Photo by Sara Dubler on Unsplash
December 22, 2023
Will the Gluten-Free Diet Industry Take Over Food Retail?
By now, everyone has heard of gluten, and what was once an obscure and misunderstood term has become a growing industry. The gluten-free diet market is positioned for significant expansion, aiming to jump from $6.5 billion in 2022 to an impressive $15.1 billion in 2032, according to a report from The Brainy Insights. This leap is driven largely by growing intolerance toward gluten products, with North America leading the charge, owning a 38.9% market revenue share in 2022.
Within the ever-growing gluten-free products market, certain key players have emerged as leaders, carving out significant market shares for themselves. Similarly, the market has diversified into various product and distribution segments, each contributing its share to the overall growth of the industry. Let’s take a closer look at these market leaders and crucial market divisions.
Leading Players in the Gluten-Free Market
Here are some of the retail leaders in the gluten-free space, listed alphabetically:
- Conagra Brands Inc.
- Freedom Foods Group Ltd.
- General Mills Inc.
- Kellogg Company
- Ecotone
- Mondelēz International Inc.
- Quinoa Corporation
- The Hain Celestial Group Inc.
- The Kraft Heinz Company
- Valeo Foods Group Ltd.
These corporations are making waves in the industry, contributing significantly to the rapidly expanding gluten-free products market.
Key Product Segments
The gluten-free products market can be divided into several categories based on the type of product. Here they are in alphabetical order:
- Bakery products
- Condiments, seasonings, and spreads
- Dairy and dairy alternatives
- Desserts and ice creams
- Meats and meat alternatives
- Others
- Pasta and rice
- Prepared foods
Each product segment caters to a different subset of consumers, offering a range of options for those seeking gluten-free alternatives.
Principal Distribution Channels
Here are the various distribution channels through which these products are offered to consumers in alphabetical order:
- Convenience stores
- Online
- Others
- Specialty stores
- Supermarkets and hypermarkets
Market Expansion Drivers
This upturn in the market is predominantly linked to the rising prevalence of celiac disease and related illnesses, alongside an overall shift toward healthier and balanced diets. The COVID-19 pandemic also added fuel to the fire, with consumers focusing more on their health and nutrition.
The Role of Retailers
The accessibility of gluten-free products is further improving due to both large and small retailers stocking these products. This trend is expected to favorably expand the target market and fuel consumption, with the demand for these products driven by increasing instances of lifestyle disorders such as heart disease, diabetes, obesity, chronic pulmonary disease, and metabolic syndrome.
North American Market & Bakery Segment
The North American region is predicted to maintain its dominant position in the market as a sizable portion of the population is already aware of the benefits of gluten-free products. The market is also fueled by the increasing prevalence of celiac disease, with research indicating that up to 83% of Americans with the disease are either undiagnosed or misdiagnosed. The bakery products segment currently holds the lion’s share of the market with a revenue of $1.23 billion, owing to its increasing popularity among millennials and Generation Z.
Supermarkets & Hypermarkets Dominance
Supermarkets and hypermarkets are the most significant revenue generators, accounting for $1.82 billion. These venues offer a wide range of gluten-free goods under one roof, making them a convenient option for consumers.
Potential Gluten-Free Roadblocks
Despite the numerous health benefits associated with a gluten-free diet, there are some challenges. Gluten-free flours used in manufacturing various products can have a high glycemic index (GI) and may be low in fiber. Additionally, gluten-free items often add fats and sugars to mimic traditional gluten-containing products, which can negatively impact health.
Manufacturers must also overcome several formulation challenges when producing gluten-free goods. They need to ensure that the substitute ingredients meet consumer expectations on several fronts, including cost, shelf life, taste, texture, and nutritional value.
Tech-Infused Opportunity
A potential solution to the aforementioned challenges is the use of microencapsulation to improve the shelf life and texture of gluten-free food, offering companies a modern technological solution to uphold the appealing qualities of their offerings.
In conclusion, the gluten-free products industry is a vibrant and diverse market, with several key players and an array of product and distribution segments. The gluten-free diet market is on a promising growth trajectory, fueled by increasing health awareness and technological advancements. The growing interest of large retailers, coupled with the escalating demand from North America, sets the stage for healthy future growth.
Discussion Questions
Considering the current surge in the gluten-free market, which factors, apart from rising celiac disease prevalence and a more pronounced health-conscious population, do you think could be driving this growth? With the influential role retailers have in the gluten-free market, how can they address challenges associated with gluten-free products, such as cost, shelf life, taste, texture, and nutritional value? How can retailers leverage technology to enhance these aspects and meet consumer expectations? Considering supermarkets and hypermarkets as the dominant distribution channels for gluten-free products, how can other distribution methods, such as online and specialty stores, enhance their strategies to capture a larger share of the market?
Poll
Loading …BrainTrust
Neil Saunders
Managing Director, GlobalData
Nicola Kinsella
SVP Global Marketing, Fluent Commerce
Shep Hyken
Chief Amazement Officer, Shepard Presentations, LLC
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Retailers and brands are simply responding to the increased demand for gluten free products. While this will remain a relatively small part of the grocery category, it is growing and offers are becoming more sophisticated. I particularly like M&S’s Made Without sub-brand which offers a really good selection of treats and everyday staples; it’s very well executed in store.
About 25% of Americans follow a gluten-free diet. The measured incidence of Celiac disease is less than 1%. About 6% of Americans are wheat intolerant. Why are 25% of Americans buying gluten-free products? Is it simply the latest fad?
A growing percentage of consumers are asking for gluten-free options. A quick Google search indicates that 30% of Americans follow a gluten-free diet, even if only a small percentage actually need to. The perception is that gluten-free is healthier. This is true if you are gluten intolerant. Otherwise, the research says it’s just swapping one way of eating (and enjoying) calories for another. So, the question is whether this is a fad or a trend. I’m not an expert in this area, but there is no doubt that people following a gluten-free diet, whether they medically need to or not, become more connected to food retailers and restaurants that cater to their needs.
My granddaughter, now 21, has Celiac. When she was diagnosed at 2 years of age, her parents both worked for CPG companies on the Walmart account in Bentonville. Upon return from the diagnosis, my daughter visited a Walmart Supercenter and could not find a single gluten free product. As noted, today the world has changed. While the number of Celiacs is very small, there is a significant part of the population which is choosing to eat gluten free. As a result my granddaughter now how unlimited (and I might add better tasting) options from which to choose. Follow market demands!
Some of my favorite foods – bagels and pizza dough come to mind – owe their unique goodness to the presence of gluten.
But many things you and I eat and enjoy regularly naturally contain no gluten – fruits and veggies, rice, legumes, meat and fish.
So I find it slightly amusing when manufacturers add GF labels to packaged products – soft drinks come to mind – that never contained any gluten in the first place.
For the few among us who suffer from celiac conditions, these unequivocal designations are probably helpful (although I imagine most of those folks are very well-informed about what food categories to avoid.)
For the rest of us, a GF label on packaged food products would be more like virtue-signaling, except that plenty of people have chosen a gluten-free lifestyle. Brands have good reason to be responsive to this preference if it is widespread enough.
When it comes to product formulations, I am wary when packaged foods use substitute ingredients in an attempt to simulate the eating experience of the actual food. Even when the results are acceptably good, the addition of fats, sweeteners, texturizers and flavorings seems less desirable to me.
As we age, the way our body processes food can change too. And people are more open to experimenting with their diet as a way to feel healthy than ever before. I’m not a celiac, but gluten-based foods for the most part make me feel bloated. Many others feel the same. But the U.S. has been slower than other regions (e.g., Europe, U.K., Australia) for gluten-free offerings to become mainstream, particularly in restaurants. Many places offer them now, but it has taken years. And when it comes to offerings for crackers to go with nice cheeses, or something sweet like shortbread, the U.S. lags behind. I’d love to see some of the gluten-free brands or recipes from Australia or the U.K. on U.S. retail shelves. Yum!
Gluten free is a trend, a trend that will stay around but not one that will overwhelm store’s shelves. People will try it, some people will stick with it, others will think about it and come to the conclusion it is too much effort. And I cannot help but believe that it is over diagnosed. A problem that is there for some but not the majority of the public.
Gluten Free & Organic resonates some consumers & that number is growing – its a trend that smart companies capitalize on. With coming US food regulations from the FDA Food Safety Modernization Act (FSMA 204) – a reckoning on the organic/gluten free product offerings coming – in particular for suppliers making claims that are exactly accurate. Alternatively some retailers may lean into traceability & smart labels to make their brand the reliable source for legitimate Gluten Free & Organic offerings.