Mrs Crimble's was one of the clutch of brands Tesco listed when it set up a dedicated free-from fixture in the UK a decade go, a move seen as key to the early development of the category in the country. With gluten free now a crowded market, how can Mrs Crimble's continue to grow? Dean Best met with Gareth Toms, the company's international commercial director, to discuss its plans.
Mrs Crimble's is already a well established business. With its macaroons, the dedicated gluten-free company has the eight biggest-selling line in the mainstream UK cake category. Its business outside the UK takes in markets in Ireland, the Middle East and North America, accounting for 18% of the company's annual sales. (Mrs Crimble's declines to provide specific numbers for annual sales and profits).
But with competition in gluten-free intensifying, how is Mrs Crimble's looking to continue its growth? Speaking to Gareth Toms, the company's international commercial director, it seems the business has three avenues in mind: health, foodservice and new export markets.
Increased diagnosis coeliac disease and the rise in the numbers adjudged to sensitive to gluten have been two factors in the recent development of the gluten-free category in the UK, which saw sales jump over 80% between 2009 and 2014. However, the growth in the number of mainstream consumers including gluten-free products in their diet – largely because there is a perception the foods have a general health benefit – has propelled the category.
That, however, is a double-edged sword. More consumers means more attention and there has been increased scrutiny of the ingredients of gluten-free products. To improve the taste of gluten-free lines, manufacturers have often added fat, salt and sugar – it was, in the words of one market watcher, the industry's "dirty little secret". Now, more and more manufacturers and brand-owners are waking up to the fact consumers are starting to question the health credentials of gluten-free.
Mrs Crimble's, with its range of biscuits and cakes, could at first glance look to be ill-equipped to meet this demand. While Mrs Crimble's is standing firm behind its core range – and why would it not, with the inroads its flagship macaroons have made into UK cake – the company has reacted.
Earlier this year, the business launched Gluten Free and Good For Me, a sub-range initially containing pasta lines and cereal bars but with products on the horizon. "We've recognised an opportunity to create a sub-brand so the gluten free consumer can make a more balanced diet choice," Toms tells just-food. The launch of the range is, he adds, a way of gaining an edge in what is becoming a crowded market. "You've got a plethora of, not just brands, but individual products dotted around the fixture and we just see there being an opportunity to give the consumer a bit more choice."
While Mrs Crimble's is looking to expand the new range over the next six to 18 months, could the business at the same time look to do some reformulation work on its core range? Toms is cautious. "You've got to be careful haven't you. Our core product – and the product we're best known for – is the macaroons. That's the eighth best-selling cake product in the UK, never mind being a gluten free product and it's number one in convenience. It's dangerous to start tinkering with a product like that because it's obviously found its place in the market and there are a lot of consumers that are buying that product," he says. "If we were to do a reduced-sugar version or a lower-calorie count version, we've got to be absolutely, 100% certain that's going to be incremental to the core brand. What you don't want to do is cannibalise existing sales by bringing in another product and the net effect you haven't grown the business."
The UK grocery market has, in recent years, been a challenging place to try to grow. Gluten free has been one of the categories that has stood out but have the recent travails at the likes of Tesco and Morrisons – challenges the retailers have sought to solve in part by reviewing their product ranges – had an impact on the sector?
Toms insists Mrs Crimble's tries to be (proactive) in monitoring the performance of its products and managing its range. "We like to think we are relatively proactive in terms of recognising it ahead of any range reviews, so looking to, if you like, maintain our space but switching products in and out," he says.
However, Toms has a note of caution for those operating in – or eyeing – the UK gluten-free market. "I think the growth of the gluten free category from a space perspective is probably close to topping out," he says. "It's down to the retailers to better category manage that space and make sure they've got the right sets of products in there and maximise consumer choice. They are, however, also still very driven on developing their own-label lines. In some respects that does put pressure on the brands because there's only so much space to play with but I think that for the more established brands – one of which we certainly consider ourselves to be – we are still a signpost to that category for the consumer."
With competition in the UK grocery retail intensifying, the country's foodservice sector could present an opportunity for growth. Data is hard to come by; Coeliac UK says the gluten-free category is estimated to be worth GBP100m in the foodservice channel, although some industry watchers believe that may be a little high.
Foodservice consultancy Horizons does not provide data on gluten-free sales in the channel but insists there are a number of indicators that show the market in the UK is growing. It says the number of chains with gluten-free options on the menu is on the rise. As a packaged snacks business, Mrs Crimble's will be looking at other options in the channel.
"A lot of it is obviously the individually-wrapped range," Toms says. "You're targeting business and industry, workplace opportunities, coffee shops, that type of thing. At the end of this 12 months, we'd have doubled the number of customers that we have in that foods sector. It helps you are a gluten free brand with mainstream credentials. What we pride ourselves on is all our products is firstly they taste great – and by the way they are gluten free. That fits perfectly into foods because foods operators don't want to have a standard range and a whole gluten free range. What they'd like is products that can fit both."
Toms hints at a bid to further expand through new product development. "Certainly some of the new products we are going to launch over the next 12 months will have a foodservice angle in terms of whether it's meal solutions or dessert offerings, that sort of thing."
UK foodservice accounts for about 8% of Mrs Crimble's annual sales. Its business outside the UK generates 18% of its revenue. As the UK gluten-free market has become more developed and competitive, it could have given added impetus Mrs Crimble's international efforts.
Toms insists instead Mrs Crimble's "position in the UK definitely enables international distribution because you've got a great back-story" adding: "If you can say you're the eighth biggest-selling cake line when you're in the States or Canada or Australia, it's got relevance because people are aware of the UK market and the retailers who exist. It definitely has helped. The international opportunity is a natural progression for a company like ourselves."
Toms says Mrs Crimble's first entered Ireland, then the Middle East and then North America, all markets that are "performing very well". The brand has secured listings with Albert Heijn, the largest retailer in the Netherlands and, by September, will be sold in "a couple of major retailers in France", he adds. Mrs Crimble's has also appointed a distributor in Germany.
There are similar factors driving the gluten-free categories on mainland Europe, Toms says, but he believes brands on the continent are not as well developed as in the UK. "What you need is a brand that's engaging. There's still a lot of brands in western Europe that look almost as if they belong in a pharmacy as much as a supermarket. Having a more consumer-friendly, engaging brand image, is important to getting that distribution. We're not just a functional brand. We're a consumer brand."
Mrs Crimble's international ambitions – it wants international markets to account for up to a quarter of sales in three years' time – also lie further afield. "Our core focus remains North America, Europe," he says before adding: "In the Far East, we're not far off getting some business going in China. Central America, we've got some distribution going in there. We've just launched into Uruguay with a range of products and we'll probably be looking at Chile and Peru within the next six months."