New health food stores: Granola is out, pork is in

Atkins diet inspires Bay Area no-carb outlets

Demian Bulwa, Chronicle Staff Writer

7/27/2003

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A new kind of health food store is sprouting up all over the Bay Area, and the hottest products on the shelves are the cinnamon-butter pork rinds.

As proof that the Atkins diet craze is spreading like zero-carb syrup on a whey protein pancake, special shrines are being created for the exploding number of devoted carbohydrate-dodgers -- culinary safe havens where the snack chips are soy and the soda is sugar-free Diet Rite. Some vegetables are forbidden fruit.

It's the latest trend within the latest trend: opportunistic retail stores that carry only products favored by the tens of millions of Americans who have tried to shed weight with high-protein plans pioneered by the late Dr. Robert Atkins.

Stores have opened in San Ramon, Lafayette, Fremont and San Leandro, and a fifth is on the way in San Jose. A San Ramon-based company called Castus Low Carb Superstores is opening franchises in San Mateo and Pittsburg, and is working with potential franchisees in more than a half-dozen other cities, including San Francisco, according to its owners.

Although the exact number of low-carb-only outlets is unknown, a large distributor estimated there are 15 stores now open in California and close to 200 nationally. Andrew DiMino, who owns Low Carb Lifestyle Distributors in Sparks, Nev., expects the numbers to double within a year, with many health food stores converting into low-carb outlets to improve business.

"Every time I come in here, someone gives me a new tip," said Mark Malloy, 35, a PG&E systems operator who shops at Castus in San Ramon and has lost 30 pounds since abandoning carbs six months ago.

Malloy reached into his basket and displayed one of those tips, a pack of chocolate tortillas that he likes to slather with butter. He said, only half- joking, "These things saved my life."

Gail Hutton, 63, who has lost 24 pounds since shunning carbs last year, buys buns made of nut and soy flours at Healthy Lifestyles in Lafayette and unites them with a Protein Burger, an off-the-menu item at In-N-Out Burger joints. It's wrapped in lettuce instead of a bun.

"Not too bad when you're dieting," said Hutton, whose husband is also cutting carbs.


OWNERS ARE TRUE BELIEVERS
Most of the new stores are owned and operated by the truest of believers -- people who can't recall their last baguette or baked potato and who offer low- carb workshops.

Atkins devotees like to say they're in a lifestyle, not on a diet. It's been around since the 1970s, but surged this year thanks in part to health studies that ate away at its critics. Many maintain it can cause heart problems, constipation and bad breath, and can offer only short-term results to the bulk of the bulky.

The Atkins diet and similar plans flout mainstream food wisdom by preferring a plate of bacon and eggs to a bowl of pasta or rice -- an attractive proposition for people who have bought more than 15 million of Atkins' "Diet Revolution" books.

Now the revolution has spawned Michelob Ultra low-carb beer, a steady creep of carb-light products into supermarkets and health food stores, and special menu items at some restaurants. Entrepreneurs are looking to get fat.

The boom in low-carb and sugar-free manufactured products -- also popular among diabetics -- "hasn't even started yet," said Marc Halperin, a director at the Center for Culinary Development in San Francisco, which works on product ideas with large manufacturers. He called the low-carb outlets a "very, very good" concept, because the dieters aren't excluded from anything on the shelves.

"People don't like to be told what they can't eat. They like to be told what they can eat," Halperin said. "It's one-stop shopping."

The stores sell a growing variety of products from an exploding number of manufacturers. There are low-carb pizzas, dry pastas, chocolate bars, margarita mixes and nacho cheese dips for the soy chips. Some stores have soft- serve frozen yogurt.


HIGH COST OF LOW CARB
But getting less costs more: At Healthy Lifestyles, a loaf of CarbXtract wheat bread is $5.99, a package of 10 whole-wheat tortillas from La Tortilla Factory is $2.89, and shoppers pay $8.99 for a 32-ounce jar of Delizioso meat- flavored spaghetti sauce. A report in Kiplinger's Personal Finance found that low-carb food costs about 50 percent more than full-carb counterparts.

Plenty of dieters are willing to fork it over, including Malloy. He said the store makes him feel like a normal shopper, because it carries everyday items he craves like bread and cereal, and because customers share a common pursuit.

In the Bay Area, the expansion can be traced largely to entrepreneurs Paul Chalupsky and Rick Schott, a pair of longtime friends from their San Jose church.

Schott, 50, who now lives in Dublin, founded Parrot Cellular, a Livermore- based retail chain that went bankrupt in the mid-1990s. He said he exited the venture without riches but with health problems borne of long work hours and "eating lots of crappy stuff. I was 42 years old, tired and fat, stressed out and unhealthy."

Schott dropped 100 pounds on a low-fat diet, but said he felt bad and looked worse. So he tried the Atkins approach, and said his energy returned -- enough so that he did his first Ironman triathlon in 1998. A year later he convinced Chalupsky, 47, of San Jose, to partner with him in a health store and cafe in San Ramon called Greenbeanz. But it struggled.

The low-carb craze came to the rescue. In October 2000, sales increased 5 percent, Chalupsky said, when Greenbeanz dedicated an aisle to Atkins and started offering seminars. Sales jumped 45 percent when, 15 months later, the store went exclusively to the low-carb approach. (The company has since changed its name to Castus Low Carb Superstores because Greenbeanz was trademarked.)

Profits fed expansion, and Schott and Chalupsky last March opened a shop in Fremont. Meanwhile, two customers and a former employee -- 46-year-old Mike Hare, who lost more than 100 pounds on a low-carb diet -- opened Healthy Lifestyles seven months later. Hare still keeps a pair of 48-inch-waist corduroys behind the counter to build credibility with customers.

Another Castus customer opened an outlet called Carb Cutters in San Leandro six months ago. And Schott and Chalupsky plan to open a Castus outlet in San Jose by the end of the year.

Now Castus -- which means clean or pure in Latin -- is offering franchises for $25,000 plus 5 percent of gross income. Potential owners are now negotiating leases in San Mateo and Pittsburg, and two franchises have already been sold in Eugene, Ore., Schott said. He and Chalupsky envision 5,000 franchises and want to manufacture a line of products.

"The evangelical aspect of this business is huge," Schott said.

Amy Pike, a 51-year-old retiree, said she wouldn't mind a store opening in her hometown of Pleasanton. She started an Atkins diet last week, had lost 12 pounds in the first 10 days, and was excited about visiting the San Ramon specialty store.

"We're Americans," she said. "If it's easier, we'll do it. We want it, and we want it now!"

Pike was starting to inflict the program on her 14-year-old son Joe, but the curly-haired teenager rolled his eyes as his mother loaded the family SUV with low-carb groceries. "Yesterday when she wasn't home I baked a big chocolate cake," he said. "Full-on carbs."

E-mail Demian Bulwa at dbulwa~sfchronicle.com.