Opportunity in this industry is all about giving low-carbers more choices, and that's exactly what Pure Foods LLC is doing with the first-ever low-carb restaurant in the United States, in addition to its retail stores, food product line and catering divisions. The company projects $10 million in combined sales for 2004.
While vacationing in Europe in September 2003, friends Stephen Bikoff, 35, and Brad Saltzman, 36, talked about going on a low-carb diet when they returned to the States to lose some of the weight the rich European food had added. When Bikoff, who had already tried low-carb dieting, lamented about how long it took to receive low-carb products ordered online and the lack of variety and availability elsewhere, they decided to start their own low-carb retail store. Saltzman shared the idea with Romina Kiryakous, 40, and Linda Mihka, 37--he was already running a valet parking business with the two--and they wanted in.
In December 2003, Pure Foods Low Carb Market launched, with three stores open and another seven in the works for this year. While planning the retail store, the partners realized that there was still a lack of variety and good-tasting low-carb food on the market; so they created a line of food products (including frozen meals) that's carried not only in their own stores, but also in other specialty and grocery stores. Pure Foods, which is based in Beverly Hills, California, and does catering in the local Los Angeles area, has discussed wholesaling some of its cheesecakes to a restaurant chain and has been approached by several others. Pure Foods Low Carb Cafe is now open in Beverly Hills, offering low-carb treats like BBQ chicken pizza and an ice cream and hot fudge-topped brownie. They hope to open eight or nine more locations before the end of the year and plan to franchise their cafe and low-carb market concepts.
To succeed as well as these entrepreneurs have, Rotbart says the way to go is to veer off from the Fortune 500 radar. "To create a product that competes head-to-head with [big companies] is folly for the entrepreneur," he advises.
Valen concurs and offers an "if you can't beat 'em, join 'em" alternative: "If entrepreneurs are willing to invest in the capital, plants, R&D and manufacturing, they could help a larger brand," revealing that many of the Fortune 500 companies are simply scared or hesitant to enter the market themselves.
If you want to go it alone, Valen says another area ripe with opportunity is the many ancillary services surrounding the industry, like business development, financing, and consulting firms such as his that have benefited from low-carb businesses. And Rotbart says the ethnic low-carb food niche-like Asian, Spanish, or even kosher or organic low-carb fare-is still an open area. Finally, he says, ultra low-carb (0 to 2 grams of carbs) and gourmet items will give entrepreneurs who can outpace slower-moving corporations an edge.
Just ask Jay Robb, who's quite possibly paving the way for other entrepreneurs to benefit from a potential low-carb backlash and burnout. The certified clinical nutritionist, fitness trainer and founder of Jay Robb Enterprises Inc. in Carlsbad, California, contends that the secret to real weight loss lies not in low-carb eating, but in a combination of low- and higher-carb intake. His book, The Fat Burning Diet: Accessing Unlimited Energy for a Lifetime (Loving Health Publications), details his program, which relies on glycogen management rather than net carbs. He predicts low-carb dieters will soon look to diets like his when they give up on the restrictive lifestyle.
Robb may represent the evolution of low-carb businesses. Offering workshops, information and supplements that promise dieters weight loss without the constant limitations, Robb projects 2004 sales of $4 million.