“One of the top complaints with gluten-free bread is the size of the slice or the loaf,” Josh Skow, co-founder, president, and CEO of Canyon Bakehouse told FoodNavigator-USA. “You’re making smaller sandwiches than the average slice of bread—not that that’s good or bad, but people are used to maybe a bigger sandwich."
So the eight-year-old company decided that the market needs a gluten-free loaf of bread the same size of its conventional counterparts. Gluten-free bread doesn’t rise and behave the same way wheat breads do, but as the category has matured, Skow said a bigger gluten-free slice was possible.
“There’s more focus on it, there’s more people working on it,” Skow said of the gluten-free segment. “That certainly what happened for us—we had what I think was a novel product when we launched, and we continue to want to be at the forefront.”
Heritage Style launches nationally
Canyon Bakehouse’s Heritage Style loaves started rolling out this month, retailing for a suggested price of $7.99 for 1.5 lbs of bread. Its ingredients include tapioca flour, potato starch, brown rice flour, whole grain sorghum flour, whole grain millet, and ground flax.
Target audience in mind are people who are used to having bigger sandwiches, but then transitioned to a gluten-free diet after being diagnosed with Celiac Disease, developing gluten intolerance, or opting to ditch gluten as part of a diet.
Though founded to cater to individuals with Celiac Disease (co-founder Christi Skow, Josh’s wife, was diagnosed with it in 2007), Canyon Bakehouse has enjoyed a boom thanks to mainstream interest in gluten-free products.
Data from Euromonitor found that in calendar years 2015 to 2016 alone, the retail value for gluten-free food products in the US experienced a 10% increase from $754.9m to $836.1m. The subset gluten-free bread went up from $266.8m to $301.5m, a 13% increase.
Back when the company first launched, the Skows didn’t have the foresight that gluten-free interest will pick up as much as it did in the 2010s. “I just knew how are family had to live,” Skow said. “So Celiacs have been our core customer, and will always be.”
Family members: The new buyers of gluten-free
In the first half of Canyon Bakehouse’s lifetime, natural sector sales were the main (and only) source of revenue. To this day, the company is more saturated in the natural channel with 90% distribution.
“The big jump that we made was about in 2015, we launched nationally with Target—it was a big moment for us,” Skow said.
Then, starting in 2016, its growth in conventional started to outpace natural. “We’re probably 30% distribution in conventional, and there’s just so many store shelves to get onto,” he added. “Conventional is just a much bigger opportunity overall, so we have grown significantly in the last two years.”
Skow thinks gluten-free’s momentum will slow down, but by being a gluten-free option in a traditionally gluten-dominated category like bread, there isn’t as much risk of seeming passé or gimmicky once mainstream enthusiasm of gluten-free has died down. “I think consumers are savvy and they’re smart and be able to tell if something’s a gimmick,” he added.
What will be sustaining gluten-free’s market strength in the coming years are the families of individuals with Celiac Disease, Skow argued. He said: “When one family member has Celiac Disease, typically the family will join in, which from a business standpoint takes your consumer from one individual to a multiple of two, three, four.”