The rise of gluten-free foods in the UK

Posted by AFN Staff Writers on 9th August 2011

Bread ShelvesRising diagnosis rates of coeliac disease, combined with an increased awareness of the perceived benefits of a gluten-free diet, are driving growth in the free-from sector in the UK.

Euromonitor forecasts that the gluten-free sector will grow by almost 10% between 2011 and 2015 to become a channel worth GBP95.5m (US$155.2m) a year.

According to Norma McGough, head of diet & health at charity Coeliac UK, some 14,000 people are newly diagnosed each year, a number which she says was “assumed to be much lower”.

Statistics from Coeliac UK, one in 100 people have coeliac disease, while 2009 estimates from the National Institute for Clinical Excellence found that only 10-15% of that 1% are clinically diagnosed.

Celebrity endorsement has not hurt the channel either, with glossy magazines extolling how Gwyneth Paltrow, Victoria Beckham, Rafel Nadal and even Bill Clinton are enjoying the percieved benefits of such a lifestyle.

The growth seen by specialist manufacturers like Dr Schar and Genius Foods have encouraged mainstream manufacturers and retailers into the channel, with Warburtons and The Co-operative Group launching ranges this year, joining other established own-label brands from Sainsbury’s, Tesco and Asda.

While increased awareness is benefiting the industry, many people without coeliac disease, IBS or diagnosed wheat intolerances or sensitivities are jumping on the bandwagon under the auspices of improving their health. According to some, a gluten-free diet can benefit cholesterol levels, digestion and energy levels.

However, McGough says there is “no evidence” a gluten-free diet having a therapeutic effect for people that do not have coeliac disease or intolerance or sensitivity to wheat.

“Certainly there have always been diet fads and there will always be people who will want to try different diets. There may be that element in some cases. But sticking to a gluten-free diet is no mean feat in the longer term,” emphasises McGough.

She also suggests that perhaps those taking up a gluten-free diet for lifestyle purposes may undermine the seriousness of the illness.

Indeed, for specialist manufacturers the focus remains firmly fixed on servicing those who buy into the range in response to illness as they represent a “lifelong value”.

“They have to go on a gluten-free diet for life, to cope with their condition, so they will always be our core target market, says Emma Herring, Dr Schar retail brand manager. She adds that there is also an opportunity around consumers who have allergy and intolerance or gluten sensitivity. “That area is growing so much and represents good value for us.”

Bread and baked products take up the lion’s share of the channel, with some 78% of sales at GBP67.6m, according to Euromonitor data. However, other channels including baby food and pasta are also recording significant development, with Euromonitor predicting 92.5% and 672.3% growth for the channels respectively between 2005-2015.

Euromonitor predicts sales of gluten-free baby food will reach GBP15m this year, while gluten free pasta wll reach GBP4.3m.

According to Euromonitor data, HJ Heinz’s Farley’s brand takes up some 9.5% of the overall gluten-free market, while Dr Schar’s True Free and Dietary Specials take the second and third spaces with 9.1% and 7.5%, respectively.

Herring says the UK leads the way when compared to the other markets that Dr Schar operates in, which includes continental Europe and the US. “Our fixtures in the UK are much more developed and mature. We do have a lot more competitors that in Europe and the US,” she says.

Dr Schar is one of the few manufacturers to work across fresh, ambient and frozen. “In frozen we’re market leader,” says Herring, adding that there are few competitors in that category. The company is focusing its development on the frozen sector, and, following the acquisition of a cake factory in Spain, is likely to focus its efforts on that area. “In the past it’s not been our core area of competence, but now we’re able to look at that,” says Herring.

The UK’s gluten-free sector has taken massive leaps forward in terms of innovation and quality but Norma McGough, head of diet and health at charity Coeliac UK, suggests there is some way to go before products are on par with their mainstream counterparts.

“Quality can be variable, although it definitely has been improved,” says McGough. However, she highlights the nutritional differences that can occur between gluten-free and mainstream products. For example, she highlights the failings of the UK government’s Bread and Flour legislation of 1998, which means that iron, thiamin, nicotinic acid or nicotinamide and calcium carbonate must be added to bread flour, which, aside from calcium, are normally lost through the milling process. “There is no such legislation around the flour used for gluten free bread,” emphasises McGough.

She also says that the reason behind the cakey texture of gluten-free fresh bread is higher fat content because the mixture is more like a cake mixture than a bread mixture. “Hopefully soon food technology will develop and we won’t need all that fat in the mix to make a good end product,” says McGough.

McGough also acknowledges that gluten-free products have been flagged up as having higher levels of salt, sugar and fat but insists that should not be too much of a surprise. “When you look at the products that tend to have gluten, which include bread, cakes and biscuits, they tend to have high levels of those items, so it’s understandable that their gluten-free counterparts would have the same issues,” she says.

Manufacturers are working to reduce the difference in taste between their traditional and free-from counterparts. Roz Cuschieri, director of Genius Foods, admits that the quality of gluten-free products has “not been what it should have been”, and that the company is passionate about creating products that are “as good as” the mainstream offering.

Cuschieri highlights the challenges faced by manufacturers attempting to create the same taste and texture as their mainstream counterparts.

“The thing that I’ve learned since moving into the gluten-free market is that gluten plays such an important role in binding all of the raw materials together, and when that is gone, finding a way to bind the ingredients together is a big challenge. If you don’t get that right then you will end up with a texture to a product that you may not desire. So the texture and appearance is something that is very hard to get right,” she says.

Highlighting the scale of that challenge, Cuschieri says the company’s bread recipe took four years to develop. “Three ovens broke down trying to perfect it,” she reveals.

Genius Foods’ ambitions lie beyond bread and it has continued to work on NPD since the launch of its fresh bread range. In June, it introduced a line of “classic British dishes”. The range includes a peppered steak slice with gluten-free pastry and vegetables in a pepper sauce, sausage rolls made with British pork sausage meat wrapped in gluten-free pastry, and Genius Cornish slices.

According to Cuschieri, Genius Foods “invented” the fresh gluten-free bread category in the UK, which it launched in spring 2009. SymphonyIRI says that Genius leads the market, with its GBP2m in sales accounting for 62.5% of the market in the week ended 9 July.

However, while Genius has a strong lead over the competition, manufacturers and retailers are not sitting still.

Warburtons, for example, launched a range of five gluten and wheat-free free bakery products in January. According to SymphonyIRI data, sales for the week ended 9 July reached GBP236,557, giving it a 7.2% market share.

Competition is heating up. Own-label gluten-free bread sales accounted for some 19.3% of market share in the week ended 9 July but that is down on the 21.7% recorded in the same period of the previous year.

UK retailers, however, have been busy developing products. A Sainsbury’s spokesperson says its fresh bread range, which was also launched in January, is “selling well” and that there has been “a great deal of improvement” in the category for both private-label and brands in the last year.

The Co-operative Group, meanwhile, launched a range of free-from products in July. The range, which features staples such as pasta and English muffins, also features products like triple chocolate cookies.

The Co-op’s range strategy manager, Will Ingham, tells just-food that the retailer benchmarked its lines against the “best products in the market” and decided to launch products that would add the “most value to the range and to the Co-operative brand”.

“[The launch of the] free-from range is about recognising valuable customers’ needs,” Ingham says. “We want to build on our credibility in this market in the long term and evolve our offer to serve free from customers as best we can.”

While the company says it plans to continue to develop its private-label offer, and sees an opportunity for “further growth and innovation” in the bread category, it still has room for branded offers.

“Free-from brands still have the lion’s share of the free-from market and play a very important part in delivering a really broad offer for customers and a choice of products and price points,” Ingham says.

“Brands are also always evolving and bringing excellent new products to market, which we are always interested to see and the best examples will make it onto our shelves. Our own-label offer adds to the branded products, adding credence to the range and demonstrates our commitment to the free-from market.”

While both retailers and manufacturers see opportunity for growth in the free-from channel, there remain significant incremental opportunities in the packaged food sector. McGough suggests that manufacturers would do well to highlight the safety of ready meals and soups more often that have not been specifically developed for the gluten-free channel but which do not contain gluten.

For example, earlier this year, the Co-op reformulated the sausages and burgers in its Truly Irresistable range to be free from gluten and wheat.

“Things like ready meals and soups, where there are a number of ingredients and a coeliac might not necessarily be sure [but] where at a glance you can see a label that says they’re gluten-free so you can know that they’re ok,” says McGough.

“When there is a product with a number of ingredients, historically, flour might have been used as a stabiliser in these kinds of recipes, so it’s good to see this kind of development. So it’s not about creating new gluten-free products, but doing the necessary risk assessment, tests and quality controls to then be able to label them as gluten-free.”

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