Article Published: Friday, January 23, 2004

Low-carb lowdown

Hundreds gather in Denver to learn, taste, sell

By Kelly Pate Dwyer
Denver Post Business Writer

There's huge potential for low-carb food sales in the United States.

Before the market can fully develop, though, manufacturers must figure out how to educate consumers about low-carb nutrition, food labeling and red-flag ingredients, such as sugar alcohol, which is a key ingredient in low-carb baked goods, but can act like a laxative.

"We have to decrease self-interest to encourage long-term behavioral trends," Dr. Fred Pescatore, a protégé of the late low-carb diet guru Dr. Robert Atkins, said Thursday during his keynote address to the first LowCarbiz Summit. "We can't be like low-fat. We can't be a fad."

Too many low-carb businesses send an eat-all-the-fat-you-want message without talking about nutrition and exercise - the key to long-term weight loss, Pescatore told a ballroom filled with people mostly in their 30s and 40s who covered the weight spectrum.

Pescatore, who wrote his own low-carb diet book, "Thin for Good," supports cutting carbohydrates, but suggests moderation.

There are no labeling standards for lower-carbohydrate foods yet. Most foods with the low-carb label typically have fewer than 10 grams of carbohydrates. That compares with 30 to 40 grams of carbohydrates in a typical cookie or muffin.

Four hundred entrepreneurs and Fortune 500 executives converged in Denver on Thursday to hawk their low-carb products, scope out competitors and do business with one another at the nation's first business summit on low-carb eating. About 80 reporters and editors also attended.

The two-day event at the Adam's Mark Hotel downtown opened with discussion of the low-carb market's potential.

Americans spent an estimated $1.4 billion on low-carb products in 2003, according to San Diego-based Nutrition Business Journal. That spending could double this year, not including meat, cheese and eggs, which are a staple of many low-carb diets.

Other predictions go as high as $25 billion.

Officials from Melville, N.Y.-based Hain Celestial have said Hain's all-natural Carb Fit line could reap $10 million in sales a month, and possibly $100 million in six months.

The business is big enough already that food makers and retailers must evaluate their products' ingredients such as hydrogenated oils, sugar alcohol and enriched flours, and labels including "low carb" and "net carbs," Pescatore said.

Those issues will be addressed by the Low Carb Consumers League, a fledgling group launched by Denver-based conference organizer Dean Rotbart.

Outside the room, among the various food booths, most conversations led to taste.

And most low-carb food makers will tell you their chips, tortillas, granola, brownies or pasta taste great, while every other low-carb food tastes like cardboard.

Consumers will ultimately decide.

So far they've responded well to the low-carb menu launched last October in Atlanta-based Blimpie Subs & Salads' 1,850 stores.

Blimpie chief executive Jeff Endervelt, who attended the Denver meeting, credits the new products for 6 percent to 10 percent of total sales, with most of that coming from new customers.

"We thought the conference was a great opportunity to show (our new foods) to people in the industry who count - the retailers, food manufacturers and the media, quite frankly," he said.

Blimpie, a conference sponsor, announced Thursday it plans to sell a line of Blimpie-brand low-carb products at supermarkets and convenience stores as well as at its sub shops.

The summit also drew small businesses, such as Kyla Duffy's Boulder-based Nutballz.

A professional snowboarder-turned-businesswoman, Duffy handed out four flavors of Boulders, her homemade, "carb conscious" snacks.

Duffy's idea started with her own diet restrictions. She has difficulty digesting sugar, gluten and simple carbohydrates, like white bread.

She says Whole Foods and Vitamin Cottage are interested in Boulders, so she's negotiating with manufacturers to ramp up production. Duffy has used funds from her snowboarding career to get Boulders to market, and she isn't ruling out licensing or selling the recipe.

"I want people to get this product, and I'll do it anyway I have to," Duffy said.