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Bord Bia sees gluten-free opportunities

6 May 2016

New market information from Bord Bia has suggested that significant export opportunities exist for Irish food producers operating in the gluten-free market.

New market information from Bord Bia has suggested that significant export opportunities exist for Irish food producers operating in the gluten-free market. At an event in Bord Bia’s Dublin office, attended by over 20 businesses including Brennan’s Bread and Goodness Grains, research was presented for key target markets, namely the UK, Sweden, Spain and Russia. The presentations by Bord Bia, Kantar Worldpanel and YouGov were delivered with a view to exploring export opportunities in these fast growing gluten free markets. This research, as guided by industry demand, is Bord Bia’s first time briefing companies on the gluten free sector. This summer, Bord Bia and seven Irish food companies will participate for the first time at the Free From Food Expo in Amsterdam, Europe's leading health trade show.

While the growth in free from foods is primarily due to the greater awareness and diagnosis of food allergies, the desire for a healthy lifestyle is the key driver across all of the markets that Bord Bia analysed.

“Products catering for food intolerances are becoming increasingly mainstream,” said Orla Donohoe, Bord Bia’s Bakery Sector Manager. “Health for many people is now more about a natural and balanced food intake rather than “diets” and calorie control and this is driving market growth. The wider free from market is one of the few categories growing at this pace across Europe and where the branded route to market is as viable an option as private label.”

Bord Bia has devised a programme for food companies targeting the gluten free marketplace, including individual company mentoring, market visits to Sweden and Spain and a further investigation into opportunities in Russia. In September, Bord Bia will also undertake a study into the Irish free from market, while market visits for companies will take place to Sweden and Spain. Ms. Donohoe added, “In export markets, understanding the consumer is critical to developing business and so exporters need to have a strong brand and innovative products which deliver on taste and quality. Bord Bia will be following up on these research projects in the coming months by assisting potential exporters in developing market entry strategies.”

In Ireland, the gluten free category is valued at €29 million, with sales of €40 million projected by 2020. An estimated 1% of the population has coeliac disease – higher than anywhere else in Europe.

The UK gluten free market is valued at £438 million, increasing by 36% in the last year. According to YouGov, a quarter of UK households are affected by food sensitivities. Gluten free is continuing to attract new shoppers as choices broaden and ranges significantly improve. Some 10% of the UK population is cutting down on gluten while a further 8% would like to, however two thirds of those trying to cut down gluten do not have any sensitivity to it. While there has been an explosion in the market for free from foods in the UK, 33% simply avoid foods they are intolerant of, indicating that there is potential for market innovation. Children’s products also offer an opportunity in the UK with almost 40% (39%) of parents now buying free from products, up from 28% in 2014. Nearly half of parents (48%) agree that there are not enough suitable products specially designed for children with intolerances.

In the UK, gluten free products are on average 27% more expensive than equivalent food and drink products with shoppers willing to pay the premium price point. Branded products currently account for over 70% of spend in the category. There is double digit growth from the majority of categories with bakery and morning goods growing at 20% each year, with over £6 million being switched into free from bakery over gluten alternatives in the last year.

In Sweden, one in ten people avoid eating gluten and the market for gluten free baked products in particular has increased by 23% since 2014, with crisp breads and fresh breads driving growth. The Swedish market has developed some innovative ways of delivering solutions with several retailers offering home deliveries of gluten free only products, while some restaurants also offer chef cooked meals delivered direct to the customer’s door.

Consumer trends such as health and a demand for premium products are driving demand for free from products in Russia. The value of the gluten free market here is €82 million and this has doubled in size since 2009. In Spain, gluten free sales have exceeded expectations in growing to €78 million, despite the economic recession. It is estimated that around one in 150 Spaniards suffer from coeliac disease.