Healthy outlook for gluten-free foods

01-09-2013 | Foresight | Diederik Basch

Gluten-free foods have emerged as one of the strongest growth sectors in packaged food. Gluten, a protein found in wheat, barley and rye, can cause inflammation in the small intestines of people with celiac disease. From 2008 to 2012, sales of gluten-free products increased 12 % annually and are expected to grow nearly 9 % annually over the next 5 years to approach USD 700 million in sales in North America. The Food and Drug Administration recently published standards for gluten-free labeling that should help solidify the category and expand it from its current niche status in food.

Healthy outlook for gluten-free foods

The growth in gluten-free is supported by several factors. First, approximately 3 million Americans suffer from celiac disease and require a gluten-free diet. In addition, up to 40 million Americans are sensitive or intolerant to gluten. These numbers have been rising over the past decades and scientists currently do not have a clear explanation for the increase in celiac disease or gluten intolerance. However, it is clear that there is a large and growing market of people who require gluten-free foods. Second, while some people must eat gluten-free for medical reasons, more and more consumers are turning to gluten-free for the health benefits. Eliminating gluten can free up energy and some people claim to feel physically better. The trend has received favorable media attention along with celebrity endorsements. Probably the most notable example is professional tennis player Novak Djokovic, who publicly credited his gluten-free diet for his improved fitness that allowed him to capture the world’s number 1 ranking in 2011. Finally, product quality and availability have improved substantially over the last several years. Gluten-free foods historically were poor tasting and hard to find. However, product offerings are improving and food retailers are dedicating more shelf space to gluten-free foods. Restaurants and college campuses are also rapidly increasing gluten-free options.

Gluten-free pure plays are mostly small private businesses but a few packaged food companies are well positioned to capitalize on the trend. Boulder Brands is an early stage food company that is building out its healthy food portfolio with particular attention to gluten-free. Its two brands Udi’s and Glutino are market leaders and have experienced rapid growth. Hain Celestial, a leading manufacturer of natural and organic products also has gluten-free brands and continues to launch new products. General Mills has reformulated many of its cereals to become a leader in the gluten-free category.

diederik-baschDiederik Basch
Senior Analyst
RobecoSAM Sustainable
Healthy Living Strategy