Improving coeliac diagnosis rates and the increasing number of people becoming aware of the benefits of a gluten-free diet are driving growth in the sector in the UK. In part one of this month’s category crunch, Petah Marian uncovers the opportunities that remain in the sector.

Rising diagnosis rates of coeliac disease, combined with an increased awareness of the perceived benefits of a gluten-free diet, are driving growth in the free-from sector in the UK.

Euromonitor forecasts that the gluten-free sector will grow by almost 10% between 2011 and 2015 to become a channel worth GBP95.5m (US$155.2m) a year.

According to Norma McGough, head of diet & health at charity Coeliac UK, some 14,000 people are newly diagnosed each year, a number which she says was “assumed to be much lower”.

Statistics from Coeliac UK, one in 100 people have coeliac disease, while 2009 estimates from the National Institute for Clinical Excellence found that only 10-15% of that 1% are clinically diagnosed.

Celebrity endorsement has not hurt the channel either, with glossy magazines extolling how Gwyneth Paltrow, Victoria Beckham, Rafel Nadal and even Bill Clinton are enjoying the percieved benefits of such a lifestyle.

The growth seen by specialist manufacturers like Dr Schar and Genius Foods have encouraged mainstream manufacturers and retailers into the channel, with Warburtons and The Co-operative Group launching ranges this year, joining other established own-label brands from Sainsbury’s, Tesco and Asda.

While increased awareness is benefiting the industry, many people without coeliac disease, IBS or diagnosed wheat intolerances or sensitivities are jumping on the bandwagon under the auspices of improving their health. According to some, a gluten-free diet can benefit cholesterol levels, digestion and energy levels.

However, McGough says there is “no evidence” a gluten-free diet having a therapeutic effect for people that do not have coeliac disease or intolerance or sensitivity to wheat.

“Certainly there have always been diet fads and there will always be people who will want to try different diets. There may be that element in some cases. But sticking to a gluten-free diet is no mean feat in the longer term,” emphasises McGough.

She also suggests that perhaps those taking up a gluten-free diet for lifestyle purposes may undermine the seriousness of the illness.

Indeed, for specialist manufacturers the focus remains firmly fixed on servicing those who buy into the range in response to illness as they represent a “lifelong value”.

“They have to go on a gluten-free diet for life, to cope with their condition, so they will always be our core target market, says Emma Herring, Dr Schar retail brand manager. She adds that there is also an opportunity around consumers who have allergy and intolerance or gluten sensitivity. “That area is growing so much and represents good value for us.”

Bread and baked products take up the lion’s share of the channel, with some 78% of sales at GBP67.6m, according to Euromonitor data. However, other channels including baby food and pasta are also recording significant development, with Euromonitor predicting 92.5% and 672.3% growth for the channels respectively between 2005-2015.

Euromonitor predicts sales of gluten-free baby food will reach GBP15m this year, while gluten free pasta wll reach GBP4.3m.

According to Euromonitor data, HJ Heinz’s Farley’s brand takes up some 9.5% of the overall gluten-free market, while Dr Schar’s True Free and Dietary Specials take the second and third spaces with 9.1% and 7.5%, respectively.

Herring says the UK leads the way when compared to the other markets that Dr Schar operates in, which includes continental Europe and the US. “Our fixtures in the UK are much more developed and mature. We do have a lot more competitors that in Europe and the US,” she says.

Dr Schar is one of the few manufacturers to work across fresh, ambient and frozen. “In frozen we’re market leader,” says Herring, adding that there are few competitors in that category. The company is focusing its development on the frozen sector, and, following the acquisition of a cake factory in Spain, is likely to focus its efforts on that area. “In the past it’s not been our core area of competence, but now we’re able to look at that,” says Herring.

Part two can be found here.