No Fad Here.
As more consumers embrace a gluten-free lifestyle, gluten-free products are shifting from niche to mainstream status.
If you believe that the gluten-free trend is really a "here today, gone tomorrow" fad, think again. Although they were once thought of as niche products of interest only to consumers who cannot tolerate wheat, gluten-free foods and beverages now are a "mainstream sensation," according to a February 2011 report from Rockville, Md.-based Packaged Facts, a division of MarketResearch.com.
In fact, U.S. retail sales of gluten-free foods and beverages reached an estimated $2.6 billion in 2010, Packaged Facts says. And the market research firm expects sales to continue on a rapid upward climb, forecasting that the U.S. gluten-free retail market will approach $6 billion in 2015.
Zina Minz, founder and CEO of La Vita Hlealth Foods Ltd., Suffern, N.Y., agrees that the gluten-free push is no fad, adding that up until recently, many of the people who suffer from celiac disease or gluten intolerance were not diagnosed properly and went untreated.
"Fads come and go," she says. "But those consumers who are on a health management program and may not consume gluten will be looking for tasty alternatives in gluten-free products."
Room to grow
The gluten-free market still is underdeveloped within traditional food, drug and mass merchandise retail outlets. In conventional supermarkets, for example, gluten-free crackers represent only 2 percent of overall category sales, notes Jim Garsow, director of marketing for Loves Park, Ill.-based TH Foods Inc. But in the natural retail space, gluten-free crackers now account for more than 40 percent of overall category sales.
"The major supermarket chains must make a leap and take the lead to brand more gluten-free products," Minz says. "Consumers trust their favorite store brands. They are waiting; but they will not wait too long. If their stores are too slow and consumers [do] not find what they are looking for, they may switch to another brand."
Speaking of opportunities, retailers will want to start with the basics when reformulating gluten-containing favorites to come up with gluten-free offerings, notes Ari Weinberg, president of Toronto-based O'Doughs.
"They'll first and foremost have to have a loaf of bread as one of their signature items -- it's a staple for everyone," he says.
Elliot Dutra, president of Spencer, N.Y.-based Raymond-Hadley Corp., adds bake mixes and dry pasta to the list of basics, while Weinberg sees opportunity in convenience-minded products such as pizza crusts and pizzas.
Philip Gentlesk, president of Midlantic Consulting LLC, Charlotte, N.C., agrees with the need for convenient options. He points to single-serve frozen meals and ready-to-eat foods as ripe opportunities.
Ultimately, retailers should look to large categories that traditionally are dominated by processed wheat products, Gentlesk adds. But too many retailers are dragging their feet in doing so -- and speed to market is extremely important.
"I was surprised when one major regional retailer told me they weren't offering gluten-free private brands because of possible legal issues in the absence of what they called a 'clear definition of gluten-free,'" he says. "Amazing."
Gentlesk also notes that gluten-free is beginning to develop as part of the emerging "allergy-free" category. As such, he believes retailers should approach gluten-free product development with other allergens in mind.
"For example, gluten and casein -- milk protein -- are believed to contribute to problems for people with autism spectrum disorders," he says. "Developing gluten-free products that contain dairy and other allergens can be limiting."
And retailers also should ensure that any products they plan to label "gluten-free" meet the proposed FDA guidelines of less than 20 parts per million of gluten.
"Since gluten-free is a hot trend, many companies are introducing products claiming to be gluten-free, but do not necessarily have quality assurance systems in place to support it," Garsow says. "I recommend that manufacturers and retailers use the strictest guidelines in the industry. Currently, the Gluten-Free Certification Organization (GFCO) has the most rigid and robust program."
To draw shoppers to new own-brand products within the segment, retailers need to call attention to their gluten-free status. In addition to a "gluten-free" callout, product labels should sport copy offering shoppers assurance that gluten levels are regularly tested or that the product is made in a gluten-free facility, Gentlesk says.
"Also, any third-party certification for gluten-free should be prominently called out on packaging," he says.
Garsow notes that several gluten-free certification organizations have symbols respected by gluten-free consumers, with the most common one being the GFCO logo.
Weinberg believes retailers also should consider adding -- and calling out on the label -- key nutritional benefits outside the gluten-free arena.
"A lot of the gluten-free products in the past didn't have a great nutritional value," he maintains. "So you're seeing a lot of products coming out now with high fiber content, good protein, vitamins, things like that. Having a clean label is very important, as consumers are becoming very health-conscious these days."
But no matter how appealing, the label won't be enough to point all shoppers to store brand gluten-free items. Smart merchandising also plays a critical role here. Some retailers mix gluten-free items in with their traditional gluten-containing cousins, while others dedicate a special area of the store to such items. Still others do both.
"Consumers find it easier to have a dedicated section of gluten-free foods," Gentlesk contends. "Reading labels and trying to determine if a particular product is 'safe' can be very challenging for the newly diagnosed."
But Garsow is not convinced a separate section is necessary.
"A separate aisle does not maximize sales of gluten-free products," he maintains. "Since they are alternatives to the conventional products, they need to be positioned near the gluten-containing versions. However, use shelf tags and other signage so that consumers can easily identify gluten-free options."
And for her part, Minz votes for merchandising in both a special section and next to traditional products.
"Let consumers decide if they want to buy gluten-free," she says.
Dutra, too, sees a benefit in dual placement.
"At this point, retailers should put gluten-free 'stores' [in] as many places as possible," he says.
Although he agrees "the jury is still out" on the best merchandising approach, Weinberg believes educating store managers and employees about gluten-free products and their locations is even more important. These folks then will be able to direct shoppers to specific gluten-free products.
Minz, too, sees education as critical.
"The store employees must learn about gluten intolerance and the benefits of eating gluten-free," she says. "Consumers should feel comfortable asking for gluten-free products. There should be clear signs outside as well as inside the stores directing consumers to gluten-free foods and advertising these products and their benefits."
Sampling, too, could help ensure the success of great-tasting store brand gluten-free items, Garsow suggests.
"Consumers are very wary of wasting their money on products that taste terrible," he notes.
Because gluten-free consumers are looking for meal and snack ideas, Garsow also recommends that retailers display and demo complementary gluten-free products such as rice crackers with hummus. They also could provide gluten-free recipe ideas along with coupons for trying new products.
Heed their advice
Armed with the right products and enough marketing muscle, retailers could become a huge force within the growing gluten-free market.
"There are so many choices in traditional foods on the shelves but very [few] choices in the gluten-free segment," Minz stresses. "Retailers may want to start rethinking their strategy and giving more aisle space to gluten free foods."
But retailers also have to be willing to do their homework, Gentlesk stresses.
"Understand the gluten-conscious consumer," he advises. "Understand celiac disease. Understand the challenges of restrictive diets. I find that many retailers know they should do something in gluten-free but fall short in demonstrating to the consumer that they actually care about them and their dietary challenges."
Finally, go straight to the manufacturer when it comes to product procurement, Dutra advises.
"The right manufacturer can offer prices that are often less than half of a national brand and be at least as good in quality," he says.
But retailers must verify where the products are made, Garsow says, with a gluten-free facility being the safest, and validate that the raw materials always are gluten-free.
"Some products are coming from China and other sources where the food safety standards are not as strong as in the U.S.," he explains. "Be picky."
A number of national brand products (and store brand products, too) that never contained gluten are now sporting labels advertising their gluten-free status. Although the labeling actually can be helpful to consumers on a gluten-free regime, marketers will want to approach with caution -- and ensure they are following proposed FDA guidelines, says Jim Garsow, director of marketing for Loves Park, Ill.-based TH Foods Inc.
The proposed guidelines allow any food that is naturally free of gluten, with the exception of foods made from oats, to bear the "gluten-free" claim, he explains, as long as the wording of the claim clearly indicates that all foods of the same type (not just the brand bearing the labeling claim) are gluten-free, and the food contains less than 20 parts per million of gluten.
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|Publication:||Progressive Grocer's Store Brands|
|Date:||Jan 1, 2012|
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