New retail specialty springs from renewed Atkins craze.

James Edward Sheftel can remember exactly when it all changed.

Journals began reporting evidence that the Atkins Diet, long ridiculed by the medical establishment, really did work; the New York Times Magazine picked it up: the diet's author, Dr. Robert Atkins, was welcomed back to the talk show circuit, and the low carbohydrate products Sheftel had added to his Humphrey's Yogart store in Sherman Oaks as a sideline began to fly off the shelves faster than the dessert confections.

A little more than a year later, with no letup in sight, Sheftel has opened Heavenly Low Carb, a store catering to dieters, diabetics and anyone seeking alternatives to refined sugars and fattening starches.

The modest, 2,600 square foot store across the street from Humphrey's on Van Nuys Boulevard may just be "the next thing" in retail specialties.

"Since the beginning of this year, I would say the market has expanded ten-fold from what it was a year ago," said Jeff Ciallella, president and owner of Perfect Nutrition Inc., a 10-year old distributor of nutritional products and supplements based in North Hills. "I do sports nutrition and health food products and that market is flat. The low carb section is the only thing in our industry that's booming, so the market is moving into that."

Inspired by the Atkins diet, a program based on the idea that reducing carbohydrate intake helps to burn fat and, as a result, shed pounds, low- and no-carbohydrate foods from meal replacement bars to bagels are finding their way onto the shelves of supermarkets across the country. And Americans, with an obesity rate various studies peg at anywhere from 30 percent to more than 50 percent of the population, ale eating them up.

Unilever recently blamed the popularity of Atkins diets for flagging sales in its SlimFast brand. Orange juice makers say the diets are the reason juice consumption is dropping. And Atkins Nutritionals, formed before Atkins' death in April and still the hands-down leader in the field, is reportedly set to double its revenues to $200 million this year.

Health food and nutrition stores have been slowly turning over their inventories to low carb products, but so far, stores like Heavenly Low Carb have only begun to dot the retail landscape.

"There are people who are only finding things on the Internet now, so being first gives us a heads up," said Wil Page, general manager of Heavenly Low Carb.

Sheftel and his wife Paula, who are co-presidents, first began adding a select group of low carb and no carb foods at the Humphrey's store about two-and a-half years ago after talking with a family friend whose daughter was diabetic

"It's a challenge for diabetics to find food," said Sheftel. "I started with one five foot shelf, and started experimenting to see what would sell."

Expanded Inventory

The assortment slowly expanded until it took up the entire wall of the small Humphrey's outlet.

"I'd been doing this for two-and a-half years, and it was going swell," said Sheftel, but it wasn't knocking anyone's socks off."

Then news broke that the Atkins diet may actually work.

Sales began increasing by 200 percent and more each day. Folks who used to come into the neighborhood shop for concoctions like chocolate-peanut butter-M&M frozen yogurt, were bumping against shelves piled with breads, pastas and chips made from soy and wheat gluten and calorie free barbecue sauce.

"That's one of the reasons I was in a hurry to move out," said Sheftel. "They were conflicting businesses, and some of our Yogart customers were getting annoyed. It used to be a nice, quiet yogurt store and now you come in and you're bumping into shelves, It's not a great combination, but it took on a life of its own."

It cost about $250,000 to open Heavenly, $100,00 alone for the extensive inventory that includes 75 product lines and about 680 different items.

"What drives retail is selection," Sheftel said. "If people don't see all of the different colors, they won't buy much."

In addition to staples like Atkins Advantage meal replacement bars and shakes, the store offers products that range from cereal to muffin mixes, salad dressings and desserts. Although Atkins and Keto, another market leader, are the predominant brands, Heavenly Low Carb also offers selections from numerous other manufacturers.

A nine ounce box of Atkins Quick Quisine Pancake & Waffle Mix has eight grams of carbohydrates and sells for $5.49. Sugar free syrup in a variety of flavors with no carbs and no calories sells for $4.99 for a 12-ounce bottle. There is fettucine alfredo mix with pasta made from soy flour, Cheeters frozen pizzas made with soy flour and wheat gluten, 11 flavors of Drews salad dressing and marinade and a host of cookies, cakes, breads and candies.

"The selection is probably more than I've seen anywhere in the Valley," agreed Tony D. and Hal Lazareff, who were visiting the store one recent morning after hearing about it from a clerk at the Ralphs store in Malibu.

Tony had lost 30 pounds before knee surgery kept him from his workouts, and he was readying a supply of food for his plan to take the weight back off. Lazareff, who proudly pointed out that he has not gained back the weight he shed, was stocking up on meal replacement bars.

"If they had produce, I'd buy produce here," he said.

Gym clientele

The two friends are typical of the kinds of customers Heavenly has been attracting, many of whom were shopping at Humphrey's. There is also what Page described as "a good portion of customers who are pretty heavy gym rats."

For them, the store also stocks egg whites and a variety of protein supplement drinks.

Heavenly has not done any advertising since opening, the permanent signage is not yet up, but Page said that word of mouth seems to be spreading.

A grand opening is planned for late in November along with advertising support.

Fickle diet trends have evolved from low-calorie to low fat to low carb in just a few short years, but Heavenly officials said they are not worried about whether hw-carb diets will prove to be just another in a long line of fads.

"When it all comes down to it, diabetes isn't a fad,'" Page said bluntly.

Patients with diabetes, a condition that affects the production of insulin used to metabolize sugars, require careful monitoring of their sugar intake.

And as Americans grow fatter and more sedentary, the incidence of the disease is on the rise. The number of diabetics has doubled between 1980 and 2000 to 12 million cases.

Page figures that so far diabetics may account for as much as 50 percent of Heavenly's sales, and those customers, sadly, are here to stay.

"A good portion of our sales are substitute candy and ice cream," Page said. "'These are things that people miss most when you're told to remove them by a doctor."

In part because of the burgeoning population of diabetics, stores devoted to low carb products are expected in balloon in the near future. One retailer in Northern California, Castus Low Carb Superstore, has even begun to franchise, and stores are soon to open in other parts of Northern California, along with Pittsburgh and Oregon.

Sheftel hopes to be able to expand his Heavenly store as well.

"We would like to open another unit within a year, but we can't do it on our own," said Sheftel. "We'd like to find investors who like the concept and would help us open a chain."