Gluten-free bakery proving earner for Penford

By Jane Byrne

- Last updated on GMT

Related tags Gluten-free market Gluten-free bakery products Coeliac disease Gluten-free diet Starch

Gluten-free bakery ingredients had a strong quarter for US supplier Penford, which had a decline in overall profit for its first quarter 2011 but a rise in consolidated sales to over $72m.

Net income from continuing operations slipped to $0.34m from $1.06m on the previous year’s quarter, said the Colorado headquartered company.

Gross margin for the supplier’s food ingredients division improved from last year with operating income up 34 per cent on a year ago. Penford cited factors such as a drop in unit raw material costs of more than 10 per cent and increased throughput cutting manufacturing costs in the category.

The US manufacturer said the unit’s first quarter sales expanded 9 per cent from the prior year on volume gains and product mix improvements, with new business in dairy, pet and gluten-free bakery products contributing the greater percentage of revenue growth.

Penford’s gluten-free system – PenTechGF - which was released in February last year, aims to provide the texture, appearance and mouthfeel of wheat-based products, so that companies can provide gluten-free products as part of their mainstream portfolios, rather than as part of a specialist niche.

For bakery, the system is mainly rice starch, potato and tapioca, with the mix of starches and flours tailored for use with specific formulations.

The company said that these can produce gluten-free products with good elasticity, muffins with a more open crumb grain, volume for bread height, non-crumbly pastries, and textures that are not gummy or dry.

The gluten-free market has grown at an average annual rate of 28 per cent since 2004, according to market research organization Packaged Facts, despite estimates that less than one percent of the population suffers from celiac disease, the autoimmune disorder triggered by gluten.

Only 40,000 to 60,000 Americans have been diagnosed with celiac disease, but the federal government estimates that there could be as many as 3m who are undiagnosed.

The US is the most established gluten-free market, and currently the only one where sales exceed $1bn annually, reflecting the size of the population and wider product penetration, says Datamonitor analyst Mark Whalley.

“By contrast, the gluten-free market is comparatively small in a number of other regions, particularly Asia Pacific. In Japan, for example, per capita spend is below that of even Russia, despite consumers here showing a willingness to embrace healthy/functional products.”

This market therefore potentially represents an opportunity for development, claims the market research group, although it is currently overshadowed by other food health or safety topics such as organic, natural, allergen-free, lactose-intolerance, low fat and low cholesterol.

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