Go With the Low

Hear everyone talking about the low-carb revolution, but think it's too late to get in the game? Don't worry--there's still plenty of opportunity to profit from America's newest obsession.
Entrepreneur magazine - May 2004
By April Y. Pennington

Fighting for headline space right along with the presidential election and celebrity woes, low-carb has become one of the most talked about topics at home, at work and with friends and acquaintances. The low-carb buzz, spearheaded by the Atkins diet and a handful of similar weight-loss plans, has boosted sales in traditional food industries such as meats, eggs and nuts. And it has turned a once-quiet specialty market into a burgeoning empire of low-carb products and services that has businesses cashing in on carb-conscious dieters.

The timing is still ripe for entrepreneurial newcomers--as The Valen Group, a strategy consulting firm for Fortune 500 companies, discovered in a recent study. According to the survey, 59 million U.S. adults are controlling their intake of carbohydrates, and more than 40 million others said they were considering a low-carb diet in the next 12 months. Collectively, those figures are fast approaching half of all U.S. adults.

While competition in the low-carb industry has indeed increased in the past year, especially with major companies jumping on the bandwagon, there are plenty of opportunities to get in and start a business catering to the picky palettes and pocketbooks of these watchful consumers. Carbolite Foods Inc., for one, is a once-small operation that has rocketed to a projected $150 million in 2004 sales, thanks to its Carborite line of low-carb candy and assorted goodies. (For more on Carbolite, see last month's "Carb Your Enthusiasm.") Clearly, low-carb dieters are gobbling up products that allow them to taste low-carb versions of what would otherwise be off-limits, and Gus Valen, CEO of The Valen Group in Cincinnati, says demand is outstripping supply.

For low-carbers, it's not just a diet, it's a full-blown lifestyle. For entrepreneurs, it's an industry rife with possibilities. For those who've already taken the plunge, it's clear there's a hunger to be satisfied. Dean Rotbart began the first industry newsletter, LowCarbiz, in July 2003 and has seen the number of subscribers soar to more than 1,400 since he started requiring paid subscriptions in September. And when Rotbart held the first low-carb industry summit in Denver in January 2004, more than 500 attendees--ranging from the likes of Frito-Lay Inc., Kraft Foods Inc. and Wal-Mart Stores Inc. to entrepreneurs--turned up to discuss issues and opportunities surrounding the growing industry. With so many restaurants and food manufacturers joining the ranks of smaller operations in offering low-carb options, Rotbart thinks the stir among Fortune 500 companies to take action won't endanger the opportunities out there for entrepreneurs, but will actually reinforce and authenticate the market. "It's good news for the entrepreneur that Fortune 500 [companies are] validating [that] it will be an industry for years to come and not just a flash in the pan," says Rotbart. "Their very movement into this creates a self-fulfilling prophecy."

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