As the gluten-free market grows and competition – from both specialists and interested conventional manufacturers – intensifies, innovation will be vital. The rate of product development is increasing – Mintel says one in ten products launched in the entire food sector last year was gluten free, up from 2% in 2005. However, as one industry watcher puts it, there is a lot of "spray and pray" to NPD in the category. What trends can manufacturers harness for success? What trends do they need to monitor? Dean Best reports.
Increased scrutiny on fat, salt and sugar
In the early days of the development of the gluten-free category, some manufacturers, in a bid to improve the taste of food without gluten, would turn to nutrients like salt and sugar.
However, with the growth of the market in a number of countries being buoyed by mainstream consumers, who do not have to avoid gluten for medical reasons, the nutrition content of some products is under the spotlight.
Hamish Renton, MD of free-from consultants HRA Marketing, believes gluten-free business need to act. "Skinny and free-from haven't yet happened in a meaningful way but the dirty little secret of free-from is quite often nutritionally it's worse than the conventional," Renton says. "Wee are really have to do something about that because that's eroding trust.
Renton says it can be "difficult" to improve the taste of gluten-free products without relying on ingredients like sugar but warns a lack of action will stymie the category's growth. "Over time, that will hold back the market," he says. "Those companies that are brave enough and smart enough to do sth about that will win over time."
Mrs Crimble, the largest gluten-free brand in the UK and second-largest in western Europe, has been one of the first to act. The cake and biscuit maker has launched Gluten Free… and Good For Me, a range of products targeting consumers wanting healthier gluten-free products. "We've recognised an opportunity to create a sub-brand so the gluten free consumer can make a more balanced diet choice," Gareth Toms, Mrs Crimble's international commercial director, says.
The closer examination of what is in gluten-free products is being seen throughout western Europe. Eva Sobrepere, marketing manager at Spanish gluten-free baker Proceli, among the top five gluten-free brands in the country, says the trend has had an impact on its product development. "Spanish consumers are starting to look at health, not only on gluten free but on all products. We are much more conscious about calories and sugar. The new products we are launching, we already took that into account."
Pasta an area of heightened activity
Bakery products made up just short of two-thirds of global gluten-free sales in 2014, according to Euromonitor. Measured by category, pasta, Euromonitor says, ranked joint second with baby food.
Pasta is a category that has seen a wealth of gluten-free options hit the market in recent years and the attractiveness of the sector was underlined when Italian giant Barilla launched its first free-from products in the US and Italy in 2013.
Renton says gluten-free pasta is the "fastest-growing sub-category" in Italy's gluten-free market, driven by a rise in the quality of products available. He also points to the product development work among manufacturers. "There's been a big trend in alternative grains – spelt, sprouted grains – giving the consumer some fibre and some taste options. And some interesting products in high-protein pasta as well," he says. "Who would have thought you would have got the stage where pasta is a functional food?"
Barilla now sells gluten-free pasta "in all the main EU countries" and is looking at rolling out some of the range into up-and-coming markets in eastern Europe.
And Renton, points to gluten-free pasta – alongside biscuits, crisp bread and bread – as categories where there is "growth to be had" in Norway.
Perhaps unsurprisingly, retailers are making moves to add pasta to their own-label gluten-free ranges. The Co-operative Group is among the retailers in the UK to carry private-label pasta.
The white space of meal solutions
From pasta to pizza – and food manufacturers operating in, or eyeing, gluten-free markets in Europe could see a significant opportunity in meals.
Euromonitor estimates 8% of global gluten-free sales were of ready meals in 2014 but the majority of sales – 77% – were generated in the US. The UK was a distant second at 10%, followed by Norway (9%) and Italy (2%). Those stats speak of the potential that could lie ahead in Europe if manufacturers get their offerings right.
In Norway last year, Orkla launched a gluten-free pizza under its Grandiosa line and a lasagne under its Toro brand. Stefan Anbro, a Euromonitor analyst covering the Nordic markets, says the entry of Grandiosa will drive the growth of the whole gluten-free category in the country and he expects other manufacturers to follow suit. "More launches can be expected," he says.
In Italy, another mainstream, conventional food manufacturer has seen meal soultions as a potential way to benefit from growing interest in gluten-free but the relative lack of options for shoppers. Dr Oetker has launched a frozen, stone-baked, gluten-free pizza, which Mintel says has run-up sales of EUR9m in its first two years.
As well as the mainstream giants, specialist players continue to be active. Dr Schar, with its namesake brand the largest in western Europe's gluten-free sector, has recently added to its range in France with a line of frozen "convenience products" including pizzas and lasagne.
And there is also some notable product development from smaller players. UK firm Rule of Crumb, a business not even a year old, is, alongside products like muffins and muesli, targeting meal solutions. The company, based in Northern Ireland, includes chicken kievs and fish fingers in its range. Founder Colum McLornan says Rule of Crumb has secured "good listings in Ireland, north and south" for the products and has met Ocado over a possible deal in England. The company, which uses a contract manufacturer in Northern Ireland, is also looking to start working with Whole Foods Market in the UK for products that use British free-range chicken.
Is fresh an opportunity?
Much of the activity around meals has been in the frozen aisle. But some industry watchers believe there could soon be development in chilled food, notwithstanding the challenges in producing gluten-free options with a shorter shelf-life.
"The fresh side is where the growth should be coming from," Trice says. "Tesco launched a few own-label products there a couple of years back and they didn't do particularly well. That's still the opportunity to crack It's very difficult because of the short shelf life [but] think of the mainstream consumer and how much fresh ready meals are used compared to frozen. In gluten free that's not happened yet. That's going to happen. Like we said, ten years ago, fresh bread will come and it's now everywhere in the UK. Fresh pasta meals and fresh pizzas etc will come and will give a fresh impetus to the market.
The challenge of local tastes
That local tastes is a key factor for NPD strategists to consider is nothing new in food and it is an important consideration in gluten free, manufacturers and analysts emphasise.
And it is a challenge in the largest segment in gluten-free – bakery. "Each country has of course a different bread-eating culture, whereas gluten free up until recently tends to be a one-size-fits-all approach – long-life bread, produced in one factory and sold throughout Europe. The trend for me that's happening – which we've noticed with sliced white bread – is that locally bread starts to mirror the mainstream bakery market in the country, rather than a pan-European, one-size-fits-all approach," Trice says. "In Italy, long-life, gluten free ciabatta rolls are extremely popular because it's a well-known product and everybody knows how to use it in Italy. You would assume if someone can crack a good quality gluten free baguette than France is going to be a major market for that. That's where at the moment the size of the market up until recently hasn't been big enough in each country to for manufacturers to develop specific products for each country. That has to come as the market grows and as perhaps smaller, more niche brands come into the market."
Spanish gluten-free manufacturer Proceli sells into countries including France and Italy and, at present, has not changed its recipes for those markets. But Sobrepere says the company would have to consider tweaks if it looked at other markets. "We will have to think about doing that, especially if we want to increase or enter into the UK market because the UK market is completely different in terms of taste," she says. "In the UK market – where we are selling but only through the prescription channel – they like much more strong and fruity tastes. Spain is more chocolatey or plain, so definitely we will have to think about it if we want to make the jump into some markets."
The rise of private label
Brand owners mulling a launch into gluten free, or expanding existing ranges, need to be aware of the interest in the category of retailers in European markets.
Manufacturers need the support of their customers to build a category like gluten free – and, for obvious reasons, riising interest from consumers appeals to retailers operating in low-growth markets.
In the UK, as the major supermarket chains have – to varying degrees – expanding their gluten-free fixtures, they have also looked at developing their own-label ranges, which, some say, is putting pressure on brands.
Bob Trice, the former MD of Dr Schär's UK arm and now a gluten-free food industry consultant, says private label "has been a significant factor" outside the UK but points to one market where own label has been a factor in category growth. "A couple of years ago in Germany some of the big retailers decided to look at gluten-free ranges and actually went into it in a quite a big way, so that's changed the market dynamic somewhat but has also led to quite substantial expansion. Rewe has developed quite a wide range of private label and has expanded its shelf space quite rapidly as well."
In France, a market where gluten free is picking up a head of steam, Trice says some of the big retailers "have started to get involved in private label" but adds: "I don't see it being very, very successful yet." Dr Schar, the largest gluten-free manufacturer in the country, says retailers have at present only made limited inroads into the category. "So far the quality of private labels is good," Lorenzo Iannis, sales manager for Dr Schar's French arm, tells just-food. "Private labels play mainly in bread/flour/biscuit arena so far."
The just-food briefing on the gluten-free sector in Europe also provides a run-down of the major markets in the region.