Did you notice what happened to the price of Krispy Kreme stock yesterday? It dropped by 29 percent! Wow! The drop was the result of this press release, in which Krispy Kreme announced that it was lowering its earnings projections for the coming year by 10 percent. CEO Scott Livengood blamed the company's decline on the popularity of low-carb diets:

For several months, there has been increasing consumer interest in low-carbohydrate diets, which has adversely impacted several flour-based food categories, including bread, cereal and pasta. This trend had little discernable effect on our business last year. However, recent market data suggests consumer interest in reduced carbohydrate consumption has heightened significantly following the beginning of the year and has accelerated in the last two to three months. This phenomenon has affected us most heavily in our off-premises sales channels, in particular sales of packaged doughnuts to grocery store customers.

The company is discontinuing Montana Mills bread concept, which it acquired about a year ago. Boy, I sure hope this low-carb fad dies before all of the good bakeries go out of business.

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