Gluten-free to roam

by Jeff Gelski
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Gluten-free products are starting to feel adventurous. The products once held down space at the supermarket retail level. Now, they are roaming into different sectors, appearing more often on restaurant menus and even in retail discount stores. A large number of consumers continue to buy gluten-free products because they believe the products to be healthier, although questions surround any potential health benefits for people without celiac disease or gluten sensitivity.

Dallas-based Aldi, certainly not a direct competitor to upscale chain Whole Foods Market, this year launched a LiveGfree gluten-free line of snacks, bread and baking mixes. Aldi has 1,300 stores in 32 states.

In food service, gluten-free cuisine ranked fifth among the top 20 trends in the “What’s Hot in 2014” survey presented by the National Restaurant Association, Washington. The N.R.A. recently gave a Food and Beverage Innovation Award to a gluten-free deep dish pizza from Kiki’s Gluten-Free Foods, Arlington Heights, Ill. Kiki’s also offers KikiPockets (hand-held pies with sweet and savory fillings) and KikiCakes. A son of Kiki Michalakos, company founder, was diagnosed with celiac disease at age 4 and must avoid gluten.

Retail sales of two gluten-free brands continue to increase for Boulder Brands, Inc., Paramus, N.J. Udi’s net sales in the first quarter grew 37% year over year, said Steve Hughes, chairman and chief executive officer of Boulder Brands, in a May 8 earnings call. For the Glutino’s brand, net sales grew 14%. Udi’s bread should roam into the ambient bakery section at the retail level this year while maintaining a place in the frozen foods section.

“Today, most gluten-free breads are sold in the freezer,” Mr. Hughes said. “However, certain accounts have begun to hit velocities that warrant selling the products at room temperature on racks in the bakery section.”

Two 12-inch pizzas under the Udi’s brand should launch this year.

“We continue to drive our gluten-free portfolio by gaining distribution, increasing our velocities and, most importantly, driving household penetration off a relatively low base,” Mr. Hughes said. “We ended Q1 with an average of 21.1 items, gluten-free items in the conventional grocery channel, and our objective to end the year, is to end the year at 25 items on average.

“In food service, we expect to build off a relatively small base as we gain distribution in both large and small food service formats and distributors. Currently, TGI Fridays and Smashburger are expanding our hamburger buns chain-wide.”

A recent report from The NPD Group, Inc., Port Washington, N.Y., investigated why people buy gluten-free products. About 11% of U.S. households have someone who follows a gluten-free diet, but the reason for doing so varies, according to the report “Understanding the Gluten-Free Trend.”

Only 25% of those people living in a gluten-free household gave celiac disease or gluten sensitivity as the main reason to choose gluten-free products. Other reasons cited were they believe the diet improves digestive health and eliminates toxins from the body.

“There is clearly a segment of the population who avoids gluten for reasons other than gluten sensitivity or disease, providing a greater opportunity for food manufacturers and retailers,” said Darren Seifer, food and beverage industry analyst for The NPD Group. “Food marketers should pay close attention to all of the reasons for a gluten-free diet and connect the reasons with appropriate messages in order to better target your audiences.”

The study involved adult members of NPD’s on-line consumer panel. Respondents were asked an open-ended question about the benefits and downsides of gluten-free foods and beverages.

The most cited benefits for gluten-free products were general healthfulness and the fact people with gluten sensitivities may eat them. The most cited downsides were the high costs of the products and their taste, which was not perceived to be as good as their counterparts that contain gluten.

“Careful consideration of pricing compared to alternatives that contain gluten will be of particular importance to the success of most gluten-free products, especially in the current economy,” Mr. Seifer said. “Continued improvement of the taste of gluten-free products will also be important in order to keep consumers purchasing in the gluten-free space.”

People associating gluten-free diets with health benefits potentially may have a negative consequence, according to the National Foundation for Celiac Awareness, Ambler, Pa.

“The gluten-free boom has been so enthusiastically embraced by dieters, restaurants and marketers that there’s casual application of ‘gluten-free,’ which can have serious medical consequences for people with celiac disease,” said Alice Bast, president and c.e.o. of the foundation. “Currently, celiac disease is the untold element in the gluten-free story, and we need it inserted back, and featured prominently, in the conversation.

“Otherwise, we’ll continue to be challenged with a tragically low diagnosis rate at a huge cost to families and our health care system overall.”

During “Celiac Awareness Month” in May the foundation educated the public about gluten-free diets and celiac disease, including how healthy such a diet may be.

“Though some gluten-free options are healthful, eliminating gluten when people do not have a medical necessity for doing so is unwarranted,” the foundation said.
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