Free-from moves mainstream

Wednesday, 20 June 2018

The UK free-from foods market is forecast by Mintel to grow to £673m in 2020 - 43% higher than in 2015. These products have moved from medical necessity to mainstream products and ranges are increasing to cater for demand. But is it here to stay or will consumers move on to something new in the future?

Image showing free from food sales are to triple from 2010 to 2020

Mintel suggests that just over half of the free-from market comprise gluten and wheat-free products. Use of these claims has been rising and is now seen across a number of categories, including meat products such as burgers and sausages.

Pie chart showing that dairy alternatives, ambient bakery products, and biscuits are the most popular free-from categories

Why do shoppers purchase free-from?

Medical need exists, with one in 10 free-from users choosing these due to being diagnosed with a food allergy/intolerance, and a further 15% do so because they suspect one (Mintel). However, most consumers choose free-from foods for general healthy lifestyle reasons. Interest has been sparked by fresh innovation in the category, as well as social media noise, including celebrity endorsement. The free-from consumer tends to be younger than average.
Free-from foods have strong growth but do remain niche compared to the wider categories in which they sit. For example, spend on free-from meat is equal to just 1% of spend on primary red meat and chicken. Gluten-free bread accounts for 4% of spend in the total bread category.

More shoppers buying into gluten-free

Although 12% of Britons say they follow a gluten-free diet, there are shoppers who don’t commit to gluten-free but do occasionally buy these products. In a year, more than half of the population will purchase a gluten-free product at least once. Market growth is mostly coming from attracting more and more shoppers. 

Shoppers are prepared to pay more for gluten-free. On average, gluten-free bread is two and a half times more expensive than its standard counterpart. While many staple products faced price deflation, gluten-free prices increased by 22% on average between 2011 and 2015. There is, therefore, a market gap for lower-cost free-from foods. This could be met by economies of scale and/or increased availability at the hard discounters, where there is currently an under-trade in this market.

Dairy alternatives in growth

British consumers are exploring plant or nut-based dairy alternatives. Although a very small market by comparison to conventional pasteurised milk (at 5% of the size by volume), these products have grown 18% in volume terms over the past year, whereas conventional pasteurised milk is up 0.4%.

Chart showing sales of milk alternatives are increasing year on year

Sales of lactose-free milk increased 30% in the past year and the range of lactose-free products is growing. Given that these products are still made from cows’ milk, it provides a way to maintain sales in the dairy industry. Lactose-free ranges also link to export opportunities; it’s estimated that over 90% of China’s population has a degree of lactose intolerance.

Meeting consumers' needs

Euromonitor highlights the high levels of sugar and fat in gluten-free foods as a threat to growth. There is a mismatch with consumers’ perception that free-from foods are less processed and healthier than conventional products.

Given the growth of this market in recent years and the positive consumer attitude towards these products, there is still room for further growth in free-from. Opportunities for free-from lie in different meal occasions, such as the snacking sector and prepared meal solutions. 
The core market of coeliacs for gluten-free and those with allergies and intolerances will remain. However, given that many free-from shoppers are ‘lifestylers’, they are likely to move on to a new trend, albeit similar.