IAWS could be hit by Atkins revolution

IT could be the biggest con trick ever, but it cannot be ignored. It has forced Unilever into bringing out low-carb products and others to sit up and consider the threat posed by it.

In one of this world’s great ironies, its founder was declared to have been obese at the time of his death 12 months ago. At issue is the Atkins Diet an eating mechanism devised by one fat American doctor to allow other indulgent fat Americans eat as much as they want.

An even bigger irony is that the basic foundations of the diet, leaving the hype aside, is that eating a lot of protein, whether meat, fish or dairy products, tends to dampen the appetite.

It is also known that cutting down on bread and other high-carb products is a great help. When trying to lose a bit of weight.

By making this diet into a total mystery and a virtue for those who over-indulge anyway, the cute doctor, with an eye to his market, hooked a winner.

He devised a diet that would allow people to continue to gorge themselves by using two basic well-known facts about nutrition, that eating a lot of protein staves off hunger and keeping the bread, biscuit and sweets etc off the menu will help those who want to control their weight. What the long-term implications of this diet may be is not the province of this column, but the impact of what the late overweight diet specialist came up with is of considerable interest.

Unilever has had to buckle to the pressure being exerted by Atkins on the food shelves of the globe. Some weeks back, Greencore announced it was examining its low-carb options.

It seems to me that all of the food sector players will be forced to examine this serious upward movement of dietary consciousness that has suddenly gripped those wanting to be slim and trim. It might just be a fad, but it looks as if Atkins has unleashed an awareness among swathes of people across the developed world that high protein low-carb is the way to live and eat.

In the Irish context, IAWS comes to mind as a group that could be hit hard by the Atkins revolution.

IAWS has been adapting and supplying the consumer end of the global food chain highly successfully.

It may not all be plain sailing, down the line, however, at which point the group could tap into the market with another judicious purchase. It has shown the way in buying Cuisine de France, Delice de France and Pierres hot snacks, a keen understanding of the need for distribution in its link-up with Hortons in Canada looks to have set it a secure growth path for many years to come.

To date, issues such as dollar weakness is not a big deal for the group still building up its US and Canadian interests.

It also helps that IAWS has been one of the best share growth stories of the past decade in the Irish market. Analysts generally tend to see a bright future for a company that transformed itself in the past 10 years from a commodity based un-sexy group to one of the markets blue chips.

In the highly unlikely event that the western world will turn its back on bread, cakes and savoury finger foods, IAWS could be in trouble.

However, the US accounts for just 10% of its business at this stage.

Even if the Atkins fad becomes a definite lasting trend, the US market is still sufficiently diverse to offer IAWS long-term growth in the coming years. That, of course, presumes that the Hortons link-up in Canada and the La Brea bread purchase in the US will create the expected synergies and that the US does not go into economic free-fall after 2004.

Analysts argue the shares are fairly valued at this stage and it is fair to say that having been an outstanding share performer over the past 10 years, the group may not have it as easy as it once did to deliver mega growth.

Last year, the shares rose 29% and while they may not do as well in 2004 their track record says they cannot be ignored.