Carb Your Enthusiasm Here's the skinny on how to tap into the hot low-carb market.
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No question about it, low-carb diets have taken over thecollective consciousness and the U.S. food industry. Whetherit's Atkins or carbohydrate-restrictive diets that boast aneffective weight-loss alternative to traditional low-fat, carb-richplans, consumers eager to shed fat are flooding the marketplace insearch of low-carb products. With an estimated 1 in 4 Americans onsome low-carb diet and 17 million with diabetes, entrepreneurs havefound a new health haven.
While major fast-food and casual-dining restaurants havescrambled to jump on the low-carb bandwagon, entrepreneurs took offrunning long before big corporations even made a move. GerryMorrison, 41, and Jeff Greder, 40, started Carbolite FoodsInc., offering the first low-carb, sugar-free soft-serve icecream in 1999, when low-fat diets were still the rage. Recognizinga shift in the diet industry, they quickly expanded their Carboriteline to focus on an array of low-carb products, including shakes,bread mixes, candy bars and cookies. And they've watchedrevenues from their Evansville, Indiana, company skyrocket from$800,000 in 1999 to a projected $150 million for 2004.
Still adding new items to their 100-plus line, Carbolite willalso be looking at licensing arrangements with restaurant chains.Though competition is definitely heating up among entrepreneurs andcorporations alike in the $15 billion low-carb food market,Morrison is undeterred. "In a sense, we've launched 15different companies that now carry low-carb candy-unheard of beforewe came around," he asserts. "But we feel we led then,and will continue to lead in the industry and in the creativity oflow-carb products."
Retail low-carb startups like Castus Low Carb Superstores arealso popping up at a rate of about one per week, says Dean Rotbart,executive editor of industry newsletter LowCarbiz (www.lowcarbiz.com).While untapped opportunities for entrepreneurs exist, Rotbartnotes, "too many people are trying to jump into this industry[in] the wrong places." Receiving a dozen calls per week fromentrepreneurs looking to start low-carb product lines or stores,Rotbart deadpans, "That train already left the station."Instead, he points to areas like raw ingredients, support groupsand even lifestyle products-LowCarbiz is launching a line oflow-carb characters on gym bags, golf balls, etc.
Rotbart urges entrepreneurs to look at the low-carb phenomenonas a lifestyle rather than a diet, as he believes "we'reseeing a revolution in the American menu." With foodscientists promising tasty low-carb products, this train appears tobe unstoppable. Find out how you can benefit from the low-carbphenomenon in the May issue of Entrepreneur.
