Natural Foods Merchandiser

Low-Carb Mania Helps Stores Expand While Customers Reduce

Stores that carry only low-carbohydrate foods are springing up around the country faster than an Atkins diet devotee can slather mayonnaise on a chipotle-lime pork rind.

The more than 50 low-carb food manufacturers in the United States believe that, far from being a faddish way to shed a few pounds, recent favorable studies have turned the high-protein, low-carbohydrate diet popularized by Dr. Robert Atkins into a lifestyle choice. And while naturals retailers may gag at the thought of stocking cinnamon-butter pork rinds and sugar-free margarita mix, it's a necessary evil, say distributors. To compete with the 200 or so low-carb food stores around the country, naturals stores must beef up their low-carb sections to accommodate shoppers who vow never to let another fettuccine noodle or chocolate chip cookie pass their lips.

That's what Mother Earth Natural Foods in Cape Coral, Fla., did early this year, and now the average shopper spends at least $20 or $30 a trip on low-carb foods, with the average ring in the $80 to $100 range, said Sara Frank, store manager. "Basically, if it's not low-carb, it doesn't sell these days," Frank said.

According to a March report in Kiplinger's Personal Finance, prices for low-carb foods are about 50 percent higher than their high-carb counterparts, because ingredients are more expensive.

Mother Earth has four 4-foot sections, along with a candy rack and freezer case, devoted to low-carb foods. The store-within-a-store is set off with Atkins' "Controlled Carb Center" signs. Top sellers include low-carb candy and bread, protein bars and "almost anything Atkins," Frank said.

Despite the large number of low-carb-only stores in other parts of Florida, Mother Earth doesn't have much competition, Frank said. But naturals retailers in other areas of the country aren't so lucky. The area comprising Portland, Ore., and Vancouver, Wash., has 18 low-carb stores. Low-carb retailers are popular in Arizona and California. There are even low-carb stores in the Midwest grain states. Vitamin and frozen-yogurt shops around the country are converting to low-carb stores, and existing stores are licensing or franchising.

"Every year the number of stores keeps doubling, but the last two to three years has been the biggest growth," said Alan Beyda, chief executive of J.A.M.B. Low Carb Distributors in Pompano Beach, Fla. He estimates he distributes to 1,600 retailers worldwide.

"It's a niche business," says Beyda. "It's never going to take over the mainstream grocery business, which makes it perfect for the independent retailer."

Beyda, who also owns D'Lite of West Boca, a 1,500-square-foot low-carb store in Florida, said his store does $2 million in revenue a year and carries 1,000 SKUs. The 1,100-square-foot Low Carb Habit in Vancouver, Wash., serves 300 customers a day and carries 1,600 SKUs, said owner Linda Langdon, who opened the store after she lost 100 pounds on the Atkins diet. She plans to double the store's size in September and add a full-service deli. She's also opening a second location in Seattle in September and has licensed two stores in Oregon.

Langdon estimates 90 percent of her customers are on the Atkins diet. "Natural food people don't always approve of this diet, but [retailers] are crazy if they don't carry Atkins products," she said. With an Atkins book on diabetes management scheduled for release in January, "I think we're in for quite a long time" of low-carb mania, Langdon said.

Naturals stores might carry only 200 to 250 low-carb SKUs, said Andrew DiMino, president of Low Carb Lifestyle Distributors in Sparks, Nev., so owners and managers need to consider carefully how to stock their low-carb sections.

"They need to put in at least some products in certain categories—the more popular items for the casual low-carber," he said. These categories include hot cereals, bake mixes, bread mixes, protein bars and powders, sugar-free chocolates and candies, and sugar-free beverages such as bottled water and carbohydrate-free flavored syrups. In addition, "low-carbers love crunchy snacks like pork rinds," he said.

Vicky Uhland is a freelance writer based in Denver.

Natural Foods Merchandiser volume XXIV/number 9/p. 11, 16

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