What new gluten-free product launches, market analysis tell us

The gluten-free definition has been standardized; now what?

Columbia marketing professor Michelle Greenwald: “It’s interesting because there are some products where gluten-free is the primary point of differentiation—the package screams it, it’s even bigger than the organic seal. For others, it’s just one more little stamp alongside no trans fat, no carbs, etc."

Aug. 5 marked the deadline for manufacturers making voluntary gluten-free label claims to ensure they meet the FDA’s definition of a gluten-free food (less than 20 parts per million of gluten). And while gluten-free product launches have risen every year during the past five years, the growth of the market appears to be leveling off. 

A marketing expert weighs in on what this could mean for the market and how those playing in it should prioritize gluten-free product claims.  

“I honestly would call the legislation a non-event in that decision to do it was announced a year ago, so the FDA wanted to give companies plenty of time to use up their inventory, ensure their processes met guidelines and make sure they had the right packaging on the shelf,” said Michelle Greenwald, professor of marketing at the Columbia Business School at Columbia University. (Read the final rule in the Federal Register.) “Companies are more interested in whether it’s a trend or not.”

The one in 133 US consumers with celiac disease (along with the 7-odd% with non-celiac gluten sensitivity or a related disorder such as wheat allergy) have already established a proven need for certified gluten-free products. And according to commercial insights data from ConAgra Mills, only about 2.5% of US households are heavy buyers of gluten-free products (see here).

But the fluctuating 20-30% of US consumers who say they’re avoiding gluten in some capacity or buying gluten-free products remains a question mark for many in the industry, and resulted in a vast range of estimations for the actual size of the gluten-free market. Market research firm Mintel pegged it at a massive $10.5 bn in 2013, including anything with a gluten-free label, while market researcher Euromonitor’s much more modest $486.5mn estimate comprises only products that have been specifically formulated to replace wheat flour such as bread and cookies—excluding naturally gluten-free foods.

Growth rates of new gluten-free product launches are dropping: Mintel

According to data compiled for FoodNavigator-USA by Mintel, the percentage of all newly launched gluten-free products in the US in 2014 was 16.6%, rising every year since 2009, when the slice of gluten-free product launches was just 4.4%.

“So it is accurate to say that we expect gluten-free products as a percent of the total to rise again in 2014, but the growth rate is falling, and in 2015 we will likely see a smaller share of new products that are gluten-free than 2014,” David Lockwood, Mintel's consulting director, told us.

In the subcategories with the largest gross numbers of new gluten-free products, the fastest-growers in 2014 over 2013 are meat products, fruit snacks, poultry products, corn-based snacks, table sauces, and potato snacks.

Out of the 200 subcategories with gluten-free products, 24 have 50% or more of their new products as gluten-free in 2014—albeit some quite small, Lockwood noted. Among them are: artificial sweeteners, cassava and other root-based snacks, cider, creamers, marshmallows, nut spreads, snack/cereal/energy bars, soy yogurt and dairy-based yogurt. Large and declining subcategories, on the other hand, are vitamins & dietary supplements, meal replacements and other drinks, pastilles/gums/jellies/chews, cooking sauces and dips, Mintel found.

Inherently gluten-free products now claiming credit

Indeed, Greenwald observed that as the market has grown, products you wouldn’t expect to have gluten in them like popcorn, plantain chips and even broccoli “are claiming credit”. Part of that is no doubt to reassure those populations with a medical need to eat gluten-free that the products were free of cross-contamination during the processing and packaging processes, but Greenwald says she can’t help but wonder whether they’re hoping to cast a wider net.

“From a marketing standpoint, in terms of letting people know who care about it, there’s not much difference between something that previously had gluten and now doesn’t. So priority becomes a measure of one, how much people care, and two, how much retailers think they care and therefore they care.”

She noted that in her own limited observations at a few grocery stores demonstrated that products take varying approaches in how they treat “gluten-free” on product labels.

“It’s interesting because there are some products where gluten-free is the primary point of differentiation—the package screams it, it’s even bigger than the organic seal. For others, it’s just one more little stamp alongside no trans fat, no carbs, etc.,” she said. “Over time, I wonder if it will become the standard alongside listing sodium and calories. Companies with high levels obviously won’t want to put it on, whereas companies with low levels may want to make a bigger deal about it.”

The future is searchability; consumers more likely to try a new brand if they need a lifestyle change

Datamonitor estimates that only about 4.5-5.5% of products that make a gluten-free claim on pack actually use the word “gluten” in the branding or product name, meaning most gluten-free products aren’t actually dedicated to the gluten-free market or customer exclusively; it’s more of a secondary claim, as innovation insights director Tom Vierhile pointed out.

Regardless of whether consumers are seeking out gluten-free products for medical or perceived health reasons, Greenwald says that one area she’s certain will improve in the coming years is filtering and searchability at the retail and brand level.

“Companies are going to try to be more searchable,” she said. “They want credit for being free of what’s bad. With data and retailer analytics becoming more sophisticated, companies can more easily feed people things relate to what they’re buying—on websites and through direct mail or Catalina or mobile coupons.

“People are most likely to try a new brand when they’re diagnosed with something—that’s  when you do research and change your eating habits. Otherwise we tend to eat same thing over and over. It’s an appropriate time for marketers to target those individuals.”

Related News

Sales of gluten-free products have taken off over the past decade

Gluten-free packaged foods benefit newly diagnosed coeliacs: Study

According to commercial insights data from ConAgra Mills, only about 2.5% of US households are heavy buyers of gluten-free products

FDA survey shows excellent compliance for gluten-free labeled foods, but what about non-labeled gluten-free?

Who is the US gluten-free consumer?

Who is the US gluten-free consumer?

NFCA's Jennifer North: "You almost have to have a PhD to navigate a gluten-free diet, which is why so many people live in fear of being contaminated. Most people get sick from it on a regular basis.”

Are you sure that’s gluten free?

“People don’t decide on their own that they have diabetes and start giving themselves insulin shots; why do they diagnose themselves when it comes to gluten?" said Cynthia Harriman, on one of the four main consumer misconceptions about gluten.

Four gluten-free myths debunked

If gluten-free bakery moves into mainstream retail space, careful considerations must be made, warn experts

Riches in niches? The retail future of gluten-free

The range of gluten-free products has proliferated in recent years, but there are still plenty of opportunities beyond the baked goods aisle, says Euromonitor

What’s the size of the US gluten-free prize? $490m, $5bn, or $10bn?

Highlights from FoodNavigator-USA’s Gluten-free Forum

FoodNavigator-USA Gluten-free Forum Highlights: ‘Fad dieters are not buying gluten-free products - they are just avoiding bread’

Suzy Badaracco: 'Some of my clients are already recognizing that they might need an exit strategy'

Culinary Tides: ‘Not only have we already hit the ceiling, the gluten-free bubble is already bursting’

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Comments (1)

Karen Grossmann - 26 Aug 2014 | 07:57

Since when is gluten the arch-enemy?

I find it sad if not disturbing that Professor Greenwald actually infers that gluten is "bad" (stating above, "Companies want credit for being free of what's bad"). What a shame that society seems to be buying the anti-gluten marketing message hook, line and sinker, without first consulting their physician and undergoing the necessary testing. It is estimated that only 1% of the population has been diagnosed with celiac disease. There are many nutrition benefits to most gluten-containing foods. It reminds me of the current hysteria being generated about GMOs. It supports that adage, "A little knowledge is a dangerous thing."

26-Aug-2014 at 19:57 GMT

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