Natural Foods Merchandiser

Sales for gluten-free goods continue to rise

When gluten-free foods exploded onto the naturals scene a few years ago, some pundits predicted it wouldn’t be long before they joined their low-carbohydrate cousins in the land of food obscurity. But quite the opposite has happened. The gluten-free trend shows not just staying power, but double-digit growth in the midst of a recession.

According to SPINS, a Schaumburg, Ill.-based market research firm, GF foods posted more than $1.2 billion in sales in 2009, with 13.9 percent growth in the naturals channel and 11.4 percent in conventional stores, proving they’re more than a fad. “For people who depend on these foods, it’s like a diabetic with their insulin,” says Joseph “Roc” Rockaitis, owner of Gluten Free Store U.S.A. in Northbrook, Ill.

Experts indicate that people with celiac disease—an autoimmune condition in which the gluten protein damages the small intestine—are still the primary customers for GF foods. “That’s our core consumer and that’s who we market to,” says Laura Kuykendall, senior marketing manager for Glutino Food Group, a Quebec-based manufacturer of gluten-free foods. Dan Kohler, creator and host of RenegadeKitchen.com, a website that provides recipes and videos for the GF and dairy-free lifestyle, agrees. “About 50 percent of my traffic comes from the National Foundation for Celiac Awareness,” he says.

But other groups are also turning to GF foods to ease health issues. According to Debbie Sipos, owner of Simply Gluten Free, a specialty grocer in Thousand Oaks, Calif., “gluten causes an inflammatory response in the body for a large percentage of the population. Our customers who have lupus, fibromyalgia or any kind of inflammatory issues tell us that when they remove gluten from their diet, they find their condition a lot easier to manage.” Consumers also experiment with GF foods to find relief from other autoimmune disorders, as well as autism, asthma and attention-deficit hyperactivity disorder.

Taste of change
Not only has the market for GF food evolved, so has the taste. “I think manufacturers are taking more time and effort to really listen to the consumer, and they’re working very hard to change the way they produce
gluten-free products,” Sipos says. “They’re more shelf stable, their taste is better, they’re more mainstream.” Kuykendall says from her company’s standpoint, “research and development is a big focus. We’re always looking at different types of wheat substitutes and ways to enhance recipes.”

Consumers’ and retailers’ biggest wish is that some of that R&D would be applied to pastries. “A survey a few years ago shows that what people desperately want the most is baked goods, and what they’re most dissatisfied with is baked goods,” Sipos says. Glutino is working on that. “Look for more innovation in the snack and cookie area,” Kuykendall hints.

But Sipos already sees hope: The new individual-sized cheesecakes from Ukiah, Calif.-based GF food pioneer Pamela’s Products “are fabulous … they have blown out of here,” she says. Bread from Denver-based Udi’s Gluten Free Foods is her other big mover, selling 200 loaves a week.

Snacks, frozen meals and baking mixes are the hottest products in Glutino’s lineup of more than 80 SKUs, with pretzels leading the charge, Kuykendall says. “People with celiac disease just want to feel normal and enjoy the same products that people without celiac disease enjoy.”

Destination marketing
That doesn’t mean, however, that retailers shouldn’t create special sections for GF products. “I think that having a gluten-free section now shows the retailer’s commitment to the category and helps consumers seeking them out,” says Bob Burke, owner of Natural Products Consulting in Andover, Mass. “I can see a door or two in the freezer aisle and a section in grocery,” he says. “In some ways, this may be analogous to how natural products are often merchandised in mainstream supermarkets, with a store-within-a-store format, and as the category develops they are becoming more integrated—just as gluten-free products are likely to do in the near future.”

Laurie Budgar is a Longmont, Colo.-based freelance writer who cheered the advent of gluten-free beer.

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