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 In 1973, Applebaum opened the first Rainbow Foods store in San Francisco, and the store was an instant success. Sidney Applebaum is the founder of Rainbow Foods, a natural food supermarket chain that was started in the early 1970s. He is a pioneer in the natural food industry, and his work has helped to shape the way that natural and organic foods are marketed and sold today.

He and his family expanded the privately held business and established Applebaum's Food Markets by the year 1979. In the end, it expanded to include more than 30 locations in Minnesota and one in Duluth. When the franchise was acquired by National Tea Co. in 1979, Applebaum stayed on to work there. After then, Gateway Foods purchased the chain. By adopting Sid Applebaum's suggestion to develop Rainbow Foods by transferring some of the existing Applebaum shops to the new brand, Gateway Foods CEO D. B. Reinhart and Applebaum's supermarket network expanded to be the second-largest grocery chain in the Minneapolis-Saint Paul area. On October 1st, 1983, the chain was established.

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