Gluten Free Food Market sizes UK: GMID

Brands Must Compete With Private Label as They Prove ‘Free From’ is No Short-Term Trend

Article | 15 Jun 2012

Gluten- and lactose-free diets continue to be sidelined as faddy and akin to the Atkins or in-fashion Dukan Diet. However, gluten- and lactose-free products stand apart from those linked to the aforementioned diets as they target coeliacs or those with lactose intolerance, both genuine and increasingly common medical conditions. As private label improves its contribution and more mainstream brands offer 'free from' alternatives, gluten- and lactose-free products could further boost the global absolute growth of US$2.3 billion predicted for gluten- and lactose-free products over 2010-2015.

Food intolerance is a trend predominantly found in developed markets. In the US, where gluten avoidance is being promoted as a lifestyle choice and part of a more holistic approach to overall wellbeing, gluten-free food is set to witness absolute growth of US$314 million over 2010-2015, accounting for 52% of overall global growth. Perhaps surprisingly, France registered the strongest annual growth in 2010 of 17%, followed by Australia, which is well known for being ahead of the field in terms of food intolerance products, and the Netherlands, both of which saw growth of 11%.

Household brands increase their 'free from' offerings

Up until now, it has been a lack of activity from recognisable brands in food intolerance that has held back growth. In 2010, the top five brands in the global gluten-free food market belonged to more niche, health and wellness-focused companies. However, this is starting to change as brands expand their product portfolios.

Top Five Global Gluten-Free Brands, 2010

US$ million (fixed exchange rate)

Euromonitor International

In terms of gluten-free products, Warburtons, the second largest bread brand globally, launched a gluten-free range in 2011, while Kellogg is starting to sell its Brown Rice Krispies in Canada in 2012 after the product was successful in the US.

In terms of lactose-free products, Arla Foods Amba, the fifth largest dairy player globally, launched the brand Lactofree in 2006. After initially offering just lactose-free milk, the brand now also offers cream, spreadable oils and fats, cheese and ice cream. To widen its audience and target the younger health-conscious consumer, the brand has teamed up with the British baking company LOLA's Cupcakes to introduce its first lactose-free cupcake and promote the launch of Lactofree spread, an alternative to dairy-based spreadable oils and fats.

Other household brands which already enjoy consumer loyalty and trust are likely to introduce 'free from' options in categories such as pasta, bakery and ice cream, and as a result the forecast constant value CAGR of 7% for the 2010-2015 period may well be a little restrained.

Private label to boost growth in Western Europe

However, brands should be wary of competition from private label products. Private label has the opportunity to offer new consumers products at lower price points, perhaps attracting those individuals dipping into the food intolerance arena for the first time. While private label has held a relatively stagnant share of 4% since 2005 in Western Europe, sales have doubled since then, when they stood at US$50 million.

Retailers are boosting their presence in the food intolerance arena. Tesco, Western Europe's third biggest retailer, aware that in the UK, for example, that up to one third of consumers now believe they are affected by a food allergy, launched a chilled free from range (including soy milks, spreads, yoghurts and desserts) in early 2012. Other retailers are also improving their product offerings. Sainsbury's, the UK's third largest grocery retailer, won the award for Best Cereal for its FreeFrom Oaty Granola at the recent Free From Food Awards in the UK, beating all branded products into first place.

'Free from' an approach to weight management?

Not only have gluten and lactose avoidance been linked to improving health but more recently they have been linked to weight loss, with celebrities such as Miley Cyrus claiming her svelte figure was down to switching to a gluten- and lactose-free diet for health reasons. No doubt, this will only fuel the trend, particularly among younger consumers, and as a result there is no reason to believe the rumours that this trend will fizzle out.

For further insight, please contact Diana Cowland, Health and Wellness Analyst at Euromonitor International, at diana.cowland@euromonitor.com

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