Global Trends & Opportunities in
Free-From Foods
David Jago, Director of Innovation & Insight, June 2013
© 2013 Mintel Group Ltd. All Rights Reserved. Confidential to Mintel
1
mintel.com
Agenda
FREEFROM FOODS WORLDWIDE
• What is happening in the UK versus the US
• The development of the global free from market
• What does global launch activity tell us about the lifecycle of the
sector
• What is the experience of major players getting into free from
• Is the market maturing or is there more opportunity for growth
2
mintel.com
UK free-from market growth will slow but is still impressive
UK retail sales of free-from foods, 2006-16
+71%
+109%
Dairy/
lactose free
47%
Gluten free
45%
Other
8%
3
Source: Mintel Oxygen
mintel.com
Consumer: significant purchase levels
Types of free-from foods purchased (in last six months), UK, June 2012
4
Source: GMI/Mintel
mintel.com
Lifestyle choices as important as allergy/intolerance in avoidance
Foods/ingredients avoided, UK, June 2012
5
Source: GMI/Mintel
mintel.com
Wider range in demand
Attitude towards free from foods, UK, June 2012
6
Source: GMI/Mintel
mintel.com
UK vs. US – growth similar, market definitions affect actual sizing
UK gluten free sales
US gluten free sales
(not including mainstream products labelled gluten-free
but which did not contain gluten in the first instance)
(all products labelled gluten-free)
+30%
7
+27%
Source: Mintel Oxygen
mintel.com
‘Gluten sensitivity’ & ‘health’ perception drives the US market
40 million people is the current or potential gluten-free audience in the US
• 14% of adults are
potential or current
users of GF food,
either from need or
want
• Roughly 10% are
current users, at least
occasionally
• Equates to more than
30m Americans who
are current GF food
users, and up to 40m
who are a potential
market
8
Base: 3,000 internet users aged 18+
Source: Mintel Oxygen
mintel.com
US market growth fuelled by salty snacks
US sales of select leading gluten-free food segments, 2009-11
• Consumer
desire for
healthy
snacks helped
segment
growth
0
100
$million
200
300
400
500
Chips, pretzels, and snacks
Cold cereal
Frozen lunch and dinner entrées
Baking mixes, supplies, and flours
Energy bars and gels
• Bread &
baked goods,
along with
energy bars &
salty snacks
drove sector
growth overall
Bread and baked goods
Crackers and crispbreads
Cookies and snack bars
Shelf-stable pastas
Beans, grains, and rice
2009*
9
SNACKS
Entrées and mixes
2010*
2011*
* 52 weeks ending Oct. 31, 2009, Oct. 30, 2010, and Oct. 29, 2011
Sales in FDMx, natural, and specialty markets only. Source: Mintel/SPINS/Nielsen
mintel.com
NPD in gluten-free continues to show an upward trend
New product introductions of gluten-free food & drink, globally, 2009-2012
3500
Other
3000
2500
Fish, Meat & Egg
Products
2000
Bakery
1500
Dairy
1000
Snacks
500
Sauces & Seasonings
10
Q4 - 2012
Q3 - 2012
Q2 - 2012
Q1 - 2012
Q4 - 2011
Q3 - 2011
Q2 - 2011
Q1 - 2011
Q4 - 2010
Q3 - 2010
Q2 - 2010
Q1 - 2010
Q4 - 2009
Q3 - 2009
Q2 - 2009
Q1 - 2009
0
Sauces, Snacks, Dairy
& Bakery account for
around 45%
mintel.com
UK is one of the leaders in gluten-free NPD, but US dominance is clear
New product introductions of gluten-free food & drink, 2010-12 (% share)
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Source: Mintel GNPD
mintel.com
GF variants take an increasing share in NPD of cereal-based products
Gluten-free penetration in launches of cereal-based products, 2009-2012
12%
Cereal-based Snacks
10%
Bakery
Breakfast cereals
8%
Pasta
6%
Pizza & Prepared
Meals
Beer
4%
2%
0%
2009
12
2010
2011
2012
Certainly more potential
in pizza/prepared meals,
& beer
Source: Mintel GNPD
mintel.com
Big brands get on-board
General Mills in the US has identified gluten-free as a “significant
incremental opportunity” & has its own “community” consumer
website promoting its ranges (GlutenFreely.com)
Warburtons Gluten
Free (UK, 2010)
13
General Mills Cinnamon
Chex Oven Toasted Rice &
Corn Cereal (USA, 2012)
Kellogg’s brown rice Rice
Krispies (US, 2011)
Sales in first year: $5m
Source: Mintel GNPD
mintel.com
Specialists expand
Genius, a £10m gluten-free bread brand, for example, has
expanded to more varied bread types, pies/pastries, pizzas, and
cakes in the UK (and is also expanding internationally)
Genius Gluten Free
Tomato & Herb Pitta
Bread (UK, 2012)
14
Amy’s Kitchen US
company now
producing in the UK
(UK, 2012)
Dr Schär (2012)
Expanding
internationally
Source: Mintel GNPD
mintel.com
Leveraging the appeal of ancient grains and seeds
The buzz around ancient grains & seeds has grown (especially
chia) as they offer health benefits & a way to provide
differentiation, as well as being gluten-free
with sunflower seeds,
millet, linseed, quinoa
& poppy seeds
made with quinoa, chia
and millet
Waitrose Love Life
Free From... Seeded
Thick Sliced Loaf (UK,
2012)
Two Degrees
Chocolate Banana Bar
(US, 2012)
15
Kez's Free Cranberry
Choc Crisp with Chia
(Australia, 2012)
Source: Mintel GNPD
mintel.com
The opportunity in beer
Gluten free beers are growing in number
• Among UK beer drinkers, 34%
agree that they would drink
gluten-free beers if they
tasted as good as standard
varieties while another 43%
neither agree nor disagree (e.g.
only just over 20% disagree)
St Peter’s GlutenFree Beer, UK
16
Green’s GlutenFree Beer, USA
• Brands such as Green’s (in the
UK, Europe & North America)
are not just targeting coeliacs –
as the brewer does not use
gelatine-based products or
Isinglass in the production
process, the products are also
suitable for vegetarians /vegans
mintel.com
Naturalness important for gluten-free products
Claims made by gluten-free product launches, 2009-2012
35%
30%
25%
20%
15%
2009
10%
2010
5%
2012
2011
0%
17
Source: Mintel GNPD
mintel.com
Gluten-free using naturalness to aim to a wider audience
Doves Farm Organic Gluten Free
Stem Ginger Cookies (UK, 2012)
Nature's Path Organic Crispy Rice
Bars (UK, 2012)
made using artisan methods,
organic, fairtrade, GMO free, free
from additives & hydrogenated fat
made using organic honey, good
source of fibre, suitable for
vegetarians, perfect on the go &
contains no artificial additives
18
Source: Mintel GNPD
mintel.com
NPD in lactose-free recovers from a first half 2010 dip
New product introductions of lactose-free and lactose-reduced foods by major
category, globally, 2009-2012
800
Other
700
Snacks
600
Desserts & Ice Cream
500
400
Bakery
300
200
Fish, Meat & Egg
Products
100
Dairy
19
Source: Mintel GNPD
Q4 - 2012
Q3 - 2012
Q2 - 2012
Q1 - 2012
Q4 - 2011
Q3 - 2011
Q2 - 2011
Q1 - 2011
Q4 - 2010
Q3 - 2010
Q2 - 2010
Q1 - 2010
Q4 - 2009
Q3 - 2009
Q2 - 2009
Q1 - 2009
0
Dairy accounts for
around 40%
Bakery & snacks a
growth area
mintel.com
UK a smaller player in lactose-free NPD
New product introductions of lactose-free and lactose-reduced food & drink,
2010-12 (% share)
Source: Mintel GNPD
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mintel.com
In Finland, lactose-free is in mainstream use across categories
Valio Lactose Free Milk
(2012)
Laktoositon Oma
Lactose Free
Raspberry Ice Cream
(Nestlé, 2012)
Arla Ingmariini
Lactose Free Fat Blend
Spread (2012)
Source: Mintel GNPD
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mintel.com
In Germany, specialist player Omira has a strong position with MinusL
Lactose-free chocolate
(2012)
Gluten & lactose free
bread (2012)
Lactose free stuffed
green peppers (2012)
Source: Mintel GNPD
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mintel.com
In the UK, Arla’s Lactofree moves into ice cream
“all the taste but none of the lactose of real
dairy”
Lactofree milk sales grew 36% in 2011 to over
£16m
Extended to hard & soft cheese, cream, yogurt,
spreads
In 2012 moved into dairy ice cream
The most successful
lactose-free brand to date in
the UK is non-dairy soyabased Swedish Glace
(Fayrefield Foods) with sales
of £4m in 2010 having
grown 60% since 2008
UK, 2012
Source: Mintel GNPD
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mintel.com
Lactose-free is of comparable size to gluten-free in the UK
UK dairy/lactose-free market value, 2009-2011
• Since lactose
intolerance is more
widespread than
coeliac disease or
gluten intolerance, the
category should – by
rights – be
correspondingly larger
• Unlike gluten-free,
lactose-free appears to
be unable to garner
the wider appeal
beyond those with a
medically-diagnosed
condition
Source: Mintel Oxygen
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mintel.com
Lactose-free dairy no longer just about soy
US almond milk
sales +74% in
2011
WhiteWave Foods,
the maker of top soy
milk brand Silk,
introduced brand
extension Silk Pure
Almond, whose sales
grew 66% to $86m
Chilled formats drive
growth - Blue
Diamond Growers
chilled almond milk
grew 56% to $96m
(its ambient line 4%
to $28m)
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Almond milk – moves from the US to the UK
Almond milk is challenging
the established soy milk
category with Silk & Blue
Diamond top brands
Alpro’s almond milk,
launched in 2012, sold
£1.6m in its first year
Tesco has also entered &
so has Almond Breeze
from the US!
Source: Mintel GNPD
mintel.com
US yogurt companies are hoping lactose-free is the next Greek yogurt
Yoplait Lactose Free
(US, 2012)
Sales of $8.7m in first
year
26
Almond Dream Plain
Non Dairy Yogurt (US,
2012)
Kroger Plain Greek
lactose reduced yogurt
(US, 2012)
Source: Mintel GNPD
mintel.com
Coconut milk rises on the back of popularity of coconut water in the US
So far coconut milk has not matched the growth of almond milk
but reflects the growing number of non-dairy alternatives that
offers variety to both cow’s milk users and non-users
Silk PureCoconut
Original Coconut Milk
(US, 2012)
27
Kara Dairy Free Original +
Calcium Milk Alternative
(Finland – also available
in the UK)
Trader Joe's Original
Unsweetened Coconut
Milk (US, 2012)
Source: Mintel GNPD
mintel.com
Ethical claims see growing use in lactose-free products
Claims made by lactose-free product launches, 2009-2012
60%
50%
40%
30%
20%
2009
10%
2010
0%
2011
2012
Source: Mintel GNPD
28
mintel.com
Lactose free brands embrace ethical claim trends
Moo Free (Finland, 2012)
(note actually a UK brand)
Mini Moos Scrummy Hunny-Comb
Bars are an alternative to milk
chocolate & are Fairtrade & Organic
29
Naturata White Chocolate
(Finland, 2012)
Rice Milk with Chocolate Chips and
Sour Cherries. This lactose-free,
organic chocolate is climate neutral,
& fair trade certified
Source: Mintel GNPD
mintel.com
We do not believe free-from to be a fad
Increase in
consumer
base
Better
diagnosis will
increase
numbers of
consumers
who require
such products
While the
‘celebrity diet’
aspect may
fade, the
number of
consumers
looking for free
from products
for general
health
purposes is
likely to
increase
Young adults
are most
aware of
intolerances/
sensitivities,
meaning a
longer lifespan
for trend
Source: Mintel
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mintel.com
We do not believe free-from to be a fad
More &
better
ranges
Many major
players yet
to enter –
more will
come in to
spur NPD on
further
Further
development
in quality &
overcoming
taste issues
will reduce
barriers to
purchase
Continued
growth
should allow
a reduction
in price
differential,
also reducing
barriers to
purchase
More
products will
be positioned
‘for
everyone’
and just
happen to be
gluten-free
Source: Mintel
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mintel.com
We do not believe free-from to be a fad
Harnessing
other
trends
Technology – access anything anywhere
The free from community is highly active online
offering scope for brands to better connect with
them, social media & apps give consumers the
power to seek out free from solutions
Healthy, natural, sustainable
Free from foods have an opportunity to
promote a strong over-lap with healthy eating,
“natural” & environmentally friendly trends
which ensures they can maintain multi-layered
appeal
Source: Mintel
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mintel.com
David Jago
Director of Innovation & Insight
Tel
Email
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+44 20 7606 4533
djago@mintel.com
@mintelnews
© 2013 Mintel Group Ltd. All Rights Reserved. Confidential to Mintel
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