Ketogenic Diet Market Overview and Opportunities

If you missed it, check out our previous post where we covered the history, details, and benefits of the ketogenic diet. Now let’s take a look beyond the medical side of the diet, there is strong demand from the consumer side, with an estimated global market of $11–12 billion in 2022 alone and an anticipated increasing trend to come. In collaboration with students from the UC Davis Graduate School of Management and Barnstorm Foundry, this post will compare the keto diet to other popular options and look at common challenges that come with the diet, as well as share the current state of the keto market.

How low carb can you go?

Though the keto diet exploded in popularity in the 2020s, other low-carbohydrate diets have been on the scene for years. Common low-carb diets include the Paleo, Mediterranean, and Atkins diets. While you may remember the Atkins diet from its peak popularity during the early 2000s, it’s important to note that when comparing it to the keto diet, there are distinct differences in how each diet prioritizes and maintains a balanced nutrient intake. Between the keto, Atkins 20, and Atkins 40 (the numbers in the Atkins diets refer to the daily grams of carbohydrates allowed), the keto diet contains the smallest amount of carbohydrates. However, while the keto diet pushes fats to fuel ketosis, the Atkins diets contain over double the amount of protein. Here, we can imagine that the different diets would see different uses: an athlete trying to build and keep muscle mass might require the additional protein found in the Atkins diet, while someone trying to lose weight quickly might see better results with the extreme carbohydrate reduction in the keto diet. Though let’s not forget that activating ketosis in the body isn’t without drawbacks — keep reading.

Macronutrient breakdowns across typical, keto, and Atkins 20 and Atkins 40 diets.

What are the benefits?

Given the increasing interest in the keto diet, we also took a more in-depth look at the research surrounding the health benefits associated with it. Here are some of our findings:

● Weight loss: According to a US World & News survey, 84% of users of the keto diet had weight loss as their primary goal. While the keto diet appears to produce results quickly, with noticeable weight loss occurring in the first few days, there is a catch — this initial weight loss happens because your body loses water as you break down stored sugars, and it can come right back if carbohydrate consumption resumes. To keep lost weight off, your body must be able to fully switch to using ketosis for its main power supply.

● Diabetes: The keto diet has some appeal for managing diabetes since the reduction in carbohydrates will help keep blood sugar levels low. However, it is likely that the diet is more advantageous for helping the lifestyle-induced type II diabetes, rather than the genetic type I. To that end, it has been reported that individuals with type II diabetes who adopt the keto diet tend to see decreases in their blood sugar levels, as well as improvements in insulin sensitivity over time.

● Aging and muscle strength: Early studies in mice have shown that consuming the keto diet resulted in a 13.6% longer lifespan than a normal diet consisting of 65% carbohydrates. While the authors of the study believe that increased ketone levels improve muscle health, it is too early to draw any conclusions about what this might mean for people. Follow-up research revealed that the loss of calories when cutting carbohydrates on the keto diet delayed muscle loss during aging, but with one drawback: protein is necessary to build muscle mass, whereas protein makes up a relatively small proportion of the keto diet’s nutritional profile.

● Athletic performance: As mentioned earlier, protein is essential for supporting an athletic lifestyle, which the keto diet lacks compared to other popular diets. Research has shown that the keto diet slows muscle growth at the cellular level, but this has not prevented the adoption of the diet by athletes. Considering this, the keto diet may be best suited for endurance sports, where the body can acclimate to the new energy source provided by ketosis, compared to events like bodybuilding, where building muscle mass is the main goal.

● Cognitive health: Recently, people on the keto diet for weight loss have reported an improvement in cognitive function and mental clarity. However, the jury may still be out on the research supporting this effect. In one study, as little as one week of ketosis resulted in increased brain activity and improved brain health, while another found that a low-carb diet increased attentiveness but decreased memory.

Reality behind the hype

While the health benefits of the keto diet are often touted to persuade consumers to adopt it, it is important to note that the diet is not without obstacles along the way. Here, we describe several of the most common risks and challenges associated with the diet, and of course, the standard disclaimer applies: when in doubt, consult your doctor first.

One such risk is the potential for nutrient deficiency. Though drastically cutting carbohydrates is good for weight loss, the rebalancing of the keto diet to increase fats can result in inadequate consumption of other trace nutrients found in different foods, such as calcium, vitamin D, carnitine, and selenium. This problem can be further compounded if dieters rely on coaches or influencers that are unaware of individual health risks. In this case, proper education is the best solution to this problem, especially when underlying health conditions increase the risk of serious harm when on the keto diet.

Continuing the keto diet is another major challenge, as ketosis needs to be maintained in order to continue receiving the benefits from the diet. The initial onset of “keto flu”, referring to the discomfort experienced after cutting out carbohydrates, is a significant barrier for people starting out. In addition to “keto flu”, participants commonly list carbohydrate cravings, insufficient calorie intake, irregular eating schedules, and low energy as side effects, which may push people into abandoning the keto diet and returning to their old ways of eating. However, it’s worth noting that when individuals adhere to the keto diet over an extended period, there tends to be a relatively high rate of cheating — 45%+ of surveyed participants report regular cheating. This is because monitoring blood ketone levels is the only long-term method to ensure the effectiveness of the diet, but it is an additional step that is often overlooked or neglected.

Common reasons for abandoning the keto diet and the corresponding percentage of polled individuals.

Maturing markets?

Though the keto diet has quickly grown in popularity, there are signs that the market surrounding it may have peaked, making it harder for new companies and groups to throw their hats in the ring. In 2019, the market category for “Weight Loss and Control” was estimated at $78 billion, with the keto diet market making up $11–12 billion of that estimate. However, despite the finances looking promising, interest in the diet has faded over time. As expected, interest in keto peaks around New Year’s as resolutions are made for the future, but ever since 2019, the number of Google searches for the ketogenic diet has been slowly decreasing. This could either mean that people are just not as interested in pursuing the diet, or that we’ve hit a saturation point, where all the people who are interested have learned enough to no longer need a search engine to maintain their regimen.

Google search interest for “keto” over time.

So, of the informed group of individuals on the keto diet, are there any demographic trends that stand out? As it turns out, there aren’t really any: there is no one target demographic that overwhelmingly adopted the keto diet. One specific marketing angle is towards overweight women looking to get pregnant, as the previously mentioned benefits for improving insulin resistance can aid with fertility rates. This angle isn’t just limited to women either; considering the rates of obesity in American adults, the keto diet can prove to be a lifestyle change to combat metabolic disease (obesity, heart disease, diabetes, stroke, and other serious health conditions). In terms of age, it also seems that younger generations are also fairly interested, with modern services like e-commerce and premade meal kits delivering keto products and services booming in a short period of time. Lastly, the larger diet community may hold some potential keto converts, though this faces a challenge from established lifestyle plans, like Jenny Craig and Weight Watchers.

Searching shelves and services

We’ve talked at length about the health benefits and demographics of the keto diet, but what do you eat while on it? From top search results, some common keto diet foods and ingredients include bone broth, baking mixes, high-fat foods, oils, and keto snacks, among others. Additionally, some common aspects across these foods are the use of alternative sweeteners to reduce sugar, additional fats and medium chain triglycerides (MCTs) to fuel ketosis, and the combination of other health trends, such as “-free” or “clean” foods. Beyond foods for the diet, there is a growing niche for products that supplement ketones on top of a conventional diet — potentially offering benefits of the keto diet without having to completely overhaul your diet. These products have appeared as drink mixes containing ketone salts, a form of ketone bodies that naturally occur during ketosis.

On the technology side of things, there are also devices and apps that can assist with the keto diet lifestyle. To accurately measure the levels of ketones in the body, individuals can acquire home breathalyzers and blood meters. These devices enable the monitoring of ketosis, which, as emphasized earlier, is a vital component of the diet that is often overlooked. By regularly measuring ketone levels, individuals can effectively track their progress and ensure they are following the diet correctly. There are also applications that can not only help manage nutrient profiles and track carbohydrates in the diet, but also connect users to a larger community, providing support that increases morale and adherence to the diet.

Though the keto diet market shows some signs of cooling, this hasn’t discouraged aspiring entrepreneurs from developing and marketing new products and services. Startups in this space are raising funds on the order of millions of dollars, pitching ideas ranging from keto nut butter packs to liquid energy supplements, as well as new blood level tracking devices and lab kits that streamline the user process. It also appears that these startups are catching the eye of prospective buyers. In a notable case, Simply Good Foods, the holder of the Atkins brand, purchased Quest Nutrition for $1 billion and consolidated their keto bars and snacks under a larger dietary group umbrella.

Though the ketogenic diet has boomed in popularity, it faces an uphill battle relative to other, more well-established weight loss diets. However, research is increasingly supporting the ability of the keto diet to deliver multiple health benefits, such as improvements in muscle health, cognitive performance, and mitigation of type II diabetes and metabolic syndrome. In terms of a consumer market, there is also still room for growth and development in the creation of foods and services for people on the diet. Finally, the biggest hurdle in continuing the popularity of the diet is consumer education — to help people get started and understand what the ketogenic diet is and how it works, and to ensure that continuing dieters are properly monitoring their progress and understand the benefits they will receive.

Adapted from the “Ketogenic Diet Market Overview and Opportunities” Market Discovery Paper.

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Innovation Institute for Food and Health

The Innovation Institute for Food and Health (IIFH) reimagines markets for metabolic health leading to happier, healthier, longer lives for everyone.