INNOVATION IN FREE-FROMd3hip0cp28w2tg.cloudfront.net/uploads/block_files/2014-12/david-ja… · Gluten Free Pasta, UK • Barilla gluten-free pasta, initial US launch, Italy in late

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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

© 2014 Mintel Group Ltd. All Rights Reserved. Confidential to Mintel.

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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