Go With the Low

Permitted Pasta

Pastry chef John Muscarello found his niche with low-carb Italian food. As the owner of Jean Marie Patisserie in Garden City, New York--a business Muscarello no longer owns--he concocted a zero-carb wrap for his diabetic mother. Stuffing it with grilled vegetables or chicken salad and offering it alongside his sweets, he saw it ring up more sales than his pastries. Being Italian, Muscarello, 42, decided to try making low-carb versions of favorites such as ravioli, manicotti and stromboli using the wrap. He boasts, "People don't even realize it's not pasta."

Struggling with weight loss himself, Muscarello ate his creations for six weeks, exercised and ended up losing 33 pounds. He soon added a Philly steak wrap, chicken parmigiana and several other items and decided to go all low-carb, launching the West Babylon, New York-based Carbs a Weigh--a company providing low-carb meals, snacks, desserts and appetizers--in October 2003. Selling his frozen meals through wholesale, retail, mail order and his Web site, Muscarello has had pizza parlors order pasta items from him, and QVC featured his line in March. Sales for 2004 are projected at more than $1.5 million, and Muscarello is rolling out Carbs a Weigh parties, where guests can sample and purchase food from the host. Muscarello is thrilled, but stresses his mission: "I just wanted to give people an opportunity to really enjoy food. That's why I say, 'Losing weight has never tasted this good!'"

While the environment is a prosperous one, entrepreneurs who still want to open retail stores or enter other quickly saturating areas may want to consider becoming franchisees. "If you're set on being an independent, you're going to face a lot of competition from your neighborhood supermarket," warns Rotbart.

One such franchise is Castus Low Carb Superstores, based in the San Francisco Bay area. These low-carb retail stores already have 48 franchisees on board, and founders Paul Chalupsky and Rick Schott plan to span the United States and Canada, and are working on entering Australia and the United Kingdom. With plans to open 200 locations this year, Chalupsky, 47, and Schott, 50, realize the low-carb retail store wars have already begun. "If you don't have additional players, it's not a game. I wish them well," Schott says good-naturedly. While he welcomes the competition, Schott worries about those who are entering the industry just for the money.

Schott travels and offers low-carb workshops to help inform and educate others on the low-carb lifestyle. Both founders are serious low-carbers and require all their employees to follow a low-carb lifestyle. With projected 2004 sales at $10 million, their retail model is "We don't sell low-carb products; [we sell] our customer doing well on a low-carb lifestyle."

Like the Internet boom, the low-carb craze has created a feeding frenzy among businesses that are ready to serve the needs of the mushrooming low-carb community. "A lot of people are going to have success if they have some originality. It's easier to succeed [now because of its popularity], but the time to get it right will be truncated," says Rotbart. With everyone racing to be the biggest, best and especially the first, he predicts that many will enter the marketplace in 2004, but only a few will survive. Watch out, though--Rotbart predicts that a second wave of entrepreneurs will enter the market in the following two years, after watching and learning from the current successes.

Valen acknowledges the risks entrepreneurs must take, but he still stresses the advantage they have over the corporate powers in this arena: "Entrepreneurs can get products done and on the market in about half the time."

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This article was originally published in the May 2004 print edition of Entrepreneur with the headline: Go With the Low.

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