Natural Foods Merchandiser

A Rash of Allergen-Free Foods

When Ken Hunt's wife was breast-feeding their baby, she ate innumerable peanut butter and jelly sandwiches, figuring they were loaded with nutrients she could pass on to her child. But she ended up passing on something else instead: Hunt's 3-year-old daughter has a life-threatening peanut allergy.

That's one of the reasons Hunt became chief executive of Anawah Inc., a Seattle-based molecular biology company that is developing reduced-allergy foods, including reduced-allergy peanuts.

"If my daughter would not have been exposed to peanuts as a baby, she might not have developed a peanut allergy," Hunt says. "We want to come up with foods that may prevent some allergies from even developing."

Anawah is one of a growing number of companies making or marketing allergen-free foods. Their target market is the 6 million Americans who have food allergies and the 30 million who have food intolerances, as estimated by the U.S. Centers for Disease Control and Prevention.

Allergies Vs. Intolerance
The Food Allergy Initiative, a New York City-based nonprofit that raises funds for allergy research, says allergies occur when the immune system reacts to a certain food. The body creates immunoglobulin E antibodies and releases histamines and other chemicals that can cause hives, asthma, and in severe cases, anaphylactic shock, heart failure, circulatory collapse and death. The FAI estimates 8 percent of U.S. children age 3 or younger have food allergies, along with 2 percent of the adult population.

The FAI says 90 percent of all food allergies are caused by eight foods:

  • Peanuts
  • Eggs
  • Milk
  • Shellfish
  • Wheat
  • Tree nuts (walnuts, cashews, etc.)
  • Soy
  • Fish

Unlike food allergies, food intolerance doesn't involve the immune system and generally causes less severe reactions. Gluten and lactose are two of the most common food ingredients that trigger intolerances. Lactose intolerance is the result of a missing enzyme that digests milk sugar. Symptoms include gassiness, bloating and abdominal pain.

Gluten intolerance causes celiac disease, which damages the digestive system and prevents proper absorption of nutrients. Gluten is found in wheat, rye and barley. According to a 2001 study published in Gynecologic and Obstetric Investigation, untreated celiac disease leads to decreased absorption of iron, folate and vitamin K, deficiencies that can result in depression, osteoporosis and anemia. Celiac disease is also associated with delayed menstruation, earlier menopause, infertility, higher miscarriage rates and lower birth rates. Though not scientifically proven, some believe gluten intolerance can adversely affect children with autism or attention deficit disorder.

The Celiac Sprue Association of Omaha, Neb., reports that one in 250 Americans has celiac disease, but only 10 percent have been diagnosed. Other studies, including one published in February in the Archives of Internal Medicine, suggest that one in 133 Americans suffers from celiac disease.

The accuracy of those numbers is a subject of debate. According to a March BBC News report, "Researchers suggest it has become fashionable to have the 'designer disorder' and that it is fashionable to have an intolerance or allergy."

But whether people are inventing food allergies or intolerances is a moot point in the marketplace. Self-diagnosed sufferers are snatching up foods designed to avoid allergies or intolerances, imaginary or not.

Mintel, an international research association, says sales of products "free from" problem items like dairy, gluten, wheat and nuts grew 165 percent between 2000 and 2002 in the United Kingdom. Mintel hasn't done a similar study for the United States.

I Don't Want My Wheaties
Cindy Kaplan, vice president of marketing for Enjoy Life Foods, a Chicago-based company that makes gluten-free cookies, bagels, snack bars and granola, believes gluten gluttony is passé.

"Eventually the bulk of the marketplace that is health-conscious will believe that overconsumption of wheat leads to health problems. Wheat is overprocessed. Without it, you can lose weight, feel better, and have less gastrointestinal distress, lethargy and sinus problems." Customers who eschew wheat and other glutens tend to be self-educated and under the care of a holistic health practitioner, she says.

Enjoy Life Foods in November 2002 began selling its products over the Internet and to retailers mainly in the Midwest and northeastern United States. Since then, sales have increased sevenfold, Kaplan says. The company's products, which don't contain dairy, casein, eggs, corn, soy or peanuts, also appeal to the allergen-free market. Kaplan says half of her company's customers who order products online have celiac disease, 25 percent have autism, 15 percent have wheat or gluten intolerance not classified as celiac disease, and 10 percent have other allergies or intolerances or are simply health-conscious.

Kaplan, who suffers from celiac disease, suggests retailers contact local celiac groups or food intolerance organizations and "give them the message that you've got food available for them that's safe." The people in these groups are retailers' dreams, she says. "I think [the food allergy and intolerance] market is a really easy market to target because they're easy to reach and, once they try the food, they're really loyal. People are so happy that you've got food available for them that they can trust."

At Rudi's Organic Bakery in Boulder, Colo., wheat-alternative products, including bread, tortillas and hamburger and hot dog buns made from spelt, are a fast-growing category. Rudi's spelt bread ranks ninth in sales out of 25 breads produced, says Victoria Smith, the company's vice president of sales. According to SPINS data, Rudi's spelt sales increased 99.6 percent in the last year, from $566,388 to $1.13 million.

Anawah is approaching the allergen market from a different angle. Rather than manufacture allergen-free foods, it is combining molecular biology and traditional plant breeding to develop nongenetically modified plants that have few or no allergens.

Eventually, Anawah wants to produce hypoallergenic peanuts, wheat, shellfish, tree nuts and soybeans that can be sold to food manufacturers, but for now the company is concentrating on peanuts. Through molecular biology programs, Anawah has identified two proteins that account for 80 percent of peanut allergies. The company has grown 10,000 to 30,000 peanut plants to screen for those proteins. A reduced-allergy peanut plant is still two to four years from market, Hunt says. "We can't eliminate all allergens in peanut plants, but we hope we can grow ones that are reduced in allergens. We're hoping that plant would become the new standard in the industry."

But Will Mikey Like It?
Other companies are tackling less far-reaching but more immediate issues: the dicey taste and texture associated with allergen-free foods.

Rudi's is revamping its spelt line to include less whole spelt and more white spelt flour, a change that Smith says makes the loaf larger and the bread lighter and fluffier. Rudi's also will use sponge dough, which ferments longer than regular dough and is more flavorful.

Enjoy Life Foods uses a sorghum flour base and xanthan gum (dried cell coating from microorganisms) to keep its bagels and cookies from crumbling. "Gluten is what holds things together in flour and makes it rise, so you have to replace that," Kaplan says. Fruit juice, applesauce and honey can be added to make the products moist and flavorful. Alternative grains such as amaranth, quinoa and flaxseed add omega-3 fatty acids and fiber that are difficult to get in a gluten-free diet, Kaplan says. The company's bagels and snack bars are fortified with folic acid, B vitamins, zinc, iron, magnesium and calcium.

"Most gluten-free foods are made from rice flour and thus lack fiber and other nutrients," she says.

Natural Foods Merchandiser volume XXIV/number 9/p. 60, 64, 66

Steep Start-Up Costs

Don't expect to see many new companies entering the allergen-free food market, because setting up operations is difficult and costly.

Enjoy Life Foods spent two years in product development and about $1 million in initial financing, says Vice President of Marketing Cindy Kaplan. It had to build a dedicated manufacturing facility with sterilized equipment so there would be no cross-contamination of potentially allergenic ingredients. "You can't outsource this type of manufacturing," Kaplan says.

Suppliers have to fill out forms stating that their food doesn't come into contact with allergens. Enjoy Life Foods also tests incoming ingredients to measure levels of gluten and casein, Kaplan says.

Rudi's Organic Bakery has a detailed operating procedure to make sure its wheat bread flours don't contaminate the spelt flour. "Typically our spelt breads are our first run of the day," says Vice President of Sales Victoria Smith.

Anawah Inc. is devoting an average of five years to development of each of its allergen-free products and employs 16 people in greenhouses, field operations, and research and development in two locations. It has raised $10 million in venture capital and won't have a product to market for at least two more years, says Chief Executive Ken Hunt.

Natural Foods Merchandiser volume XXIV/number 9/p. 64

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