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Gluten-Free Is Here To Stay

| January 1, 2012

Though only one percent of the U.S. population has celiac disease, increased knowledge of gluten-free products is making the category stick with consumers, nevertheless.

The gluten-free market is experiencing huge growth, with global sales expected to reach more than $4.3 billion within the next two years, according to Datamonitor analysis. In the United States, the market is expected to grow by more than $500 million by 2014, which would mean the U.S. represents 53 percent of the global market.

peter Spenuzza, CEO of Rise Bar (Escondido, CA), agreed that this is true, especially as more consumers are diagnosed with either celiac disease or gluten intolerance. “This is a fundamental lifestyle change that one out of every 133 people in the U.S. have to make in order to avoid uncomfortable and often painful side effects associated with eating gluten.”

Spenuzza pointed out that the gluten-free market is projected to reach $5 billion in 2015, up from $2.6 billion in 2010, “so it’s clear that there is ample room for growth.

“Moreover, there are still quite a few product categories that have barely scratched the surface with gluten-free offerings, such as sauces and condiments, ethnic foods and frozen foods,” Spenuzza said. “In addition, mainstream gluten-free product items still need to be further developed as well.”

With big increases in sales predicted, manufacturers don’t see gluten-free as a fad. “Our retailers are beefing up their gluten-free sections, the media is demanding more recipes and information on gluten-free products, and at trade shows across the country—most recently Expo East—we are seeing more of these products than ever before,” said Tina Nelson, vice president of sales and marketing for consumer products with SunOpta Grains & Foods Group (Hope, MN). “Given the steadily increasing consumer and retailer interest in gluten-free products, we think glutenfree is here to stay, and so do many industry analysts. Even fast food chains like Burger King have rolled out glutenfree menu items. When that happens, you know this is not a niche trend but something that is going mainstream.”

However, what’s hot will eventually cool off, according to Ron Seibold, cofounder of Pines International, Inc. (Lawrence, KS), producer of Pines Wheat Grass for 35 years. “During most of that time, we have heard from customers who want to confirm that gluten is not contained in Pines Wheat Grass.Thus, concern about gluten is nothing new. Until recently, those who have Been concerned about gluten have been those with celiac disease,” he added. “Like many other popular diet ideas I’ve seen come and go during the past 35 years, I believe the popularity of gluten-free diets will slowly wane, but it will always be much more popular than it was prior to the current situation.”

Gluten-free Buyers

For people diagnosed with celiac disease, the gluten-free diet is not a choice but a medical necessity, noted Deborah Ceizler, director of marketing and chapter relations of Celiac Disease Foundation (a partner Blue Diamond organization) in Studio City, CA.

Originally, the main consumers of gluten-free products were those with celiac disease and gluten intolerance, which comprised a very niche market.But with a number of new studies that show the effects of a gluten-free diet on the everyday consumer, this market has increased significantly, as evidenced by statistics. “One example is a study that is attempting to correlate the benefits of gluten-free diet for children afflicted with autism, so an increasing number of parents are looking to implement a gluten-free lifestyle for their families,” said Spenuzza.

“Most people buying gluten-free products do so for reasons ranging from a sensitivity to the protein, a desire to remove it from their diet for other health reasons or to accommodate the dietary needs of friends and family members who have decided to go gluten-free,” added Nelson.

For those shoppers, there is no better Time to be on a gluten-free diet due to the quantity and improved quality of gluten-free foods and beverages in the marketplace, added Ceizler. “More consumers are making their product choices based on verification of gluten-free status and clear labeling of gluten-free products.”

New Product Surge

Much of the growth in the gluten-free category is occurring with products that Are substitutes for those that would normally contain wheat or gluten, such as gluten-free flours, cereals, baking mixes, baked goods, etc., according to manufacturers.But almost any product that may contain gluten is getting a revamp.

“Retailers are stocking their shelves with entire sections devoted to glutenfree foods throughout the store in places you might not expect,” noted Nelson. “Dietz & Watson, for example, recently launched a gluten-free line of deli products. This summer, Acme introduced an entire gluten-free deli section with D&W meats, cheeses and condiments at a store outside of Philadelphia.
And retailers are stepping up to make it easier for consumers to find gluten-free items in their stores—Fresh & Easy is just one supermarket chain among many that has dedicated gluten-free labeling programs and lists of all gluten-free products they carry on their website.”

SoL, the sunflower beverage SunOpta rolled out earlier this year under the company’s Sunrich Naturals brand, quickly sold out of its first production run, Nelson said. “It is gluten-, dairyand allergy-free, but the big determinant always comes down to taste. Many gluten-free products cost more than their gluten-containing counterparts, and the products that are flying off the shelves are those that taste best.”

And food isn’t the only category where consumers looking to go gluten-free.

In the supplement aisle, many products have been gluten-free all along.

“Vita Logic has never added gluten to [its] therapeutic formulations,” said Kelly Clonts, the Columbus, GA-based company’s manager. “Vita Logic continues to make new formulas annually to address whole body wellness without adding gluten.”

In addition, Dr. Linda Miles, Lac, DOM, vice president of derma e® Natural Bodycare (Simi Valley, CA), pointed out that consumers that have allergies or sensitivities to internal ingestion of gluten are seeking out gluten-free topical products as well due to adverse skin reactions to the external application of gluten.

“It seems more consumers are striving toward living healthier lifestyles,” she said. “Whether they are following a diet based on their blood type (gluten intolerance is commonly linked to type O blood) or experiencing positive health benefits from removing gluten from their diet in general, these individuals are supporting this lifestyle with gluten-free products.”

Trends in Gluten-free

The desire for bakery-style sweet treats doesn’t decrease just because of gluten intolerance; the number of gluten-free “guilt” foods is booming and will likely continue to increase. “Typical junk food items such as muffins, donuts and Danishes have traditionally been very difficult to produce in gluten-free form with an excellent flavor profile,” noted Rise Bar’s Spenuzza. “While some upand- coming manufacturers are starting to offer options that have great flavor profiles, they still lack in nutritional value. Unfortunately, many consumers may assume these products are more healthful simply because they do not contain gluten, which is definitely not the case.”

Foods that are free from the eight most common food allergens—which include wheat and gluten, but also eggs, dairy, peanuts, soy, tree nuts, fish and shellfish— are huge right now, added Nelson. Also trending are continual improvements in gluten-free products, labeling, privatelabel reformulations and specialty marketers growing retail presence.

Competing With the Conventional

Natural foods retailers such as Sprouts and Whole Foods Market offer impressive gluten-free food selections, and these stores are continually looking to bring in the newest items available.Conventional grocery stores look at natural foods retailers for the fastest-growing products and often replicate the product selection in certain categories like nutrition bars and snacks.

“Specialty items like gluten-free foods Are still dominated by natural foods retailers, but conventional grocery stores will always have the sales volume and more square footage for vast product selection,” noted Spenuzza.

“The fact is that natural food retailers and health food stores have taken a hit on gluten-free product sales now that so many supermarkets and mass merchandisers have begun stocking a wide variety of these products,” said Nelson."However, we believe that natural product retailers can do much to help consumers understand how to incorporate these specialty products into their everyday lives with educational programs, recipe demonstrations and other means of engaging their loyal customers and encouraging repeat sales.There are also opportunities to provide ready-made meals or grab-and-go selections as a way to drive gluten-free and other niche consumers to the stores on a regular basis. With SoL, for example, we will provide retailers who carry the product with seasonal promotion ideas, recipes, menu plans, healthy eating tips and other offers.”

The Best Selection

Competing with large chain stores and choosing the best products are challenges for natural product retailers in the gluten-free marketplace. “Gluten-free foods can still be unhealthy if laden in sugar, saturated fats, artificial ingredients or preservatives,” said Vita Logic’s Clonts.“The health food stores offer the best gluten-free products because they still have to meet ‘natural’ guidelines and are usually without as many ‘bad’ fats or any trans fatty acids (hydrogenated oils).”

Retailers should also be cautious when selecting green food products, Seibold warned. “A good indication of whether a green food company cares about quality is the kind of packaging they use,” he explained. “If they use plastic tubs, which cause products to rapidly oxidize and lose vitality, the Company probably does not care about quality and is buying their cereal grass ingredients based on price.” Noting the FDA’s lack of labeling guidelines for gluten-free products, he suggested that it is best to favor foods that are always gluten-free. “If you choose foods that possibly can contain gluten, like cereal grass, it is best to stick with companies that have a solid reputation for honesty and integrity.”

On the store shelves, consumers benefit from signage or a different shelf tag or talker that indicates products are gluten-free, added Miles. “It may also be beneficial to cross sell by displaying a couple gluten-free skincare products or signage in the gluten-free foods section indicating that the retailer also carries gluten-free skincare products.”

In addition to the expanded presence in shopping aisles with clear labeling, Ceizler suggested posting gluten-free product lists on retailers’ websites as well as partnering with a national celiac disease support organization, such as Celiac Disease Foundation.

Mother Nature’s Market in Tucker and Snellville, GA, has done the latter, according to Owner Stagg Greene. “We try to work with the local chapters of celiac, crohn’s and autism societies at health fairs. Those groups really lean heavily on gluten-free.” Though Greene said he recently noticed more competition from conventional grocers, his stores feature samples of freshly made gluten-free baked goods and demos from vendors “to show that the products don’t have to be bad tasting.That opens a lot of people’s eyes, and is something the grocery stores aren’t doing,” said Greene, adding that explaining how to incorporate gluten-free into daily life with demos and recipe cards works well.

G. F. Joe’s Wages War on Gluten

Joe Spancic was diagnosed with celiac disease in April of 2006. After realizing how hard it was to go gluten-free, he saw an opportunity and opened
G. F. (gluten-free) Joe’s Market in Tumwater, WA, two years later. The store is an all gluten-free grocery market that also specializes in dairy-, casein-, soy-, egg-, yeast-, corn-, potato-, peanutand tree nut-free fare.

Even for this allergy-free Mecca, competition with conventional retailers has become a reality. Recently, the only Walmart in a 100-mile radius with a gluten-free section opened nearby. Its presence has affected G.F. Joe’s sales as well as local mainstream grocery stores’, Spancic acknowledged. “They are undercutting everybody on items like pasta from Deboles.”

Unable to compete in that price battle, Spancic said he focuses on more exclusive products since the retail behemoth is no match when it comes to bringing in “all the good stuff.” The G.F. Joe staff finds the best specialty items at Natural Products Expo West, Spancic said.

“It’s the biggest [glutenfree] food show in the world. Over the last four years we’ve built relationships with the manufacturers. When they have something new coming in, they email us.”

Listening to the gluten-free customer is also enlightening, Spancic said. “They have a finger on the pulse.They ask me, ‘Hey, can you get this for me?’ It’s about staying ahead of the game.”

After Expo West’s new gluten-free products are launched and have arrived in the store by summer, come autumn, customers are looking for comfort foods, according to Spancic. “People ask, ‘How do I make cut-out cookies or pumpkin pie?’ They want traditional foods converted to gluten-free.”

On Spancic’s wish list for the store is 15 more freezers, he said with a laugh, but was only half joking. “The fastest-growing area is frozen foods,” he explained. Another wish is for a solution to the most basic gluten-free problem: “Bread products, in my opinion, need better options.”

Though only one percent of the U.S. population has celiac disease, increased knowledge of gluten-free products is making the category stick with consumers, nevertheless.

The gluten-free market is experiencing huge growth, with global sales expected to reach more than $4.3 billion within the next two years, according to Datamonitor analysis. In the United States, the market is expected to grow by more than $500 million by 2014, which would mean the U.S. represents 53 percent of the global market.

peter Spenuzza, CEO of Rise Bar (Escondido, CA), agreed that this is true, especially as more consumers are diagnosed with either celiac disease or gluten intolerance. “This is a fundamental lifestyle change that one out of every 133 people in the U.S. have to make in order to avoid uncomfortable and often painful side effects associated with eating gluten.”

Spenuzza pointed out that the gluten-free market is projected to reach $5 billion in 2015, up from $2.6 billion in 2010, “so it’s clear that there is ample room for growth.

“Moreover, there are still quite a few product categories that have barely scratched the surface with gluten-free offerings, such as sauces and condiments, ethnic foods and frozen foods,” Spenuzza said. “In addition, mainstream gluten-free product items still need to be further developed as well.”

With big increases in sales predicted, manufacturers don’t see gluten-free as a fad. “Our retailers are beefing up their gluten-free sections, the media is demanding more recipes and information on gluten-free products, and at trade shows across the country—most recently Expo East—we are seeing more of these products than ever before,” said Tina Nelson, vice president of sales and marketing for consumer products with SunOpta Grains & Foods Group (Hope, MN). “Given the steadily increasing consumer and retailer interest in gluten-free products, we think glutenfree is here to stay, and so do many industry analysts. Even fast food chains like Burger King have rolled out glutenfree menu items. When that happens, you know this is not a niche trend but something that is going mainstream.”

However, what’s hot will eventually cool off, according to Ron Seibold, cofounder of Pines International, Inc. (Lawrence, KS), producer of Pines Wheat Grass for 35 years. “During most of that time, we have heard from customers who want to confirm that gluten is not contained in Pines Wheat Grass.Thus, concern about gluten is nothing new. Until recently, those who have Been concerned about gluten have been those with celiac disease,” he added. “Like many other popular diet ideas I’ve seen come and go during the past 35 years, I believe the popularity of gluten-free diets will slowly wane, but it will always be much more popular than it was prior to the current situation.”

Gluten-free Buyers

For people diagnosed with celiac disease, the gluten-free diet is not a choice but a medical necessity, noted Deborah Ceizler, director of marketing and chapter relations of Celiac Disease Foundation (a partner Blue Diamond organization) in Studio City, CA.

Originally, the main consumers of gluten-free products were those with celiac disease and gluten intolerance, which comprised a very niche market.But with a number of new studies that show the effects of a gluten-free diet on the everyday consumer, this market has increased significantly, as evidenced by statistics. “One example is a study that is attempting to correlate the benefits of gluten-free diet for children afflicted with autism, so an increasing number of parents are looking to implement a gluten-free lifestyle for their families,” said Spenuzza.

“Most people buying gluten-free products do so for reasons ranging from a sensitivity to the protein, a desire to remove it from their diet for other health reasons or to accommodate the dietary needs of friends and family members who have decided to go gluten-free,” added Nelson.

For those shoppers, there is no better Time to be on a gluten-free diet due to the quantity and improved quality of gluten-free foods and beverages in the marketplace, added Ceizler. “More consumers are making their product choices based on verification of gluten-free status and clear labeling of gluten-free products.”

New Product Surge

Much of the growth in the gluten-free category is occurring with products that Are substitutes for those that would normally contain wheat or gluten, such as gluten-free flours, cereals, baking mixes, baked goods, etc., according to manufacturers.But almost any product that may contain gluten is getting a revamp.

“Retailers are stocking their shelves with entire sections devoted to glutenfree foods throughout the store in places you might not expect,” noted Nelson. “Dietz & Watson, for example, recently launched a gluten-free line of deli products. This summer, Acme introduced an entire gluten-free deli section with D&W meats, cheeses and condiments at a store outside of Philadelphia.
And retailers are stepping up to make it easier for consumers to find gluten-free items in their stores—Fresh & Easy is just one supermarket chain among many that has dedicated gluten-free labeling programs and lists of all gluten-free products they carry on their website.”

SoL, the sunflower beverage SunOpta rolled out earlier this year under the company’s Sunrich Naturals brand, quickly sold out of its first production run, Nelson said. “It is gluten-, dairyand allergy-free, but the big determinant always comes down to taste. Many gluten-free products cost more than their gluten-containing counterparts, and the products that are flying off the shelves are those that taste best.”

And food isn’t the only category where consumers looking to go gluten-free.

In the supplement aisle, many products have been gluten-free all along.

“Vita Logic has never added gluten to [its] therapeutic formulations,” said Kelly Clonts, the Columbus, GA-based company’s manager. “Vita Logic continues to make new formulas annually to address whole body wellness without adding gluten.”

In addition, Dr. Linda Miles, Lac, DOM, vice president of derma e® Natural Bodycare (Simi Valley, CA), pointed out that consumers that have allergies or sensitivities to internal ingestion of gluten are seeking out gluten-free topical products as well due to adverse skin reactions to the external application of gluten.

“It seems more consumers are striving toward living healthier lifestyles,” she said. “Whether they are following a diet based on their blood type (gluten intolerance is commonly linked to type O blood) or experiencing positive health benefits from removing gluten from their diet in general, these individuals are supporting this lifestyle with gluten-free products.”

Trends in Gluten-free

The desire for bakery-style sweet treats doesn’t decrease just because of gluten intolerance; the number of gluten-free “guilt” foods is booming and will likely continue to increase. “Typical junk food items such as muffins, donuts and Danishes have traditionally been very difficult to produce in gluten-free form with an excellent flavor profile,” noted Rise Bar’s Spenuzza. “While some upand- coming manufacturers are starting to offer options that have great flavor profiles, they still lack in nutritional value. Unfortunately, many consumers may assume these products are more healthful simply because they do not contain gluten, which is definitely not the case.”

Foods that are free from the eight most common food allergens—which include wheat and gluten, but also eggs, dairy, peanuts, soy, tree nuts, fish and shellfish— are huge right now, added Nelson. Also trending are continual improvements in gluten-free products, labeling, privatelabel reformulations and specialty marketers growing retail presence.

Competing With the Conventional

Natural foods retailers such as Sprouts and Whole Foods Market offer impressive gluten-free food selections, and these stores are continually looking to bring in the newest items available.Conventional grocery stores look at natural foods retailers for the fastest-growing products and often replicate the product selection in certain categories like nutrition bars and snacks.

“Specialty items like gluten-free foods Are still dominated by natural foods retailers, but conventional grocery stores will always have the sales volume and more square footage for vast product selection,” noted Spenuzza.

“The fact is that natural food retailers and health food stores have taken a hit on gluten-free product sales now that so many supermarkets and mass merchandisers have begun stocking a wide variety of these products,” said Nelson."However, we believe that natural product retailers can do much to help consumers understand how to incorporate these specialty products into their everyday lives with educational programs, recipe demonstrations and other means of engaging their loyal customers and encouraging repeat sales.There are also opportunities to provide ready-made meals or grab-and-go selections as a way to drive gluten-free and other niche consumers to the stores on a regular basis. With SoL, for example, we will provide retailers who carry the product with seasonal promotion ideas, recipes, menu plans, healthy eating tips and other offers.”

The Best Selection

Competing with large chain stores and choosing the best products are challenges for natural product retailers in the gluten-free marketplace. “Gluten-free foods can still be unhealthy if laden in sugar, saturated fats, artificial ingredients or preservatives,” said Vita Logic’s Clonts.“The health food stores offer the best gluten-free products because they still have to meet ‘natural’ guidelines and are usually without as many ‘bad’ fats or any trans fatty acids (hydrogenated oils).”

Retailers should also be cautious when selecting green food products, Seibold warned. “A good indication of whether a green food company cares about quality is the kind of packaging they use,” he explained. “If they use plastic tubs, which cause products to rapidly oxidize and lose vitality, the Company probably does not care about quality and is buying their cereal grass ingredients based on price.” Noting the FDA’s lack of labeling guidelines for gluten-free products, he suggested that it is best to favor foods that are always gluten-free. “If you choose foods that possibly can contain gluten, like cereal grass, it is best to stick with companies that have a solid reputation for honesty and integrity.”

On the store shelves, consumers benefit from signage or a different shelf tag or talker that indicates products are gluten-free, added Miles. “It may also be beneficial to cross sell by displaying a couple gluten-free skincare products or signage in the gluten-free foods section indicating that the retailer also carries gluten-free skincare products.”

In addition to the expanded presence in shopping aisles with clear labeling, Ceizler suggested posting gluten-free product lists on retailers’ websites as well as partnering with a national celiac disease support organization, such as Celiac Disease Foundation.

Mother Nature’s Market in Tucker and Snellville, GA, has done the latter, according to Owner Stagg Greene. “We try to work with the local chapters of celiac, crohn’s and autism societies at health fairs. Those groups really lean heavily on gluten-free.” Though Greene said he recently noticed more competition from conventional grocers, his stores feature samples of freshly made gluten-free baked goods and demos from vendors “to show that the products don’t have to be bad tasting.That opens a lot of people’s eyes, and is something the grocery stores aren’t doing,” said Greene, adding that explaining how to incorporate gluten-free into daily life with demos and recipe cards works well.

G. F. Joe’s Wages War on Gluten

Joe Spancic was diagnosed with celiac disease in April of 2006. After realizing how hard it was to go gluten-free, he saw an opportunity and opened
G. F. (gluten-free) Joe’s Market in Tumwater, WA, two years later. The store is an all gluten-free grocery market that also specializes in dairy-, casein-, soy-, egg-, yeast-, corn-, potato-, peanutand tree nut-free fare.

Even for this allergy-free Mecca, competition with conventional retailers has become a reality. Recently, the only Walmart in a 100-mile radius with a gluten-free section opened nearby. Its presence has affected G.F. Joe’s sales as well as local mainstream grocery stores’, Spancic acknowledged. “They are undercutting everybody on items like pasta from Deboles.”

Unable to compete in that price battle, Spancic said he focuses on more exclusive products since the retail behemoth is no match when it comes to bringing in “all the good stuff.” The G.F. Joe staff finds the best specialty items at Natural Products Expo West, Spancic said.

“It’s the biggest [glutenfree] food show in the world. Over the last four years we’ve built relationships with the manufacturers. When they have something new coming in, they email us.”

Listening to the gluten-free customer is also enlightening, Spancic said. “They have a finger on the pulse.They ask me, ‘Hey, can you get this for me?’ It’s about staying ahead of the game.”

After Expo West’s new gluten-free products are launched and have arrived in the store by summer, come autumn, customers are looking for comfort foods, according to Spancic. “People ask, ‘How do I make cut-out cookies or pumpkin pie?’ They want traditional foods converted to gluten-free.”

On Spancic’s wish list for the store is 15 more freezers, he said with a laugh, but was only half joking. “The fastest-growing area is frozen foods,” he explained. Another wish is for a solution to the most basic gluten-free problem: “Bread products, in my opinion, need better options.”

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