The sugar high appears to be wearing off at Krispy Kreme Doughnuts Inc., and the company says Dr. Atkins is to blame.
Americans who once scooped up a supply of Krispy Kremes from grocery store racks are increasingly opting for low-carb diets as they struggle to slim waistlines.
So many people have stopped eating its sugar-laden doughnuts that the Winston-Salem, N.C., company yesterday cut its profit projection for its fiscal year by 10 percent, sending its stock price into a 29 percent nose dive. Shares lost $9.29 to close at $22.51, a 52-week low.
"The popularity of low-carb diets has captured consumers' attention," said Scott Liven- good, the company's chief executive officer and chairman. "It's impossible to predict if low-carb is a passing phenomena or has gained substantial momentum."
Livengood said sales have dropped most in grocery stores and announced the company would shut down two manufacturing facilities. One of those plants is an 18,000-square-foot plant in Woodlawn that the company opened two years ago to bake its high-caloric treats for Giant Food and other grocery stores and convenience chains.
Krispy Kreme sales are split about evenly between Krispy Kreme stores, where doughnuts are made, and what it calls "off-premise" outlets.
The doughnut-maker first began to feel the effects of the low-carb craze this year, but the impact accelerated in the past few months, company officials said yesterday. In March, Krispy Kreme unveiled plans to offer a low-sugar doughnut. Yesterday, executives took it a step further and said they hoped to have a no-sugar doughnut on the market by the end of the year.
One of Krispy Kreme's Hot Original Glazed doughnuts has 200 calories. More than half those calories come from fat, which gives the fried doughnut texture and flavor.
"People who are smart about such things will understand that `no sugar' means lower carbs," said Amy Hughes, a Krispy Kreme spokeswoman.
Doughnuts aren't the only foods that Americans have shunned in favor of low-carb alternatives. The trend has put many food industries on the defensive.
The bread industry held a summit in November to fend off blame for Americans' obesity problem The orange juice industry recently developed a marketing campaign to defend its products. The British Potato Council launched an advertising campaign called "Fab Not Fat."
