Friday, June 17, 2011

Exploring the Gluten-Free Market

In recent trips to the grocery store, you may have seen products labeled as “gluten-free” and you may be wondering what exactly that means.

According to Wikipedia, “A gluten-free diet is a diet free of gluten. Gluten is a protein found in wheat (including kamut and spelt), barley, rye, malts and triticale. It is used as a food additive in the form of a flavoring, stabilizing or thickening agent, often hidden under ‘dextrin’. A gluten-free diet is the only medically accepted treatment for celiac disease, the related condition dermatitis herpetiformis, and wheat allergy.” Celiac disease affects at least 1 in 133 Americans, states

Since people who are on a gluten-free diet cannot eat products made with wheat, rye, or barley, many products on grocery shelves are off limits. By selling gluten-free alternatives, food producers can tap into an emerging market. Datamonitor (a company specializing in data analysis for the retail and consumer packaged goods industries) reports that there is major growth in the gluten-free market. Global sales are expected to reach more than $4.3 billion within the next five years. The U.S. market is expected to grow by more than $500 million by 2014, which would make the United States 53% of the global market.

If you are a food producer, this emerging market may seem tempting. But you must do the appropriate research before moving into this (or any) marketplace. Gluten-free is not only a diet necessary for a digestive condition; people without digestive diseases are also moving into the gluten-free diet. This may mean a burst in the market place in a few years similar to the low-carb or Atkins diets. On the contrary, you might find in your research that the gluten-free market is solid based on the demand by celiac and wheat allergy sufferers. Datamonitor analyst Mark Whalley says, “Brands should focus on appealing to a broader audience to strengthen the long-term prospects of gluten-free food. However, they cannot lose sight of the fact that core consumers of the products will always be Celiacs, so relying on consumers outside of this demographic in the long term will prove to be a very risky strategy.” No one can tell you which way to go, but by performing adequate research, you can determine if the gluten-free marketplace (or any new marketplace) is right for you.

As an ag entrepreneur, do you currently sell any gluten-free products? If not, have your customers been asking for them? How easy/difficult would it be to offer a gluten-free product?

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