Alternatives Encroach EXECUTIVE SUMMARY Key takeaways to improve decision-making:
Gluten-free brand marketers must protect their turf as some of the nation’s top retailers not only ramp up gluten-free offerings but also add and expand gluten-free store brand alternatives.
The favorable price/value proposition associated with private label goods compared with name brand equivalents (NBE) could be enough to entice consumers to not only trial gluten-free store brands but perhaps make a more permanent switch.
Some retailers, e.g., Target and Aldi, are increasingly labeling everyday items as “naturally gluten free” or clearly featuring the “gluten free” label on product packaging, making it easy for consumers to identify items that meet their dietary requirements.
Expect more retailers and brand marketers to follow suit on labeling and transparency issues. But first they must carefully weigh the cost/benefit relationship associated with a labeling and packaging redesign vs. creating an easy and possibly more compelling shopping experience for consumers.
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Retailers are ramping up gluten-free store brand initiatives in an effort to grab a piece of the high-growth gluten-free market.
Gluten-free private label products offer shoppers a much needed value alternative to pricey name brand equivalents and items historically only available at specialty retailers.
Aldi’s liveGfree Brand Becomes an Immediate Hit
Aldi’s liveGfree introduction
could be considered the past year’s biggest success story in the gluten-free private brand space. Discount grocer Aldi made a huge splash in late 2014 when its line of gluten-free goods began trickling into stores.
The liveGfree assortment includes boxed baking mixes (e.g., cakes, cookies and pizza crust mixes), gluten-free pastas, and a host of frozen foods, which range from breaded chicken nuggets and ravioli to pizza and pancakes. The retailer continues to expand
the line. For example, it’s adding seasonal items, such as gluten-free stuffing, for the holidays. However, it is not just the replacement of gluten-filled products where Aldi excels. Hundreds of other items it carries are “naturally gluten free” too, which the retailer takes care to clearly call out on product labels. Based on its gluten-friendly practices and value-pricing – along with substantial future store expansion – expect Aldi to capture a larger and increasingly loyal gluten-free customer base.
GLUTEN FREE Retail Intelligence™
Aldi’s Gluten Free-friendly Labels
Aldi labels hundreds of
everyday items as
“naturally gluten free.”
Kroger, the nation’s largest
conventional grocer, is focused on capturing its fair share of the “good-for-you” products market. The retailer recently reported that it generated $11 billion in sales from natural and organic products during the past year, which is equivalent to about 10% of total company revenues. A key contributor: growth in Kroger’s Simple Truth natural and organic private label, which includes an increasing number of gluten-free items: e.g., waffles and breaded chicken tenders in the frozen section, and baking mixes and pastas in the Nature’s Market department. The retailer also sells gluten-free pasta under its eponymous Kroger store brand.
Gluten-Free Private Label Items Are Located throughout Kroger Stores
Simple Truth gluten-free breaded chicken tenders in frozen case
Kroger brand gluten-free penne pasta and spaghetti in pasta aisle
Kroger’s Nature’s Market area features a growing roster of Simple Truth gluten-free items, including baking mixes and pasta assortment.
Target’s Simply Balanced gluten-free crackers represent a value alternative to name brands like Blue Diamond Nut Thins.
Simply Balanced gluten-free granola bars
“Gluten free” label on naturally gluten-free items (e.g., fruit snacks)
Target has ratcheted up its
strategy of offering more health & wellness in the grocery aisles. The retailer is focused on creating a differentiated food offer that features “trendy” merchandise (e.g., protein bars, nuts, etc.) as well as an increasing assortment of organic, gluten-free and other healthy options. Target not only has introduced gluten-free crackers and granola bars under its Simply Balanced label, but it is making strides to improve labeling on other products in its portfolio as well. For example, naturally gluten-free items like fruit roll-ups and gummy snacks are now clearly labeled “gluten free.”
Gluten Free at Walmart
Walmart is upping its
gluten-free game. We found the mass retail giant’s level of involvement in the gluten-free products market a somewhat pleasant surprise. At present, a typical Walmart Supercenter devotes about an eight-foot section within the grocery department to gluten-free items. A somewhat limited assortment in terms of product depth and breadth
is featured in the dedicated section. But the selection of popular gluten-free specialty brand stalwarts (e.g., Glutino, Pamela’s, Udi’s, etc.) and newer niche entrants (e.g., Goodie Girl Cookies) span categories a gluten-free shopper would expect – e.g., specialty flours/baking mixes, pasta, sweet and salty snacks – and is more than sufficient for basic pantry-stocking.
Perhaps most intriguing is the selection of gluten-free items available under Walmart’s Great Value private label brand. The assortment includes cookies, granola bars, pasta and pretzels – all, not surprisingly, priced well below available national brand equivalents. For example, the price of a 6-oz. box of Great Value rice pasta & cheddar cheese mix ($1.28) is nearly half that of the comparable Annie’s brand item ($2.48).
Walmart’s gluten-free Great Value products offer a substantial price/value alternative to name brands.
Value Proposition: Great Value + Gluten Free
Granola bars Pretzels
Walmart Continues to Grow its Gluten-Free Great Value Assortment
About… GLUTEN FREE Retail Intelligence™ is part of an ongoing series of insights & intelligence on the
gluten-free retail marketplace available at www.GlutenFreeRetailHQ.com.
GlutenFreeRetailHQ.com provides research, analysis and insights for retailers and brand
marketers to make strategically informed decisions regarding their health & wellness initiatives and product/brand strategies and market positioning. More specifically, GlutenFreeRetailHQ.com aims to be the "go-to" source of insights & intelligence for retail and CPG executives who have a vested interest in the high-growth gluten-free space. GlutenFreeRetailHQ.com is headed by Sandy Skrovan, a seasoned market researcher, insights provider, and retail analyst & strategist. Sandy has directed syndicated insights & intelligence programs and customized research projects for large consultancies and research houses, including Kantar Retail/Retail Forward, Planet Retail/WGSN Group and PwC/Management Horizons. She is a trusted adviser to top-tier retailers, brand marketers and a host of other organizations that have applied her insights, perspectives and recommendations in their strategic planning and decision-making processes. Sandy also advocates for Celiac Disease, which affects 1 in 133 Americans – most just don’t know it yet. Fortunately, Sandy is one of the medically diagnosed and has been living gluten free since 2001, way before it was on-trend. For many Americans as well as consumers around the globe, gluten free isn’t a fad but a medically required dedicated lifestyle. For retailers and manufacturers, “gluten free” is expected to be one of the highest growth categories in the coming decade and beyond.
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