Focus on Free-From – Coming of Age
Free-from is one of the grocery’s great success stories. Worth just £173.5m five years ago and largely seen as a special interest niche, the category is now valued at a whopping £335.1m, and more than half of the UK population (55.2%) is buying free-from products (Kantar World Panel 52 w/e 14 April). By 2018, the sector is set to be worth £538m, according to forecasts from market analysis Mintel.
But as free-from comes of age as a mainstream category, its likely to have to work harder to maintain growth. Kantar’s figures show year-on-year growth has slowed for the first time on record, coming in at 19% compared with 24.8% in 2013 (although its worth noting that absolute growth has dipped by only £100,000, to £58.9). So what strategies will help the category to keep growing?
Its clear lifestyle choice plays a big part in the sector’s success. Far more consumers buy into free-from than have been diagnosed with a food-related condition. For example, just 1% of the UK population has been diagnosed with coeliac disease – an autoimmune condition that requires sufferers to avoid all gluten – and an estimated 15% are intolerant to lactose (Kantar).
Free-from’s march on the British mainstream has been lent a huge helping hand by high profile endorsements from celebrities such as Victoria Beckham, Jessica Alba and Miley Cyrus, who famously took to twitter two years ago to tell her fans that “gluten is [email protected]!” and they should try cutting it from their diets. “The change in your skin, physical and mental health is amazing.”
But these days, there’s much more to free-from’s success than media-friendly sound bites from Hollywood A-listers.
“The fashion factor helped to get it off the ground but its got beyond that now,” says David Jago, Director of Innovation and Insight at Mintel. “There are a lot more products out there and they’re a lot better quality than they used to be. And there’s much better presence and visibility in-store. Its no longer a ghetto.”
Increased innovation and wider product ranges have been key rivers of growth, generating more frequent purchases from existing customers, according to Kantar.
‘Life-stylers’ like Cyrus – who believe eliminating gluten and dairy is good for general health – continue to be an important free-from demographic, but the category’s customer base has also grown as public awareness of food allergies, intolerance and sensitivities has increased.
The massive growth in demand is being driven by an increase in customers becoming more aware of their intolerance to wheat and gluten,” says Tesco Buyer Lauren Tredgett.
Because more children than adults suffer from food related conditions, free-from has benefited from a ‘four in one’ purchasing effect, where parents are reluctant to stigmatise one child and therefore buy free-from food for the whole family. “The increase in the number of children being diagnosed with coeliac disease causes whole families to move to a gluten-free lifestyle and this ‘four in one’ effect has influenced the whole category” says Beverly Singer, Senior Account Manager at pasta and noodle manufacturer Ugo foods.
With a wider set of people buying into free-from, brands and retailers are responding by increasing NPD and broadening their product ranges. Tesco, for example, launched a Free From Food Fair last month, which will see it trial 340 new foods in nearly 80 stores over 13 weeks. “The most popular products will be reviewed and included in our ranges,” says Tredgett.
Meanwhile, Sainsbury’s has reformulated its core ranges to remove allergens and make more products accessible to free-from households. “We are constantly looking at ways to make it easier for customers with allergens and intolerance’s to shop in Sainsbury’s by removing unnecessary allergens across core products, such as the recently launched gluten free Salisbury’s Corn Thins,” says a spokeswoman.
Mirroring Mainstream Trends
NPD and innovation will be watched words as the sector continues to mature. Although Kantar points out it is possible this year’s growth rate is lower because the important Easter trading period was not included, it is clear consumers expectations of the category will get only more demanding.
As free-from becomes more mainstream it should therefore mirror mainstream trends. For example, consumers’ desire for indulgence is an opportunity yet to be maximised in free-from, according to Jago at mintel. “More indulgent bakers are gaining traction with consumers,” he says. “Indulgence works well with healthy life-styler, who wont sacrifice taste, or will buy once but never again if it doesn’t taste good.”
The fast growing free-from cereals sector – which is now one of the six biggest free from categories, having overtaken sweet home cooking over the past year – could offer especially good opportunities for indulgence-focused NPD, Jago adds.
Breakfast and snacking brand Perkier is already tapping the indulgence trend, developing breakfast products and snacks bars that cater for indulgence as well as health. It claims its porridge pots contain twice the level of fruit of their mainstream counterparts, while the snacks are wrapped in Belgium chocolate milk.
Bakery brand Mrs Crimbles also sees a push towards more adventurous and indulgent flavours. “The key drivers remain taste and quality. With the dividing line between mainstream and gluten-free increasingly blurred, people want foods that the whole family can enjoy together rather than marginalising specific needs or preferences,” says Marketing Manager Claire Ramsey.
Its not just bakers and cereal makes who are ramping up free-from’s indulgent cues. Dairy alternatives brands are also getting in on the act, led by the likes of ice-cream brand Bessant and Drury and Yoghurt maker Coyo, whose coconut-based products are marketed as much on their luxury credentials as on their free-from status. Alpro, too, recently expended its desserts range, adding a gingerbread variant to its soya puddings.
Away from the indulgence, mainstream format trends, such as food on-the-go, are finding traction in free-from. Earlier this year, Tesco teamed up with bread brand Genius to develop a range of gluten-free sandwiches, while Perkier launched what it claims to be gluten-free sector’s first tubs of bitesize biscuits, designed to cater for the ‘sharing trend’.
Consumers desire products to consumer on the go, whether its breakfast, snacks or a quick lunch,” says Perkier foods co-founder and director Ann Perkins. “Perkier porridge pots and snack bars tap this trend and hence have secured listings in up to 940 Tesco Express stores in 2014.”
Meanwhile, gluten-free food brand Dr Schar points to opportunities in the frozen food sector, which has shown exponential volume growth of 36.8% from 2013 to 2014 (IRI 16 w/e 19 April 2014). “Some have expressed concerns about the market becoming saturated; however, there is huge concerns about the market becoming saturated; however, there is huge potential for first-to-market products that match the taste and quality of mainstream options,” says UK retail brand manager Alicia White.
Dr Schar says it has been strong sales of its frozen white rolls and now plans to extend its frozen NPD but remains tight-lipped on details. Its Bonta d’Italia and Salami pizzas have also secured new listings in Waitrose and Ocado, having previously only been available in Tesco Asda and Morrisons.
For its DS gluten-free brand, speciality bread will be a key focus this year, as well as convenience and foodservice.