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What’s next on the horizon for free-from products?
• INNOVATION IN FREE-FROM
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Innovation in free-from foods – where are we now?
Which countries, categories, products drive growth and innovation?
Where next?
TODAY'S PRESENTATION
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INNOVATION HAS COME A LONG WAY IN 10 YEARS
% of new food product introductions*, Europe, labelled as
gluten-free or low/no lactose
Source: Mintel GNPD Note: gluten-free only covers bakery, cereals, snacks, pasta & noodles; low/no lactose only covers dairy, dairy substitutes & desserts
2% 3%
4% 4%
5% 6% 6%
7%
8%
10%
3%
4%
5% 5% 5% 5%
6% 7% 6%
8%
0%
2%
4%
6%
8%
10%
12%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 todate
Gluten-Free Low/No Lactose
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Germany, 23%
Finland, 18%
Spain, 10%
Italy, 7%
Austria, 7%
France, 6%
UK, 5%
All others,
24%
WHICH COUNTRIES DRIVE INNOVATION?
% share held by top 5 countries is slipping… Only Germany is up
UK, 19%
Germany, 17%
Italy, 13% Spain, 13%
France, 9%
All others, 29%
% share of all gluten-free NPD,
Europe, 2010-14
% share of all low/no lactose NPD,
Europe, 2010-14
Source: Mintel GNPD Note: gluten-free only covers bakery, cereals, snacks, pasta & noodles; low/no lactose only covers dairy, dairy substitutes & desserts
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GLUTEN-FREE: WHICH CATEGORIES DRIVE INNOVATION?
New gluten-free food product introductions*, Europe, by category
Source: Mintel GNPD Note: only covers bakery, cereals, snacks, pasta & noodles
0%
10%
20%
30%
40%
50%
60%
70%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014to date
Bakery
Snacks
Side Dishes
Breakfast Cereals
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HOW ARE GLUTEN-FREE PRODUCTS POSITIONED?
New gluten-free food product introductions*, Europe, by claim category
Source: Mintel GNPD Note: only covers bakery, cereals, snacks, pasta & noodles
0%
10%
20%
30%
40%
50%
60%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 todate
Natural
Minus
Convenience
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LACTOSE-FREE: WHICH CATEGORIES DRIVE INNOVATION?
New low/no lactose product introductions*, Europe, by category
Source: Mintel GNPD Note: only covers dairy, dairy substitutes & desserts
0%
10%
20%
30%
40%
50%
60%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014to date
Dairy substitutes
Cheese
Milk & cream
Yogurt
Chilled Desserts
Shelf-Stable Desserts
All other
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HOW ARE LOW/NO LACTOSE PRODUCTS POSITIONED?
New low/no lactose product introductions*, Europe, by claim category
Source: Mintel GNPD Note: only covers dairy, dairy substitutes & desserts
0%
10%
20%
30%
40%
50%
60%
70%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 todate
Natural
Minus
Plus
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•What next for low/no lactose?
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• Low/no lactose on-pack
claims are high in meat
substitutes, as well as
processed meat and
poultry products
• Between 5% and 6% of
all new yogurts in
Germany, in the last
two years, are labelled
as lactose-free or
reduced lactose
LEARNINGS FROM THE GERMAN CASE?
Germany: % penetration of low/no lactose claims, selected categories
25.6%
20.6%
15.6%
8.6%
5.8% 5.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
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HEALTHY DAIRY ADDS LACTOSE-FREE BENEFITS
Danone Danacol yogurt, Spain, sales of
€2,6m in 40 weeks
Kaiku Sin Lactosa Calcio milk, “light
and digestible”, Spain
Milk is positioned as lactose-free and easy to digest;
Danone leverages lactose-free as an additional benefit for its
functional yogurt
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• WhiteWave Silk, No. 1 almond milk
brand, worth $340m
• Blue Diamond Almond Breeze, No. 2
brand, worth $284m
• Silk PureCoconut , 50% more calcium
than dairy milk, all natural, low in
calories, sold $17m in its first two years
“NEW” MILK ALTERNATIVES: GROWTH POTENTIAL
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•What next for gluten-free?
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• Nestlé Gluten Free
Corn Flakes, now
in several
European markets
• Oetker’s Cameo
frozen stone baked
pizza, Italy
• Sales of €9m in
first two years
• Heinz Deliciously
Gluten Free Pasta,
UK
• Barilla gluten-free
pasta, initial US
launch, Italy in late
2013
• Focus on balanced
flavour and firm
texture
• Sales of €4m in first
year
(MORE) MAJOR PLAYERS JOIN THE MARKET
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GLUTEN-FREE SPECIALISTS INTERNATIONALISE
• No.1 in Germany/
Europe
• New factory in US
opened in 2012
• Products launched in
20+ countries in last 2
years
• No.1 in UK
• Active in UK, Australia,
North America,
Continental Europe
• No.1 in GF bakery in
US & Canada (Udi’s &
Glutino)
• Now expanding
business in UK and
Continental Europe
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• Snacks is the largest segment in the US GF market, worth $1.2bn in retail
(2013)
• 40% of new snacks launched in the US in the last year are labelled gluten-
free, versus just 14% in Europe
• 1 in 3 UK consumers who buy gluten-free foods say they want to see more
on-the-go and snack items
LOOK TO THE USA TO DEVELOP GF SNACKING MARKET
Aldi LiveGfree
Snack bar made with ancient
grains
Chic-a-peas
Sea Salt Baked Crunchy
Chickpea Snack
Udi’s
Ancient grain crisps, now
also in the UK
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People following a gluten-free diet may not be consuming
adequate levels of vitamin A and B vitamins, plus minerals like
iron, magnesium, phosphorous, and zinc
Fortification could be a strong differentiator in the market place:
Less than 1% of gluten-free bakery/cereals/snack/pasta products
launched in Europe in the last 5 years has added vitamins or
minerals; only 12% of low/no lactose products are now vitamin-
/mineral-fortified
Roughly 1 in 5 UK consumers thinks that free-from foods are
often higher in fat/sugar than regular foods, about the same % as
think that free-from foods are healthier!
Enough
nutrition?
Confused
consumer
Fortification
TACKLE THE NUTRITION ISSUE
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• When buying healthy food, 28% per cent of UK consumers rank ‘high fibre
content’ as one of the features they look for
• Yet only 8% of gluten-free products in the UK carry a high/added fibre claim on
pack
FREE FROM FOODS CAN BENEFIT FROM HIGHER
HEALTH PROFILE
Udi’s Gluten Free Soft n’Chewy
Breakfast Bars , prominent high
fibre claim
Rice Dream, prominent added
calcium claim
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• Evol has wide
range of frozen,
convenience
foods including
classic and
ethnic recipes;
sales grew 70%
in 2013
• Lidl, LiveGfree
frozen snacks,
plus ravioli,
lasagne, etc.; no
artificial
ingredients,
cholesterol,
dairy, egg,
gluten, nut, soy
or wheat
• Amy’s Kitchen,
organic foods
brand, almost all
new products
now also free-
from
• The much more
mainstream, e.g.
Foster Farms
Gluten-Free
Corn Dogs
MOVE FREE FROM INTO FROZEN AND CHILLED
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• El Pozo chicken &
cheese shapes for
kids, Spain
(coating made with
corn and pea
flours)
• Heck! Fair &
Square Sausages,
gluten-free, UK
• Pasta Nuova gluten-
free fresh chilled
pasta range
• Riverside Bakery,
Too Good To Be
Gluten Free NO.G
chilled pies
EXPLOIT AREAS OF POTENTIAL IN EUROPE
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Give consumers
control Mainstream FODMAPs
FINAL POINTS
• Healthy lifestyle factor +
deeper penetration =
more mainstream
development
• Only 11% of UK
consumers say they
would be put off buying
a product that is labelled
as gluten- or lactose-
free
• The QR code on Zego
snack bar (US) provides
factory test results
• Watch out for FODMAP-
friendly products,
targeted at consumers
with IBS
• Australia & NZ, meal
kits and candy from The
Low Fodmap Food
Company (Sue
Shepherd)
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Katya Witham
Director of Innovation & Insight
David Jago