What’s driving growth in the free-from market?

There is a parallel between the shift towards over-the-counter sales in the pharmaceuticals sector and the wider availability of foods which are free-from gluten and lactose, among other allergens and sources of intolerance and sensitivity.

In both cases, recent years have seen a move towards more branding, broader choice and easier access but also a much greater emphasis on consumer awareness and self-diagnosis, sidelining the role of medical professionals. 

But of course, free-from products are foods, not drugs. On one level, this means that consumers have come to expect the same appeal – on every level from packaging to taste and texture – that they find in the other food aisles. On a second level, these products are being incorporated into the wider mix of consumer perceptions about healthier and less healthy eating. 

The commercial opportunity is clear. In its latest report on free-from market opportunities, Leatherhead Food Research (LFR) puts the combined size of the gluten-free market in the US, UK, France, Germany, Italy and Spain at $3.5bn (2010). The equivalent figure for lactose- and dairy-free was $3.6bn. 

Predictably, the US is the largest, single gluten-free market, accounting for $2.65bn of the $3.5bn. Of the remaining slice, Germany is reckoned to contribute $279m and the UK $200m. But while annual growth in US gluten-free has averaged 6% since 2006, says LFR, these two European markets have each notched up 12% growth.  

Supplier of gluten-free ingredients National Starch Food Innovation quotes Euromonitor estimates which forecast volume growth in Germany, over the five years to 2015, of up to 40% in gluten-free. Euromonitor puts the 2010 value of the gluten-free market in Europe, Middle East and North Africa at $1.2bn in 2010, National Starch reports. 

National differences

In France, Limagrain Céréales Ingrédients (LCI) has plenty of experience in supplying gluten-free markets with rice and maize-derived flours. This requires particularly complex sourcing and monitoring processes. 

LCI nutritionist Dr Walter Lopez identifies the US as the market that continues to drive the gluten-free sector, and is expected to continue in growth for the next two decades at least. Key end-use applications tend to be in the areas of baked goods and pasta.

One of the US-based manufacturers to have most recently opted to alert consumers to the gluten-free status of qualifying products – including its corn and potato chips – is Frito-Lay North America. 

“In Europe, the Italian, Spanish and British markets are advanced in comparison to France,” says Lopez. “Why? Because coeliac associations are stronger in these three countries, and are pressurising the food industry to reduce gluten and to label it.” 

Although the topic is relatively new to France, major chains such as Auchan, Carrefour and Casino now provide complete ranges of gluten-free products. 

At Coeliac UK, deputy head of diet and health Lisa Miles emphasises the importance of the EU limit, introduced at the beginning of this year, of 20 parts per million for food labelled as ‘gluten-free’. “This is a more stringent level and, as a legal requirement, it has raised awareness of the threshold,” she says. 

According to Lopez at LCI, not all countries are happy with this limit. “In Spain, the local coeliac association gives its specific seal of approval to products which contain less than 10 parts per million of gluten,” he says.

But it is the figures relating to the consumer population which intrigue the wider free-from supply chain. As Miles at Coeliac UK explains, around 1% of the population is understood to be affected by coeliac disease. “However, many people experience symptoms but do not attribute them to coeliac disease,” she says. “In fact, we estimate that as few as 15% or even 10% of those with the disease are actually diagnosed.” 

Then again, as LFR’s report points out, since lactose intolerance is far more widespread than coeliac disease or gluten intolerance, the category should – by rights – be correspondingly larger. In fact, the two categories across the US and Western Europe are of comparable size. This suggests either that lactose-free is not realising its full potential, or that gluten-free has a wider appeal beyond those with a medically-diagnosed condition.

Triggers for growth

Senior LFR market analyst Laura Kempster identifies greater supermarket availability and widening ranges from specialist and non-specialist manufacturers as two of the reasons behind the international growth in free-from foods. “But our consumer research also showed that more people are tending to dip in and out of gluten-free, for instance, when symptoms such as bloating are more significant,” she reports. “There’s a wider band of consumers who believe that free-from foods can be part of a healthy lifestyle.” 

National Starch Food Innovation is similarly aware of groups of consumers choosing these foods “as part of a more health-focused diet and lifestyle”. 

Food allergy and intolerance blogger, and author of books including Coeliac Disease: What You Need to Know, Alex Gazzola believes that gluten has an image problem. “The evidence suggests that, unless you have a specific condition, then it’s fine to include it in your diet,” he says. 

“But if there are categories of food out there labelled ‘gluten free’, it’s easy to conclude that it must be bad for you,” he adds, suggesting that some consumers will infer parallels with fat-free or sugar-free food and drink, for example. 

Such perceptions are not helped by the procession of celebrity tweeters and tennis stars advocating gluten-free (and sometimes lactose-free) diets. Attempts to find out whether these individuals have a specific medical condition are rarely successful, says Coeliac UK, and in many cases the scientific justification seems at best shaky. 

Miles also notes the widespread belief that avoiding gluten (rather than the foods it tends to appear in) can help in weight loss. But, she points out, there is no scientific basis for this belief. 

Part of LFR’s international research focused on consumers without any allergy, intolerance or sensitivity. Asked whether they would consider eating free-from products, even in the absence of a specific condition, over 70% said they would. This could just be an indication of broad-mindedness or flexibility. But does it also suggest a bracketing of these foods with the wider better-for-you category? 

One problem is the issue of definitions. On one level, this is to do with consumer perceptions. “Food allergies and intolerances affect only 7% of the total population,” says Lopez. “But when you ask European consumers whether they have an allergy problem, 33% say they do. Food today is anxiogenic due to the last crisis, whether that was BSE, dioxins, pesticides or additives. But good nutrition consists of complexity and diversity in food, not exclusion.” 

On another level, medical perspectives are also becoming more nuanced. As Gazzola explains, while around 1% of the population is understood to be coeliac, up to 6% are thought to have gluten intolerance. But many of the symptoms are similar, and differentiation appears to have become more rather than less problematic. 

“The diagnosis of coeliac disease used to be considered black and white,” he says. “But experts are starting to realise that there are shades of grey.” 

The dairy dimension

So could some of the same questions of category boundaries affect the lactose- and dairy-free segment, too? Could this also be driven by subjective consumer preferences as much as by demonstrable need? 

At Valio in Finland, export manager with responsibility for licensing the company’s Zero Lactose technology Maritta Timonen has no trouble explaining the success of lactose-free milk in the domestic market. 

“In Nordic countries we tend to drink a lot of milk. But Finland also happens to have a higher rate of lactose intolerance than many of our neighbours, affecting 17% of the population,” she says. “Since around 15% of Valio’s milk volume is lactose-free, our sales figures correlate closely with this incidence.” 

But the 10% annual growth that the Finnish market has been seeing was eclipsed by last year’s 20% growth in the Swedish market, for example. 

“In 2001, we were the first to launch lactose-free milk with the taste of normal milk,” explains Timonen. The technology has since been taken up for liquid milk by licensees in Spain, Switzerland, Norway and South Korea.

In Germany, local lactose-free supplier Omira has a strong position in the market with its MinusL brand, while in the UK, Arla has carved out a similar niche with its Lactofree range of fresh milk and other dairy products. In France, however, the lactose-free sector is not so well developed. 

A newer product for Valio is its Zero Lactose skimmed milk powder and, even more recently, whole milk powder for industrial applications. The company supplies processors in Germany, Switzerland, Spain and Italy, as well as Finland, says Päivi Saarentola, marketing manager for cheese, butter and ingredients. 

Lactose-free chocolate constitutes a significant market, but so too do ice cream, baked goods, ready meals and milk drinks. 

Tackling the issue from another direction, DSM has introduced its Tolerase L acid lactase enzyme. In supplement form, this can help to relieve the symptoms of lactose intolerance. The European Food Safety Authority (EFSA) has concluded that lactase does indeed break down lactose. 

As the liquid milk technology license for South Korea demonstrates, interest extends beyond Europe. “In Asia, the use of dairy products is still low,” she admits. “But as the diet is becoming more western, and since the vast majority of the population tends to be lactose intolerant, there is potential interest here, too.”

Spectrum of symptoms

Even though the success of Valio’s Zero Lactose is evidently based on genuine intolerance, Timonen is clear that consumer interest goes wider than this. “It is also to do with more general health-and-wellness concerns as they relate to digestive health,” she says. “In many cases, a condition is medically diagnosed. But in other cases, it is self-diagnosis. Symptoms may be similar to those of other conditions such as irritable bowel syndrome, and consumers will often not be clear about the cause.” 

As Timonen points out, even among those who can accurately be categorised as ‘lactose intolerant’, sensitivity and reactions will vary widely. 

Does it matter if consumers are prompted by celebrities to exclude gluten or lactose from their diet? 

As Gazzola points out, medically-diagnosed coeliacs are likely to receive better guidance about maintaining overall balance in the diet. But Miles at Coeliac UK reports that there is little evidence of nutritional adequacy in gluten-free diets. 

Perhaps what is most concerning is the fact that some groups of consumers are making dietary changes, relating to general gut health or even broader perceptions of wellbeing, which have no basis in science. 

Few of us are completely immune from choices which fall – at least occasionally – into the ‘evidence-free’ category. Whether the food and retail sectors should in any way collude with such unscientific thinking is quite another question.