Gluten-Free has quickly ballooned from a niche fad into one of the fastest growing trends in food and the implications of this on new product launches as well as established brands will need to be considered in the coming months.
As of the beginning of 2014, NDP Group found that 30% of adults look for Gluten-Free products—for individuals that describe themselves as health-conscious shoppers, the percentage is closer to 70% and projected to raise to 80% in the next 3 years. The broad and growing adoption by individuals not required to shop this market category, may indicate the readiness of Gluten-Free products to be moved toward the mainstream of FMCG merchandising as has been previously seen within niche categories like fair-trade, organic and vegetarian foods—and which has already begun to some extent with Gluten-Free.
If we can use these other categories as examples, marketing Gluten-Free options alongside regular counterparts would open up the market to those who may not have allergy issues but choose seek alternatives they perceive to be healthier. However, if integration of products that appeal to both groups that shop this category is to be a viable option, carefully considered labeling will be of extreme importance to these high-involvement consumers. Unlike with strongly loyal organic consumers, for the 2.3 million Americans with celiac disease, a mistake in the supermarket could be potentially dangerous, making label reading a necessity, and mistakes unforgivable. And for the shoppers looking to Gluten-Free for perceived health benefits, other options exist so products must appeal for more reasons than just Gluten-Free.
But are market researchers’ widely differing estimates about the size and projections for this market to be trusted? Since naturally Gluten-Free foods are allowed by the FDA to bear the Gluten-Free claim it is important to understand the context in which statements about the number of new product introductions to the category are made. By balancing brand story with the Gluten-Free benefits, manufactures can balance the appeal on multiple levels—and play to this opportunity while still engaging their core consumer without having to answer that question.
The rising tide of Gluten-Free has not, however, been missed by National Brand counterparts to companies focused on this specialty market. With Mintel estimating the Gluten-Free market in the US at $10.5 billion in 2013—a 44% gain since 2011—it is easy to see why. From a merchandising perspective, this is resulting in supermarkets being fragmented and difficult to shop if looking specifically for Gluten-Free alternatives. Many Gluten-Free options offered by smaller companies and “specialty” brands are still resigned to the “health foods” or “natural” sections of the store while similar Gluten-Free options are being merchandised along-side their non-gluten-free competitors in whichever area of the store they naturally occupy. As new products are introduced, and more Gluten-Free products are moved into the mainstream, packaging and brand communication will become increasingly important. These specialty brands will be forced to compete against National Brands and can no longer rely on the combined allure of all of the products in the “Natural” section of the store to build equity and raise purchase intent through location. Clear labeling, strong brand presence, and a concise selling proposition (other than just Gluten-Free) will become the standard and will separate out which brands can survive and profit from this transition, and which will be left behind.