US health food giant Boulder Brands is the latest supplier to want in, launching 50 gluten-free products into the UK under its Udi brands this summer, following Heinz launch of a gluten-free pasta range in February. And Warburtons is stealing the spotlight in the ‘normal’ bread aisle with an increasing array of free-from formats in its rebranded Newburn Bakehouse range.
With newcomers large and small setting their sights on previously untapped categories from desserts to baby formula, and celebrities including Gwyneth Paltrow publicly advocating a gluten-free diet, how much potential for further growth does the market hold, how can it be sustained, and what are the established players doing to compete?
In 2001 it seemed the £240m free-from market couldn’t get any bigger: with value sales up 15.5% following similar gains the previous two years, sceptics claimed the category was “faddish” and “didn’t have legs”. They were wrong:value sales accelerated further, up 24.8% to be values at £297.5m. “Key retailers are now placing free-from in front of store and within key impulse locations”, says Marina Love, Marketing Manager at Natural Balance Foods, whose brands include Nakd and Trek bars and snacks. “This has given products within the category greater visibility and made them more accessible”
And it is the average consumer the brands are targeting. “As well as becoming increasingly competitive with the introduction of big mainstream brands, the level of new consumers is on the increase,” says Alex Murphy, Marketing Manager at Free-From bakery brand BFree. “Promotional activity has been more apparent than ever this year, encouraging frequency of purchase, and there has been incredible media attention for the category.”
There has also been a reduction in the number of gluten-free prescriptions written by local health authorities, transferring sales directly to the retail sector. “As an increasing number of clinical commissioning groups continue to restrict prescriptions there has been a 4% year on year decline in the gluten-free prescription market,” says Bob Trice, MD at gluten-free food brand Dr Schar.
Dairy has overtaken bakeries as the category’s biggest sector with a 21.6% value share of the market, up 27.1% compared with bakeries 21.3% market, up 15.2%. “Non-dairy alternatives to milk are no longer considered just for those with allergies and intolerances, they are becoming a healthy choice for all,” says John Allaway, Alpro UK Commercial Director, which claims to have free-from dairy in the last 12 months thanks to the introduction of a range of nut plant-based alternatives to milk in January 2012.
The launch was supported by the brands Deskfast campaign, in which consumers were encouraged to upload pictures of their healthy Alpro breakfasts on Twitter and the brands website. “This resulted in a 200% increase in followers on Twitter and although the campaign is over we are continuing to see new fans upload pictures of their healthy Alpro breakfasts,” says Allaway.
The brand introduced a milk soya-based alternative to milk last month (June) and will add two flavoured soya plant-based big pot alternatives to yoghurt to its existing range in August.
Australian cow’s milk brand a2 milk is also eyeing the category with increasing interest after launching in the UK in 2012 and is bringing the range to the UK ‘in the near future’.
As free-from goes mainstream “the demand for great quality and delicious-tasting free-from food is rising fast. They will not settle for poor quality,” says Ann Perkins, Founder and Director of gluten and wheat-free food Perkier Foods.
Warburtons, which rebranded its free-from range to Newburn Bakehouse in January 2013, says value sales are up 91.9% year-on-year. “Product quality improvements are helping drive growth, increasing appeal to both current consumers and bringing new ‘life-stylers’ into the market,” says Chris Hook, Business Director at Newburn Bakehouse. And first mover Genius underwent a brands refresh in 2012, which included a controversial new recipe “everyday” bread aimed at all consumers.
The past year’s growth of gluten-free bread actually represents a slowdown on the previous year, but bread is “the power category for free-from”, according to Food Marketing Consultant Hamish Renton, who was behind the launch of Tesco’s own label free-from range in 2004. “Free-from bread looks increasingly like the normal bread sector – we have brands like Warburtons and Genius slugging it out for the crown. More players like Udi’s are moving in which will shake up bread, and the ensuing bun fight will create growth and bring new people to the category.”
Small players should not be discounted. Irish start-up bakery brand BFree, launched in 2012, is working with retailers to move away from medicinal-style messaging to a more ‘consumer friendly’ look and feel and has won nationwide listings in Asda and Ocado from this month for its multigrain wrap.