Top 10 Gluten Free facts of 2015
Guest blog by Bob Trice, FMCG Interim Executive and Food & Nutrition Commercial and Strategic Contributor.
- The UK retail gluten free market is currently worth up to £200m and shows no sign of slowing down. Annual growth rates of 20%+ are commonly achieved, and retailers are expanding the shelf space given over to “Free From” foods.
- What is “Free From”? Anything that contains wheat can be manufactured as gluten free using alternative grains and flours, so as well as the usual GF bread and pasta you will find breakfast cereals, sauces, biscuits, cereal bars, frozen pizzas and even beers.
- Based on the fact that a GF consumer chooses restaurants where they are guaranteed a range of GF foods, it is estimated that the untapped Foodservice opportunity for GF foods is estimated at £100m in the UK alone (estimated by Coeliac UK). What is believed to be the first UK restaurant offering an entirely gluten free menu has opened in London. This is a wonderful opportunity to show those following a gluten free diet – and their friends – how exciting gluten free foods can be.
- Who buys GF foods? People diagnosed with Coeliac Disease rely on GF foods to maintain their health, but they make up only 1% of the population, and the majority of these are not even officially diagnosed. A further 6% of the population are thought to be “gluten sensitive” and therefore also have a medical need for a GF diet. But the real growth is coming from “lifestylers” – those consumers who choose to avoid gluten or wheat through choice. In the UK, The pollster YouGov reports that 60% of adults have bought a gluten-free product and 10% of households contain someone who believes gluten is bad for them. The “Free From” market can no longer be regarded as a niche.
- Celebrities have considerably contributed to the growing popularity of a GF lifestyle. Novak Djokovic has talked frequently about his GF diet, which certainly has not held him back, and let’s not forget the lifestyle gurus such as Victoria Beckham, Gwyneth Paltrow and Miley Cyrus.
- Gross margins for GF products are good compared to commodity foods, but there are simple reasons for this:
- A dedicated production area within a factory with strict controls is required to avoid cross contamination
- Production batches are small
- Raw materials need to be tested on arrival at the factory and finished product should be positively released, to ensure that the gluten content is below the legal limit of 20 parts per million
- The recent recall of the entire product range from one GF foods producer due to cross contamination shows how vital it is to be absolutely sure that there is no gluten present.
- Companies operating within the GF market vary considerably, from specialist manufacturers that only operate within GF and which are well known to coeliac consumers, to global multinationals that are able to stretch well-known brands which are familiar to lifestyle consumers. A recent example of the latter is the launch of gluten free breakfast cereals from Nestle.
- Where will we see growth next? Will discounters take the sector more seriously now that store sizes are growing? And what about corner shops and health food stores? Holland & Barrett are perhaps best placed to take advantage of the gap in the market, given their extensive store count and knowledgeable consumer base. And surely Boots will see the opportunity for a trial range given that many coeliac consumers already go to Boots to redeem their prescriptions?
- Where will future product development go? Major retailers have heavily embraced the private label opportunity and it can be argued that this is where most innovation is currently seen. But is another cookie type what consumers really want? There is definitely a big gap in chilled ready meals, pizzas and pasta dishes – several have tried but none have succeeded yet. Watch this space!