Source: Mintel
Globally, demand for free-from foods is on the rise. In the UK alone, the free-from market experienced 90% growth in value sales to an estimated £342 million over the 2007 to 2012 period.
During this time, the market benefited from increased awareness and diagnosis among allergy sufferers, a surge in specialist brands and private label players, an increase in merchandising space in-store, and endorsement from celebrities as far and wide as Bill Clinton, Kim Kardashian, and Andy Murray. By 2017, sales in the UK free-from market are expected to rise by over 64%, while in real terms, with the effects of inflation removed, the market is expected to see a 28% jump.
Most common claims
According to Mintel GNPD, gluten-free and lactose-free are the most popular claims used on free-from products, in addition to the more generic low/no/reduced allergen claim. Products displaying these claims are designed to accommodate the needs of allergy sufferers and intolerant consumers. Symptoms of a food intolerance can take a while to surface and are typically less severe than an allergic reaction. A food allergy is a rapid and potentially serious immunological reaction, as the immune system mistakes something in food as harmful and attacks it. Consequently, the food must be avoided altogether as allergic reactions are not always dose dependent, and the smallest amount can cause a serious reaction. Although estimates suggest that only around 1% of the population suffer from celiac disease, and thus suffer from an adverse reaction to gluten, gluten-free is one of the fastest growing sectors in the food industry. Levels of lactose intolerance, on the other hand, vary by geography and ethnicity, and while in some Asian and African countries this can be as high as 80-90%, in Europe and North America levels are generally thought to be around 5-10%. The appeal of free-from foods extends beyond consumers with allergies and intolerances however, with lifestyle and health factors encouraging increasingly health conscious consumers to buy into the market. A growing number of consumers are also self-diagnosing these conditions, which is contributing to increased interest in the market.
Beyond the retail sector
While much of the activity around free-from foods is in the retail sector, as specialist brands and private label look to accommodate the daily needs of consumers needing to or looking to follow a free-from diet, the growing demand for free-from food has also led to developments in the hospitality industry. Pizza Express in the UK, for example, has added a range of gluten-free dishes to their menu, along with a gluten-free classic pizza base so that nearly all of its pizza recipes can be enjoyed gluten-free. To gain consumer trust and build confidence, the restaurant chain has also changed labeling and storage processes, introduced new equipment that is used only for gluten-free food, and, most significantly, changed the flour used for tossing and stretching dough to gluten-free flour, to avoid cross contamination. These steps have resulted in Pizza Express being awarded gluten-free accreditation by Coeliac UK, a leading charity working for people with celiac disease. The development of a gluten-free pizza base is also something that the brand could look to extend to retail, where it already offers a selection of its most popular pizzas in the chilled section of supermarkets.
Europe is the leading region
Europe is the leading region in terms of free-from new product development activity, accounting for 37% of product launches featuring gluten-free and/or low/no/reduced lactose claims between 2008 and 2012, peaking at 41% of launches in 2012. The number of products launched in Europe increased by 112% between 2008 and 2012. Within Europe, the UK, Spain, and Germany lead the way with gluten-free claims, accounting for 55% of new product launches featuring gluten-free claims between 2008 and 2012. Germany and Finland dominate in terms of use of low/no/reduced lactose claims, accounting for almost half of all product launches in the same time period. Finland ranks highly due to high levels of lactose intolerance amongst the country’s population. The estimated percentage of Europeans that suffer from a clinically proven food allergy is 1-5% of the total population. However, studies suggest that a much higher range of 3-38% of the population report having a food allergy, demonstrating confusion between food intolerances and allergies, and highlighting the higher than expected number of consumers seeking free-from products.
European producers need to better manage labeling
Given there is no cure for food allergies, labeling and communication of allergy risks to consumers is vital. Under European labeling laws, food manufacturers must declare 14 allergens on product labels regardless of the amount present in the finished product. These include: peanuts, tree nuts, soybeans, mustard, fish, cereals containing gluten, sesame, celery, eggs, lupin, milk, sulfur dioxide, mollusks and crustaceans. In regards to precautionary labeling, when trace amounts of an allergen may end up in the final product formulation due to cross contamination, current labeling laws are less clear. Rather than helping allergic consumers select food products, some labeling such as ‘may contain’ further restricts their available food choices. This is reflected by over six in 10 (64%) consumers who are allergic or sensitive to at least one food item, agreeing that food in grocery stores should be more clearly labeled with allergen information. Similarly, six in 10 consumers agreed that consistency between allergy labels across brands and products would be helpful on packaged food labels. In an effort to minimize the risk to food allergy suffers in Europe and allow them to make more informed product selections, FoodDrinkEurope launched guidance on food allergen management for food manufacturers in January 2013. The document aims to provide general guiding principles to all food operators regarding food allergen risk management. It outlines the critical elements of allergen management as an integral part of existing food safety management, from raw ingredients handling, to equipment and factory design, manufacturing, recipe verification, and consumer information. Implementing sound food safety practices in regards to allergens may help manufacturers better use ‘free from’ claims, moving away from ‘may contain’, which limits allergic consumers’ food options.
Limited NPD activity on the frozen food market
Most products that are launched with gluten-free or low/no/reduced lactose claims in Europe are shelf-stable and chilled, with frozen food products accounting for just 7% of launches. This suggests opportunities to further expand the range of free-from frozen foods available. Within the European frozen food market, the desserts and ice cream category accounts for the majority of product launches featuring gluten-free and low/no/reduced lactose claims. This is compared to all European food launches, where both gluten-free and low/no/reduced lactose claims are most commonly seen on bakery, dairy, and processed fish, meat and egg products. In addition to prepared meals, which include products such as ready meals and pizza, it can be suggested that frozen food manufacturers could explore opportunities within the bakery and processed fish, meat and egg product categories when looking to enter or expand their presence within the free-from market. This would offer more convenient options to free-from food buyers, reducing the need for them to cook from scratch. Almost half of adults who have bought free-from foods in the UK prefer to prepare their food from scratch, which could partly be due to the availability of free-from foods being limited. In recent years, some specialist free-from brands have looked to the frozen food sector to expand their presence in the burgeoning market. For example, gluten-free brand Genius moved into frozen pizza in the UK in 2011, and in Germany, Omira launched Minus L Laktosefrei Pizza in 2012. Available in Tomato & Mozzarella and Salami variants, the pizzas are made using lactose-free cheese. Additionally, Bofrost in Germany has launched a range of frozen free-from products under its Bofrost Free sub-brand. Products include pizzas, soup, pasta, fish fingers, ready meals, and bread rolls, many of which are free from both gluten and lactose.
Ice cream needs a lactose-free boost
Despite the desserts and ice cream category accounting for the majority of frozen food launches featuring gluten-free and low/no/reduced lactose claims in Europe, ice cream actually appears to lag behind other dairy-based products in the development of products to target the growing consumer base interested in lactose-free. Some activity has been seen in this category, such as Arla’s launch of Lactofree Lactose Free Real Dairy Vanilla Ice Cream in the UK, and Nestlé’s launch of Lactose-free raspberry ice cream in Finland, however, with a fifth of UK free-from buyers saying they would like to see a wider range of treats/indulgent products, mainstream ice cream brands have a clear opportunity to offer lactose-free variants to widen the appeal of their products to more consumers. The challenges around meeting taste expectations for what is an overtly treat product, and in finding shelf-space for brand extensions in the confined space of the freezer aisle, may be more pronounced in ice cream than in other dairy sub-categories. However, lactose intolerant consumers will increasingly demand attention from major food companies in years to come, and so more development of the ice cream category is required in order to keep pace.
Possibilities for mainstream brands
As well as private label and specialist brands looking to expand their presence in the frozen free-from market, opportunities are presented for non-free-from leading food brands to enter the market. For example, following the launch of its Deliciously Gluten Free range of pasta and pasta sauces in March 2013, Heinz could look to expand its offering within the frozen food market with a free-from range of products, such as gluten-free prepared pasta meals. In the UK, only 15% of consumers trust specialist free-from brands more than mainstream brands, and only one fifth of consumers trust branded specialist foods more than private label, which suggests the presence of mainstream brands in the free-from market should be welcomed. As diagnosis improves, and with young adults most aware of intolerances and sensitivities, the free-from trend is likely to have a long lifespan, with the number of people requiring free-from products set to increase. The number of consumers looking for free-from products for general health purposes is also likely to increase, even though the celebrity diet aspect may fade.