Gluten-free remains one of the most dynamic health and wellness categories
Article | 01 Feb 2011
Gluten-free food has delivered an outstanding performance for quite a number of years. Even in recession-hit 2009, the category achieved double-digit global value sales growth of 11% (calculated based on a 2009 fixed US$ exchange rate), compared to a much more sedate 3% for overall health and wellness products. Over the 2004-2009 review period gluten-free food registered a CAGR of 15%, a stronger performance than the 10% achieved by the food intolerance category as a whole.
In 2009, gluten-free food registered global value sales of US$2.3 billion, accounting for 27% of food intolerance sales. Half of these sales were generated by bakery products, traditionally the most relevant category. Baby food and pasta are also sizeable categories, accounting for around 10% of total sales each. Other gluten-free foods – anything from sauces and condiments to desserts – are also proliferating, with combined global value sales of US$642 million in 2009, and a very dynamic growth rate of 15%.
Allergy to gluten - a common problem
There are several factors fuelling the rampant growth of gluten-free food. For one, coeliac disease, a genetic disorder requiring sufferers to follow a life-long gluten-free diet, is much more common than was once thought. Coeliac disease only started receiving attention in the 1960s when the focus was mainly on infants who were failing to thrive. Back then, the condition was estimated to affect one in every 1,000 live births and believed to afflict predominantly babies of Caucasian ethnicity. Adults with mild and “non-classical” symptoms remained largely undiagnosed.
Finally, in the late 1990s, reliable blood tests became more widely available and the medical world was hit by the profound realisation that coeliac disease was by no means a rare condition – incidence figures had suddenly leapt to one out of every 100-300 individuals in the general population worldwide. Equally significant was the conclusion that coeliac disease was a global problem affecting people of all ethnicities, rather than just those of European origin.
But improved diagnostic methods are only part of the story behind the gluten-free food boom. Increasing media coverage of the sheer array of insidious symptoms suffered by gluten-intolerant individuals, such as fatigue, weight gain, skin rashes and lack of concentration, has turned gluten almost into an “enemy of wellness”. Nowadays, a significant proportion of gluten-free shoppers are not diagnosed coeliacs but individuals who have diagnosed themselves as being sensitive to gluten, and are cutting it out of their diets with the aim of improving their wellbeing.
Retailers the world over have not only responded to this trend but have actively aided its growth by stocking an increasing number of gluten-free brands and introducing gluten-free private label lines. In some countries, the private label share is substantial. For instance, Euromonitor International's research shows that in Austria private label accounted for 31% of gluten-free product value sales in 2009, up from 24% in 2004. In Switzerland, it accounted for a 62% share in 2009, in the UK 31% and in Ireland 16%. Globally private label accounts for around a 3% share of total gluten-free product value sales. Retailers have therefore proven to be an instrumental force in moving gluten-free from a medicalised niche category into the realm of mainstream health and wellness foods.
Mainstream players tackle gluten-free
The US is the largest market for gluten-free products, generating around half of total global value sales in 2009, followed by Germany, Italy and the UK. In addition to its formidable size, the US's gluten-free category also exceeded those of all other markets in terms of dynamism, with impressive value growth of 17% in 2009. Glutino USA, a specialist gluten-free product manufacturer headquartered in Canada, claimed the biggest share of 18% that year. However, the company's share had slipped from 20% in 2007. This trend is not only the result of retailers' efforts to push their private label lines, but is also down to mainstream food companies coming up with gluten-free brand extensions.
For instance, in 2008, General Mills, the US's second-ranking breakfast cereal maker, reformulated its Rice Chex cereal to be gluten-free, followed by other gluten-free offerings. In January 2010, Post Foods LLC (GBO Ralcorp Holdings Inc) re-launched its Post Fruity and Cocoa Pebbles brands with a new gluten-free certification and reduced-sugar content. Clearly, these companies are tapping into the growing parental inclination to minimise and/or remove any “undesirable” constituents from their children's breakfast cereals.
The same is happening the world over, across all categories. In the UK, the world's fourth biggest market for gluten-free products, top-ranking bread manufacturer Warburtons entered the gluten-free category in January 2011 with the launch of white and brown loaves, rolls as well as teacakes and crumpets. The company reported that it had invested £2.5 million (US$3.9 million) in building a dedicated bakery for its gluten-free products, with a vision for further expansion in 2011.
Separate facilities will enable Warburtons to minimise the risk of gluten contamination, which is a core problem for mainstream food manufacturers using the same facilities for all their lines. Indeed, the cost and effort involved in establishing separate supply chains and production facilities is one of the main reasons why the gluten-free category continues to be dominated by smaller specialist producers. The top-ranking manufacturer of gluten-free foods is Dr Schär, based in Italy, with a global 2009 value share of 12%, and 25% in its Western European home region. Now that mainstream players and retailers are becoming heavily involved in the fast-growing gluten-free category, specialist producers need to up the ante in order to remain competitive.
Focus on nutrition to stop growth from fizzling out
Despite the gluten-free category's flagrant dynamism, some commentators have voiced concerns that it may be unable to maintain its growth trajectory over the medium to long term, and that it may even decline. Such gloomy projections are based on the argument that the gluten-free boom is akin to a fad diet trend, like the rather short-lived low-carb craze which started in the late 1990s, peaked at almost US$3 billion in global value sales in 2004, and has been on a decline since then, languishing way below the US$1 million mark in 2009.
There may be some merit to this argument considering that a large part of gluten-shunning consumers are of the self-diagnosed persuasion, looking to alleviate troublesome symptoms which may be completely unrelated to the presence of gluten in their diets. However, consumers interested in boosting their wellbeing by means of dietary improvements are not merely focused on eliminating potentially allergenic food constituents from their meals. What they tend to want is tasty, highly nutritious products. So, while it is important to get the gluten out, manufacturers should not forget about putting nutrition in, if they want to ensure continued growth.
Health professionals often make the point that many gluten-free products provide sub-standard levels of essential nutrients. For instance, an article published by the Harvard Medical School in spring 2009 criticised manufacturers of gluten-free foods for churning out products made from highly refined starches and gluten-replacers like xanthan gum, which lack any nutritional value beyond empty calories. Gluten-containing wheat flour, even the refined type, is at least fortified with vitamins and minerals in most countries. In the UK and Australia, for example, fortification is required by law.
The industry cannot really be blamed for hoisting its primary focus onto the palatability aspect when developing a wide array of new gluten-free products. After all, consumer acceptance hinges on getting the texture and the taste right. Now that this hurdle is being overcome, it is time to home in on nutrition, and there is already some activity on this front.
For instance, a team of Serbian researchers published a paper in the industry journal Food Hydrocolloids in early 2010, which reported promising results in creating baked products using a gluten-free flour mixture composed of rice and highly nutritious buckwheat. In 2009, researchers at Alberta Agriculture and Rural Development in Canada, in conjunction with the industry body Pulse Canada, developed gluten-free chickpea crackers featuring an iron content three to six times higher than that of similar products found on retail shelves. Flours derived from other legumes, such as red lentil, pinto and navy bean, were also tested, but chickpea flour scored best in terms of palatability and processing characteristics.
Researchers from the Department of Food Engineering at the Middle East Technical University in Turkey successfully experimented with chestnut flour and found that it enhanced the level of B-vitamins, iron, folate, potassium, magnesium and dietary fibre in gluten-free products. The results were published in the Journal of Food Engineering in the summer of 2010, with the conclusion that a 30/70 chestnut/rice flour ratio with a xanthan-guar emulsifier blend yielded the best results.
Apart from replacing standard gluten-free flours with those made from “superfood” grains and legumes, functional ingredients are also being explored to enhance the nutritional merit of a gluten-free product. A particularly relevant study was carried out by the National Food Research Institute at the National Agriculture and Food Research Organisation in Japan, published in the spring of 2010 in the Journal of Agricultural and Food Chemistry. The researchers added glutathione, a tripeptide antioxidant compound which occurs naturally in the human body, to gluten-free rice bread. Not only did this improve the rising characteristics and volume of the final product, but there is also evidence that glutathione may reduce the allergenicity of foods, making it the perfect functional ingredient for foods positioned as food intolerance products.
Euromonitor International predicts that an increasing number of gluten-free product manufacturers will continue to push their offerings to evolve in line with more sophisticated consumer demands, helping the category to enjoy an above average 7% CAGR (compared to a CAGR of 3% for health and wellness as a whole) over the 2009-2014 forecast period.
For further insight, please contact Ewa Hudson, Head of Global Health and Wellness Research at Euromonitor International, on ewa.hudson@euromonitor.com.
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Products that normally contain wheat include bread, cakes, pasta, pizzas, pies, soups, sauces and breakfast cereals, as well as many processed foods. It's also found in rusk, an ingredient in many sausages and burgers. In addition to our Free From range, all Tesco branded products feature an 'Allergy Advice' section on the back of pack highlighting any major allergens e.g. gluten and wheat, they contain.
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