sugars and other carbohydrates. Even many “low-calorie” diet food products suffered, since they were low in fats but high in carbohydrates. The Atkins Diet held that fat calories were preferable to carbs, saying the body could metabolize them more easily.

Bread makers, potato farmers, and pasta producers all suffered as millions of consumers avoided carbohydrates and loaded up on protein, as called for in the Atkins Diet. But the diet has always been controversial, with many nutritionists saying a diet high in fat is simply unhealthy.

It didn't help when the diet's founder and chief architect, Dr. Robert Atkins, died of what was widely reported to be cardiovascular disease.

Atkins Nutritionals, which produces a line of low-carb convenience foods, supplements, snacks and condiments, has apparently felt the effect of consumers’ shifting tastes. The company listed assets of over $300 million and liabilities of $325 million in papers filed with the U.S. Bankruptcy Court in New York. The company owes its lenders roughly $301 million under a 2003 loan, according to the papers filed other the weekend.

The Long Island-based company has drastically downsized and reorganized in the past year, laying off some of its 370 employees and hiring a new chief executive and chairman.

"We adjusted our organization to accommodate a smaller business and have begun to position the Atkins brand more broadly for consumers who are concerned about health and wellness," company CEO Mark Rodriguez said. Rodriguez said the company will focus more on its nutrition bars and shakes than the diet craze that made it a household name.

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