food

Gluten-Free Showing Double-Digit Growth

Gluten Free Rice Chex Increasing concern about medical maladies associated with consumption of gluten and a rapidly expanding number of product options are driving double-digital sales for gluten-free food and beverages, according to a new report from Packaged Facts.

These products saw compound annual growth of 28% between 2004 and 2008, to reach $1.56 billion. Although PF expects the recession to slow growth to 11% in 2009 and 9% in 2010, it will pick up to 20% by 2012, when sales should reach $2.63 billion.

For purposes of the study, gluten is defined as including both the proteins gliadin and glutenin found in wheat, and similar proteins found in rye, barley and triticale. Only foods and beverages that are marketed as gluten-free are included (those that are gluten-free by their nature, such as fresh fruit, are excluded).

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Awareness and diagnoses of gluten-triggered medical conditions have increased greatly in recent years. The most common is celiac disease, a chronic inflammatory disorder of the small intestine estimated by experts to affect up to 1% of the U.S. population. Allergic reactions to gluten can also contribute to autism, multiple sclerosis, attention-deficit/hyperactivity disorder, repetitive strain or stress injury, and irritable bowel syndrome.

Web sites, books and DVDs on gluten-related illnesses and gluten-free diets have proliferated, and interest surged further after Oprah Winfrey announced that she is on such a diet. As a result, gluten-free products have moved into mainstream retailers and drawn the attention of major CPGs.

Supermarkets now account for 30% of gluten-free products--the same percentage as health/natural foods stores, according to PF. Internet and catalog sales account for another 20%, and the remaining 20% comes from a broad array of channels, including mass merchandisers and convenience, club, drug and specialty stores.

Specialty marketers still dominate gluten-free food and beverages. But health/natural foods marketers and supermarket private-label brands have been growing. In fact, Wegman's introduced more gluten-free products last year than any other marketer.

In 2006, major food and beverage marketers jumped in. That year, Anheuser-Busch launched the gluten-free beer brand Redbridge, and General Mills converted Rice Chex into a gluten-free product.

Product conversions are an increasingly important contributor to major CPGs' growing number of gluten-free products, along with product launches and acquisitions of gluten-free marketers.

In total, nearly 1,200 new gluten-free foods and beverages were launched by more than 225 marketers last year, according to Datamonitor's Product Launch Analytics database (formerly Productscan). The compound annual growth in number of SKU's over the past four years was 33%.

Gluten-free varieties of sweets and snacks (including confections, chips and frozen desserts) showed the largest proliferation of SKUs, although the relatively healthy cereal bars snack group saw the largest growth of all. Gluten-free beers are also multiplying, although they haven't made much of a dent in the market to date.

For years, consumers have been waiting for clear FDA gluten-free labeling standards. The regulatory body missed its original final-rule passage deadline (last August), but will presumably finalize standards this year. The proposed regulation calls for a maximum permissible amount of gluten in a food labeled "gluten-free" of 20 parts per million. That standard has also been proposed internationally.

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