Retailers, manufacturers ride the wave of gluten-free - SmartBrief

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Retailers, manufacturers ride the wave of gluten-free

6 min read

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(Photo: flickr user elana’s pantry)

It’s no surprise that many consumers adhere to gluten-free diets due to gluten allergy or intolerance, but a growing number of consumers are turning to gluten-free products as a way to live healthier lifestyles. The gluten-free market is already a significant one, and it is poised for even more growth in the coming years. While entering the gluten-free market carries a lot of benefits for manufacturers and retailers, there are certain risks companies should keep in mind when trying to capitalize on the gluten-free craze.

The gluten-free diet is one of the most popular diets in the U.S., Alessio Fasano of the Center for Celiac Research said during a webinar this week. The gluten-free market rakes in about $10 billion in annual sales, and while some of that comes from consumers who eat gluten-free for health reasons, a significant amount is due to consumers choosing a gluten-free diet because they think it is healthier. In fact, more than 50 million people embrace a gluten-free diet as part of a healthy lifestyle, which is the most popular reason among American adults for eating gluten-free, according to Fasano.

Manufacturers and retailers that enter the gluten-free market stand to appeal to a significant shopper base. About 70% of shoppers who seek out natural products also seek out gluten-free products, and 90% of those shoppers plan to increase or maintain their spending on gluten-free products, according to Joel Warady, chief sales and marketing officer for Enjoy Life Foods. He said that between shoppers who seek out “free-from” products in general and those who seek out gluten-free products, the market has the potential to reach nearly $24 billion by 2020.

“It’s a tremendously large potential market,” Warady said during the webinar.

At Enjoy Life, the main focus is offering consumers products that are certified gluten-free, free of the top eight allergens, including dairy, peanuts and soy, and free of genetically-modified ingredients, for the most part, and the top reason shoppers seek out Enjoy Life’s products is because they are gluten free, Warady said.

The gluten-free market has helped Enjoy Life achieve growth that includes a 41% jump in sales in 2014 and a recent acquisition of the company by Mondelez, and while gluten-free is a major draw for customers, it’s not the only thing to keep in mind when trying to penetrate the gluten-free market, according to Warady.

“It’s not enough to be gluten-free. People are looking for more,” he said.

According to Warady, gluten-free shoppers are also interested in products that have added functionalities and added benefits, and the companies that are setting themselves up for success in the gluten-free market are those that are incorporating additional qualities into their products outside of just being gluten-free. When it comes to offering shoppers gluten-free products, listening to the customer is key.

“The consumer will tell you exactly what they need,” Warady said.

For Enjoy Life, listening to their consumers is essential to their business, he said. The company grows its business and its product offerings by engaging with consumers through social media and other channels, and by having conversations with them at gluten-free events across the country, where Enjoy Life is able to reach more than 135,000 consumers, according to Warady.

“We’re very focused on dialoging with our consumers,” he said.

Enjoy Life also reaches shoppers through supporting advocacy groups and employing more than 500 bloggers to talk about its products, incorporating mobile strategies where they’re applicable. All of these efforts have helped Enjoy Life grow to be a strong player in the lucrative gluten-free market.

“What’s important is that this is very much a peer-to-peer marketplace,” Warady said. “We are constantly communicating to our consumer about what is so unique about our products.”

The gluten-free market isn’t for everyone, the experts said during the webinar. Becoming certified gluten-free is not for the faint of heart. In the past, the market was a “buyer beware situation,” said Stephen Taylor, a food science and technology professor at the University of Nebraska – Lincoln, but now there are strict regulations manufacturers must adhere to if they want to be part of the gluten-free market.

In the U.S., regulations require that gluten-free products contain less than 20 parts per million of gluten, they can’t be derived from a gluten-containing source unless it’s proven that processing removes the gluten, they can be inherently gluten free and the gluten-free certification doesn’t apply to fermented beverages derived from grain containing gluten, Taylor said. And adhering to the regulations can get tricky, he said.

Companies that look to have their products certified as gluten-free bear the burden of ensuring the products are truly gluten free while avoiding the many gluten-derived ingredients, and manufacturers can’t assume that gluten-free grains are always going to be gluten-free, so they must always test those ingredients from suppliers, according to Taylor.

“You have to recognize that commodity contamination can occur,” he said.

Despite the risks, entering the gluten-free market holds a lot of growth potential for food manufacturers, the experts said, but manufacturers aren’t the only companies that can ride the wave of gluten-free demand to their benefit. Retailers are also increasingly looking for a piece of the gluten-free market, and more grocery stores are singling out gluten-free products on their shelves in an effort to attract those shoppers adhering to gluten-free diets, according to Warady.

One of the great things about the market right now, he said, is that retailers are incorporating dedicated gluten- and allergy-free sections into grocery aisles. And the best way to capitalize on gluten-free shoppers is to carve out a specific set for gluten-free products within the natural foods aisles as a means of making shoppers’ experiences finding gluten-free products as easy as possible. Warady also stressed the importance of retailers and manufacturers working together to educate consumers about their gluten-free choices.

“At the end of the day, it’s helping the consumer to understand how to shop the store,” he said.

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