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Special Edition: Gluten-free

Riches in niches? The retail future of gluten-free

By Annie-Rose Harrison-Dunn , 26-Feb-2014
Last updated the 04-Mar-2014 at 10:10 GMT

If gluten-free bakery moves into mainstream retail space, careful considerations must be made, warn experts
If gluten-free bakery moves into mainstream retail space, careful considerations must be made, warn experts

Should manufacturers look to move gluten-free products into the retail mainstream or does the segment’s future lie in its niche positioning?

Food marketing expert, Professor Richard George, said he prefers separate gluten-free sections. “I believe there are ‘riches in niches’,” he told BakeryandSnacks.com.

There is also a functional purpose that a separate space serves, he said. “Personally, I prefer gluten-free sections at the retailer. This minimizes any potential cross contamination, namely, a celiac picking up a gluten product by mistake.” 

Business innovation manager at Leatherhead Food Research, Steve Osborn, disagreed saying it could be a sensible move to reposition gluten-free to appeal to a broader market. He said he saw the market moving further towards a mainstream positioning of gluten-free, as has already been seen within previously niche categories like fair trade, organic and meat-free foods.

“If we compare gluten-free with other niche type offerings – organic, fair trade, vegetarian – what we’ve seen recently is a mainstreaming of those categories.”

He said that placing gluten-free bread alongside regular breads, for example, would open up the market to people who may not have any kind of intolerance or allergen issues but may be seeking alternatives they perceive to be healthier. This could offer a more flexible approach to gluten-free product consumption, he explained, doing for the gluten-free market what the idea of recent ‘flexitarian’ marketing of Quorn had done for the meat-free segment.

George did admit that the gluten-free market spreads far beyond those actually affected by celiac disease. This breaks down into three distinctive markets, he explained. Firstly, those with celiac disease (an estimated 2.3 million Americans) and non-celiac gluten sensitivity (an estimated 18 million, around 6% of the US population - although there is no validated diagnostic test to confirm this); secondly the family and friends of celiacs looking to provide support, and finally consumers seeking a healthier diet or lifestyle through more ‘naked’ or ‘free from’ products.

Logistics of in-store integration

If retailers did consider integrating gluten-free into regular aisles, Osborn said carefully considered labeling would be crucial.

Gluten-free shoppers are “high involvement” consumers, he explained, seeking out gluten-free products and paying particular attention to labels.

“Just like an organic consumer who will not select a non-organic product, and prefers all organics merchandised together, the same is true for gluten-free shoppers. If a retailer is going to integrate gluten-free products with non gluten-free products, I strongly recommend the use of colorful tags highlighting the presence of gluten-free alternatives.”

However, he warned that with such integration comes the responsibility for insuring products and tags match. He said employee and customer education would be key in making this tact work.

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In terms of a retail future for gluten-free, George said online is one of the areas worth considering, saying Amazon offers over 10,000 gluten-free products, but less than 1,000 organic products.

Vhari Russell, founder of The Food Marketing Expert, agreed with the online potential, explaining that this avenue could be a way of tackling limitations of niche free-from fixtures in store. She explained that online search functions for specific products would throw up all options, including gluten-free. 

Whether online or in store, Russell said that communication would be critical to gluten-free success and far easier in a smaller and an online platform with recipe suggesting or small store offering sampling could better facilitate this. 

“With many retailers stocking products in online and in store, the key thing is to communicate to those sectors of the market that are looking for it. It is not main stream, but that does not mean to say that a product can’t be mainstream and be gluten free,” she said.

In-store bakery opportunity 

Last year, UK ingredients firm Ulrick & Short told us that gluten-free products baked in store present a massive untapped opportunity. The firm said consumers interested in gluten-free products likely had enough disposable income to buy these probably more expensive fresh products.

At the time, the firm’s director Adrian Short said: “There is immense potential for in-store bakeries to benefit from this growing trend by investing in a greater variety of products that meet consumer demand.”

“They want to buy speciality cakes and bread. There’s a gap there and in-store bakeries could fulfil the needs of these consumers,” he added.

Commenting on this opportunity, Chris Brockman, Mintel’s senior global food and drink analyst, said: “Yes, the opportunity is there but there are issues. The main problem here is cross-contamination - supermarkets would probably need separate bakery areas. There is also an issue with wastage - wastage is very high in in-store bakeries and could be higher with gluten free breads.”

 

For more on this gluten-free special edition, click the links below:

Could oats be the next gluten-free star?

What’s the size of the US gluten-free prize? $490m, $5bn, or $10bn?

Weston Bakeries: I’m not sure there is a ceiling on the gluten-free market; if there is, we haven’t reached it yet

Four gluten-free myths debunked

The lowdown on celiac disease, gluten sensitivity and celebrity wheat-bashing: In conversation with Dr Alessio Fasano

Cup4Cup on growing 'appropriately' in the exploding gluten-free products market

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