According to Packaged Facts, US retail sales of gluten-free products grew an astounding 81% in just one year in 2013, but by the next year growth had dropped to 30% and by 2015 was down to 11%. The consumer research firm projected that by 2020, growth of gluten-free sales in the US would level out at about 5-6%.
To an extent, this slowdown is natural as each year comes off a bigger and bigger base – making it significantly more challenging to maintain high year-over-year growth rates. And indeed, the base for gluten-free sales is large, although estimates vary widely from source to source. For example, according to Markets and Markets research, the global market for gluten-free products was valued at $4.63 billion in 2015 and predicted to reach $7.59 billion by 2020. While Packaged Facts placed it much lower $1.66 billion in 2016.
Regardless, the different reports show the same general trend of sales on the rise, but the growth rate slowing.
However, as Jen Cafferty, founder and CEO of the Gluten Free Media Group, explains in this episode of FoodNavigator-USA’s Soup-To-Nuts Podcast, this equation shifts dramatically when products making gluten-free claims also make allergen-friendly claims. Cafferty, along with Kim Koeller, who founded Gluten Free Passport, also outlines other strategies to drive ongoing growth in the gluten-free market by identifying categories – and channels – ripe for innovation and increased distribution.
The multiplying power of allergen-friendly claims
Citing recently released data from SPINS retail channel data, Cafferty described the exponential impact that adding allergen-friendly claims, or even just basic allergen labeling, to packages can have on gluten-free products.
“If a product is labeled gluten-free, and this is across frozen, refrigerated and shelf stable departments, sales are currently 3.1% so that is a $37.2 billion market, but if a product is labeled gluten-free as well as allergen friendly … that growth is 15.2%,” Cafferty said.
She attributes this to people who are gluten-free being more in tune with their bodies and noticing when other ingredients impact how they feel – prompting them to avoid more than just gluten.
According to Koeller, this data aligns with what she and Cafferty saw in a recent consumer survey they conducted that compared consumer preferences and experiences about gluten-free and food allergy lifestyles in 2017 to a similar study they conducted 10 years earlier.
The research, which included 16,000 consumers impacted by celiac, gluten-free diets and food allergies, looked at how much progress the industry has made in addressing consumers’ top preferences and where there is still room for improvement.
At the highest level, Koeller explains the research found taste is the number one purchase driver, but in the past 10 years labeling of gluten free or allergen friendly has become more important as has availability and cost.
In addition, the survey found consumers want better training around allergies at restaurants and travel providers and wider selection in these places as well.
Areas primed for growth
Based on these findings, as well as anecdotal observations with working with thousands of people following gluten-free and allergy friendly diets, Cafferty outlined three ways brands and retailers together can drive growth in these categories.
The first is to sample more heavily as products in these categories are more expensive and have a bad rap for historically tasting like cardboard.
The second is to work with retailers to create a dedicated space in stores for basics that are allergen friendly, as 50% of the survey respondents said this is something they want.
Third is to launch more allergen friendly products that are plant-based and snacks. Within the snack space, Koeller says she sees a particularly high need for protein-based options that are safe for those with allergies.
A hidden danger in plant-based products
While Koeller agrees that plant-based products have tremendous market growth potential within the allergy space, she also cautioned that not all plant-based ingredients are safe for consumers with dietary sensitivities and intolerances.
She explained that she has a shellfish allergy and learned the hard way that also applies to some seaweeds, which are increasingly popular in plant-based products.
While there is a lot of room for innovation in the gluten-free and allergen-friendly space, Cafferty advises brands to avoid some categories because they are too crowded. These include bars, chips and jerky.
Channels ripe for growth
Brands can also drive growth of gluten-free and allergen-friendly products by targeting new distribution channels that either have so-far been over-looked or have severely restricted options. These include universities, health care providers and airlines.
Koeller notes that shelf stable products in particular are well positioned to sell into airlines and medical facilities, although the latter is a bit trickier to navigate as consistent demand is not as high.
Based on their consumer research, Koeller also noted in the next two years consumers want to see increased training for restaurants and travel providers as well as a wider selection of better tasting – and lower priced – options across the board.