Are Coca-Cola's (NYSE:KO) Minute Maid and Pepsi's (NYSE:PEP) Tropicana facing dark skies because of the popular low-carbohydrate Atkins and South Beach diets? The Florida Department of Citrus (FDOC) has issued its Diet Research Findings, and they show that the outlook for orange-juice consumption isn't so sunny. Meanwhile, results of a Harvard School of Public Health study released this week are giving the low-carb approach added credibility.
Among dieters, 40% said they plan to consume less juice -- mainly to avoid sugar. Only 8% indicated that they planned to consume more. At one time, OJ was considered a healthy food choice. Now, for Atkins dieters, an orange -- not the juice -- is the only choice.
The latest FDOC sales data predicts tough times ahead. OJ sales through AC Nielsen retail outlets were down 2.4% from last season. For Tropicana, this news isn't so glum. Refrigerated juice, the category it dominates, is only down 0.5%, whereas frozen juice, where Minute Maid has greater exposure, is down 15%.
But the overall news for Minute Maid is brighter. OJ is just part of a very broad set of juice product offerings; the OJ problems are not material even to Minute Maid's results.
Pepsi's latest quarterly report indicates sluggish chilled juice sales with volume, as you might expect, slightly below year-ago levels.
The best Atkins diet impact test on Pepsi can be found at its Frito-Lay division. Potato chips and other salty snacks are strictly forbidden for Atkins dieters. What were the latest sales results? Four percent volume growth. That hardly says rough times are being caused by the diet books.
The FDOC research findings probably reflect a change in U.S. consumer tastes. Diet books are selling and the specialty products they promote are selling, but America has not given up its love affair with food.
Here is Jackie Gleason's advice to dieters: "The second day of a diet is always easier than the first. By the second day, you're off it."
W.D. Crotty owns stock in PepsiCo and prefers its products to Cola-Cola's. He can be reached at [email protected] .
