Simply Good Foods Repositions Atkins for Lapsed GLP-1 Users After 20.9% Sales Drop and $331M Impairment

Simply Good Foods is repositioning Atkins, one of the best-known low-carb brands in US grocery, around a new target: consumers who have stopped taking GLP-1 weight-loss medications and want to keep the weight off. The shift, set out on the company’s fiscal fourth-quarter call on 27 October, is one of the clearest attempts yet by a packaged food maker to build a brand strategy around life after GLP-1s rather than around active users.

It comes from a position of weakness. Atkins net sales fell 20.9% in fiscal 2026, the year ended 29 August, and the brand’s retail takeaway fell 22.6% in the fourth quarter.

The numbers behind the reset

Simply Good Foods reported fiscal 2026 net sales of $1,356.5 million, down 6.5% year on year. Atkins and OWYN declined 20.9% and 9.7% respectively, partly offset by 0.7% growth at Quest. Fourth-quarter net sales fell 9.7% to $333.3 million, with Atkins down 14.9%.

The company recorded a non-cash impairment of $331.0 million covering goodwill and the Atkins and OWYN brand intangible assets. It cited recent performance, updated revenue projections and a lower share price. Simply Good posted a full-year net loss of $155.9 million, against net income of $103.6 million a year earlier. For fiscal 2027, it expects net sales to fall by 13% to 17%.

On the call, CEO Joseph Scalzo, who returned to the company in January, said Atkins household penetration was 8.3%, down about 210 basis points year on year. He blamed falling penetration and the resulting distribution losses. Buy rate among existing Atkins shoppers has stayed relatively stable, he said, which suggests the brand’s problem is recruiting new consumers rather than losing relevance.

Targeting lapsed GLP-1 users

Scalzo said the arrival of GLP-1 drugs has “reignited interest in weight loss” but has changed the brand’s role. “These GLP-1 users are using the medications to lose weight,” he told analysts. “That said, there are a lot of people cycling off these medications as they achieve their weight loss, and they have a lot of anxiety about maintaining that weight loss. That’s where Atkins is going to live.”

The company cited research estimating that about 23 million US adults are lapsed GLP-1 users or cycle on and off treatment. Food Dive pointed to Morgan Stanley estimates that as many as 55 million Americans could be on the drugs by 2035, and to research showing that much of the lost weight often returns after people stop treatment.

The repositioning includes:

• A new campaign, “Atkins is Metabolism Changing Nutrition”, launched in September with Rob Lowe as spokesperson and pitched directly at people worried about keeping weight off.
• Revamped communications, including a redesigned website with more science-based content and more spending on streaming, digital, social and influencer channels.
• Product innovation aimed at long-term weight management, such as Atkins’ new whipped bars, built around what the company calls the right balance of carbs, protein and fibre.

Why it matters for food makers

Most food industry responses to GLP-1 drugs so far have focused on active users: smaller portions, protein-dense and fibre-rich products, and “GLP-1 friendly” labelling. Earlier research from BCG found that users redirect rather than simply cut their food spending. Atkins is betting on a different segment. People coming off the drugs may be a larger and more lasting market for nutrition-led weight maintenance, especially since, as Food Dive notes, many people stop taking the medications within a year.

The strategy also tests whether a legacy diet brand can win back relevance through positioning and marketing alone. Simply Good’s own guidance for a double-digit sales decline in fiscal 2027 suggests management expects the turnaround to take time. Scalzo said rebuilding household penetration “will take time.”

For high-protein snack and meal-replacement makers, the metrics to watch are Atkins household penetration and distribution trends over the next two to three quarters. If the lapsed-user message works, expect more brands to label and formulate products specifically for weight maintenance after GLP-1 treatment.