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Meteoric growth for free-from foods: Mintel

By Rick Pendrous , 23-Sep-2011
Last updated on 23-Sep-2011 at 13:12 GMT2011-09-23T13:12:16Z

The free-from food sector is seeing meteoric growth

The free-from food sector is seeing meteoric growth

Britain’s free-from food sector is witnessing meteoric growth as more consumers report intolerance to certain foods, according to a new report about to be published by market research company Mintel. Retail sales are set to soar from £303M a year to £519M by 2016.

While the number of new free-from products continues to rise, the dairy-free sector overtook the gluten-free sector in bakery for the first time last year, said David Jago, global research director for Mintel. “Dairy-free is likely to continue to grow faster,” he said.

Gluten- and wheat-free baked goods were worth about £135M, while dairy- and lactose-free products were now valued at around £143M. The UK’s dairy-free sector is dominated by a few large players, such as Alpro soya product producer Dean Foods, and Lactofree products Arla Foods, he added.

In the gluten-free bread sector, brands such as Genius and Warburtons have lead the field, while in cakes, the Mrs Crimble’s brand from Stiletto Foods was also an “everyday favourite”, said Jago.

Saturated

But he warned that the bakery sector was becoming saturated with products. This could inhibit the continued growth of free-from sector overall. Since 2009, it had seen 32% rise in sales, equivalent to about 8–10% a year, he said.

Speaking at a free-from allergy and intolerance seminar in Daventry yesterday [September 22], organised by the Food & Drink Innovation Network, Jago said: “We need more new product development (NPD) in the market – not necessarily in baked goods; it helps to develop the market faster.” Jago cited free-from meal solutions and pizzas as potential areas for growth.

Consumers with clinically diagnosed allergies were a relatively small part of the potential market, with the growing number of people reporting food intolerances or making ‘lifestyle’ choices offering far greater commercial opportunities, said Jago.This view was supported by Jeremy Woods, md of Stilletto Foods, whose business strategy is based on sales to a much broader range of individuals. “As business we are outgrowing the market,” said Woods.

“One in 10 consumers say they will avoid certain foods to be on the safe side,” said Jago. “That indicates how mainstream it is going.” Seminar chair, Michelle Berriedal-Johnson of FreeFrom FoodsMatter, said: “Up to 40% of shoppers buy free-from foods on a ‘regular occasional’ basis even though they have no medical need to do so – and this number is going up.”

Mainstream

Berriedal-Johnson added: “We have the potential to become truly mainstream, but free-from needs to taste as good, or better than non-free-from.” She also called for more NPD in other sectors, such as ready meals and snacks. “We need more of everything – apart from baked goods.”

However, Britain’s major multiples increasingly see potential for growth in own-label products in the free-from sector, said Jago. “Own-label is taking an increasingly important share. It accounts for 50% of all NPD in the total category.”

The UK is leading Europe in free-from NPD, he reported. It accounts for 23% of all new products in the bakery, pasta and breakfast cereal sectors.

The foodservice sector also presented a huge untapped market for free-from foods, said Berriedal-Johnson. But it also posed specific problems in doing business, she added. Recent figures from Coeliac UK valued the potential restaurant market at about £100M, said Berriedal-Johnson. But, she added, coeliacs represented just 20% of overall potential in this sector.

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