Manufacturers of gluten-free food should expect a substantial increase in revenue and volume sales for the next few years.
The recently released Global Gluten-free Food Market 2014-2018 report, offered by Research and Markets, predicted that the market’s compound annual growth rate (CAGR) in terms of revenue will increase by 11.4% while volume CAGR will rise by 9.9% over the period of 2013 to 2018.
The combined effect of changing consumer lifestyles and increasing number of celiac disease patients contribute to the global gluten-free trend, which is most popular in North America.
Market research firm Mintel said the P10.5-billion industry grew by 44% in 2011 to 2013 alone. And when it comes to size, it should be pointed out that 24% of consumers eat or have someone in their household who eats gluten-free food.
A gluten-free diet, which first gained prominence as a way to deal with celiac disease, has become extremely popular among health buffs who believe that it helps alleviate abdominal and intestinal problems, among other things.
An earlier release by Mintel said the gluten-free food and beverage market will grow as much as 48% from 2013 to 2016, to a $15.6 billion-industry, at current prices.
Such figures are not surprising since new surveys show that the general populace has a favorable view of the trend. The NPD Group said their survey revealed that one in four consumers believe that a gluten-free diet is good for everyone, even those without celiac disease.
At present, vendors dominating the gluten-free market are General Mills (NYSE: GIS), The Hain Celestial Group, Inc. (NASDAQ: HAIN), Amy’s Kitchen Inc. and Boulder Brands, Inc. (NASDAQ: BDBD).
Other gluten-free product vendors who are also public companies include Domino’s Pizza Inc. (NYSE: DPZ), Kellogg Co. (NYSE: K), and Raisio plc (OTC: RTHVF).
General Mills has a gluten-free alternative in almost all of its Betty Crocker baking products and Chex cereals. Its first marketing shift to gluten-free food was in 2008 when it came out with Rice Chex. Its baking products followed suit.
Meanwhile, The Hain Celestial Group caters to the all-natural organic food niche market. It has its own gluten-free product page on its website, which features milk, soups, baking mixes, ice cream and pasta items.
On the other hand, Boulder Brands has its own Glutino product line, a pioneer in the gluten-free category. It also acquired Udi’s Gluten Free Foods, which also produces pasties and pasta.
Both Hain Celestial Group and Boulder Brands showed promising growth in the stock market over the last couple of years, which can partly be attributed to the shift in consumer demand for healthy food.
Even restaurants are riding the gluten-free diet trend with another survey claiming that 52% of restaurant chains will be adding gluten-free dishes to their menus this year.
Restaurant supply-chain co-op SpenDifference said its latest menu price survey reflect the growing demand for low-calorie and gluten-free menu items.
Of the restaurants surveyed, 55% said they already have gluten-free menu items.
The Original Soupman (OTC: SOUP), a popular soup kitchen in New York, is among the restaurant chains that are already offering gluten-free items. Its website lists nine soups, out of 40 variants, that are gluten-free. Most are vegetable-based soups like Tomato Wild Rice and Butternut Squash. Its gluten-free Lentil Soup is among the packaged soup variants being sold by the company through supermarkets and Amazon.
With niche brands and restaurants among the gluten-free pioneers, bigger companies are expected to follow suit and attempt to gain more market share.
Stocks dominating the gluten-free market, as well as emerging ones, are definitely something to look out for as the economy recovers and consumer income increases. Many market research reports in the food industry point to higher value purchases by consumers who prefer quality and healthy packaged food over cheaper and traditional ones.