It sounds ridiculous to credit a single product with improving the fortunes of an entire category. But in the case of free-from, it may just be true.
Last May, Genius gluten-free fresh bread arrived on the scene, prompting a host of other brands to follow suit with their own fresh breads and retailers to reappraise their approach to the whole free-from category.
Previously considered too niche to support fresh products with short shelf lives, the free-from category has suddenly sprung to life. Sales have shot up 16.8% to £170.5m [Kantar WorldPanel 52w/e 18 April 2010] and there is more to come.
Brands have upped their NPD levels and are very much driving category growth at the moment. But retailers aren't taking the challenge lying down. They have overhauled their own-label offers as well as boosting the overall number of free-from SKUs. And the move into fresh bread is expected to pave the way for more fresh, chilled and frozen NPD, which would free the free-from category once and for all from the shackles of being predominantly ambient and, frankly, a bit worthy but dull.
The launch of Genius undoubtedly marked a turning point, says Michelle Berriedale-Johnson, who runs free-from advice website www.foodsmatter.com. "Bread had always proved more difficult to get right than cakes, because of the flours used," she says. "Genius was the breakthrough."
That certainly seems to be borne out by its impact. Within two weeks of Genius launching into 700 Tesco stores, it had become the retailer's bestselling free-from product. It is now stocked in all of the multiples and, according to manufacturer Finsbury Foods, has become the largest brand in the free-from market.
With the success of Genius, other manufacturers, including Nutrition Point and Mrs Crimble's, have developed fresh bread products, helping to drive a 21.5% hike in the value of ambient baked free-from goods (which includes fresh bread) to £42.2m [Kantar].
"Genius has radically altered the direction of new product development in free-from foods," says Finsbury Foods sales and marketing director Paddy Cronin.
Buoyed by the surprise success of Genius and the growth it fuelled in the category, retailers have also changed their attitude to fresh products. They were once reluctant to stock fresh free-from products because of the risk of waste, claim suppliers. That's no longer such an issue.
"We have helped to educate in-store personnel who are used to treating free-from bread as a shelf-stable product," says Chris Hook, managing director of Nutrition Point. Cronin adds that although shelf life is still important, retailers are now more interested in the quality of a product an approach that favours fresh over long life.
Huge strides are being made across the market to improve quality, says Berriedale-Johnson. "The change in the quality and range that is available has been phenomenal," she says. "I remember gluten-free pasta. That was a revolting blob. Now people will choose to eat it whether or not they have an intolerance."
This factor has been key in broadening the category's appeal. "The change came when consumers without specific allergies realised the potential benefits of avoiding gluten, wheat or dairy," she says.
Category newcomers aside, the gluten-free market serves two main types of customer those with a diagnosed intolerance such as coeliac disease and those who have decided they want to eat less wheat or gluten as they believe it is better for them.
Whatever their motivation, once people find a gluten-free or wheat-free product that makes them feel better, they're likely to repeat purchase, says Jeremy Woods, managing director of Mrs Crimble's, which launched its own fresh free-from bread last year (see box right).
"People may have a problem with bloating, for example, and decide to cut down on wheat," he says. "When they find that they feel better as a result, why would they go back to buying a cheap own-label bread?"
With consumers increasingly expecting products to deliver on taste and quality as well as health, the introduction of more premium products has provided an important boost, adds Sarah Crow, marketing manager at Sherriffs Foods, which launched Antony Worrall Thompson yeast- and gluten-free stock cubes earlier this year and is rolling out the chef's range of gluten-free marinades (see box right).
Such launches would not have been possible had standard free-from products not fallen in price. Free-from products used to cost significantly more than their standard counterparts as they required strictly controlled production methods and ingredients often available only in limited quantities. However, the price premium has fallen as the market has matured and achieved a degree of critical mass.
"Ten years ago, people were paying three times as much for a gluten-free product," says Woods. "These days, the premium on our products is 10%-15%, which people seem happy to pay."
Even where the premium is higher, consumers are still prepared to pay if there's no credible alternative. Genius, which carries a £2.99 price tag for a 600g loaf, is a case in point, says Berriedale-Johnson. "Before now, there was nothing coeliacs would really want to use to make a sandwich," she says.
Foodservice and grocery retailers haven't been slow to grasp the opportunity. Starbucks now sells a sandwich made with Genius, and the bread brand is talking to Tesco about producing a range of jointly branded sandwiches.
Free-from sandwiches aren't the only way in which the retailers are trying to improve their offers. Sainsbury's relaunched its branded and own-label line-up in February, a move that increased the size of its free-from range by 41%, according to free-from brand manager Susan Judge. "The marketplace is growing as more retailers realise how important this range is to an increasing number of customers," she says.
The move prompted Asda to lauch 78 new own-label and branded SKUs in May, focused on home-cooking. "We want to contest Sainsbury's claim to be the biggest free-from retailer," says Helen Devine, Asda customer planner for free-from. Asda plans to overhaul its entire own-label free-from range in December.
Branded free from has stolen the march on own label sales of which have fallen 6% in the past year, compared with a 27.8% hike in sales of branded [Kantar]. And although Asda and Sainsbury's are revamping their own-label ranges, branded looks set to continue driving the category in terms of innovation. Notably, when Tesco introduced its first frozen gluten-free range in March, it chose the Dietary Specials brand, rather than developing an own-label offer.
Frozen is currently the smallest sub-sector in the free-from market. Young's launch last year of fish fingers in a gluten and dairy-free crumb has spurred on retailers' interest in frozen free-from, says Berriedale-Johnson. "This is a very exciting development for the market," she says. "Having a big brand such as Young's in frozen free-from should make it easier for other brands to get in."
According to Finsbury's Cronin, it is precisely the lack of such a branded presence in chilled that sent the chilled convenience sub-sector crashing 33.1% by value last year the only part of free-from to fall significantly [Kantar]. "To make a breakthrough you need a good branded product and this sector hasn't got one yet," he says.
That may be about to change, however. Nutrition Point is currently trialling a cheese feast pizza, a pepperoni pizza and garlic bread in the chiller cabinets of 30 Asda stores under its Dietary Specials brand.
"Until now, part of the problem with chilled free-from products has been that the quality is not significantly better than that of ambient equivalents," says Hook. "People pay a premium for chilled and have expectations of quality that the fixture has perhaps failed to deliver."
Although other sub-sectors have delivered, many experts believe growth would have been even greater were it not for the recession. "Growth in the overall market has slowed due to the recession, perhaps more than anticipated," says Cronin.
That said, it has put in a pretty impressive performance under the circumstances and the growth prospects are looking good. The question now is: what'll be the best thing since sliced, fresh gluten-free bread?
Focus On Free-From