Dont forgo flavor

Its no secret that Americans today are more likely to be allergic to certain food and beverage ingredients than they were a couple of decades ago.

So it should come as no surprise that the food intolerance category is expanding – and is expected to continue to do so. According to "Food Intolerance in the US," a report from Euromonitor, Chicago, sales of food intolerance products grew 1 percent to reach $2.7 billion in 2012. And the category is forecast to grow 2 percent annually between 2012 and 2017.

The growth is expected to be strongly driven by mass-market sales of gluten-free foods, the report explains. The fastest-growing area of the food intolerance category, gluten-free foods saw sales grow 16 percent in 2012 to reach $405 million.

And it wont be just gluten-sensitive Americans driving the growth. "Gluten-free Foods – US," a September 2013 report from global market researcher Mintel, explains that many consumers without celiac disease or a gluten sensitivity are interested in gluten-free foods and beverages.

Henry Leighton, CEO, North American operations of Sam Mills, Boynton Beach, Fla., notes that 30 percent of all Americans last year reduced their gluten consumption – or cut it out altogether.

"Some people think its a much healthier way to eat – and that you lose weight," he explains.

And the quality of gluten-free foods has improved over the years. Leighton adds that his company launched a line of gluten-free pretzels in January. And a lot of consumers have said they prefer the flavor and texture of those pretzels over that of their traditional counterparts.

Jonathan Walters, director of sales and marketing with Naperville, Ill.-based Nu-World Foods, agrees about the increasing quality of gluten-free products on the market.

"I make only King Arthurs gluten-free brownies in our house because when we serve them to our friends and family, people love them," he says, noting that hes not gluten-intolerant, but his mother and sister are. "It has nothing to do with the fact that theyre gluten-free, except that I know my sister and mom will eat them."

Where to go without gluten
So how should retailers go about building a gluten-free program? By walking and not running, advises Jeff Stewart, business manager with Muskegon, Mich.-based R.W. Bakers Co. – and expanding selectively as customers give their feedback.

"Be selective in your offering," he says. "Start out with something that you know theres going to be a market for. ... Start with a cookie; start with a muffin; start with white bread."

Regular white bread isnt the only kind of bread popular in the gluten-free arena, though. Emily Buckley, sales and marketing manager with La Pasta Inc., Silver Spring, Md., points to tortillas, flatbreads and other varieties as major sellers in the gluten-free bread category.

But retailers need to make sure that theyre working with manufacturing partners that understand food science well enough to create gluten-free baked goods that taste great and have a good texture.

"One issue, for example, is gluten-free bakery items can have a sandy texture from the rice flour being used," explains Roni Eckert, a food scientist with St. Francis, Wis.-based Wixon Inc.

Eckert also notes that sorghum, amaranth and garbanzo flours tend to have a pretty strong flavor. And because starches and gums are added in the gluten-replacement process, gluten-free breads and baked goods tend to get stale very fast.

Because starches and gums are added in the gluten-replacement process, gluten-free breads and baked goods tend to get stale fast.

Looking outside the bakery, the center store has some areas of opportunity for private label gluten-free products. Baking mixes, packaged cookies and dry pasta are three areas retailers should consider entering.

Fresh pasta, too, has "really taken off," Buckley states.

"I know plenty of great gluten-free dried pastas, though people with gluten allergies and intolerance want to be able to eat raviolis once again," she offers.

However, retailers will need to make sure that if they enter the fresh pasta space with a gluten-free product, they do so using a supplier with high-quality products. Buckley notes that its a challenge to create great-tasting gluten-free fresh pasta because of the doughs delicacy.

Whatever gluten-free products they seek to private label, retailers need to offer a good assortment of SKUs if they want to position themselves as a true destination for gluten-free solutions, Walters points out.

Other allergies matter
The gluten-free sector is huge, but its not the only allergy-related area in the food and beverage market retailers should consider for store brand development. Buckley notes that although it doesnt get as much attention as the gluten-free market, the dairy-free markets consumer base is just as large – if not larger. Her company produces a vegan ravioli variety for anyone who loves ravioli but cannot digest cheese.

Along with products containing dairy, items containing eggs are being pulled from many pantry shelves, Walters states. Luckily, dairy and eggs are two ingredients that are "easy to replace."

And products with low protein make up a category for which her company is getting "growing levels of inquiries from consumers and industrial/private label customers," says Sylvia Tam, vice president of sales and marketing with Maplegrove Gluten Free Foods Inc., Fontana, Calif. These products are sought by people suffering from phenylketonuria, a disorder that increases the levels of a substance called phenylalanine (a building block of proteins) in the blood, according to the National Library of Medicines Genetics Home Reference website.

Package, place, promote
Whether its a gluten-free bread, a dairy-free ravioli or some other product free from a specific allergen, packaging needs to function the same from product to product and across all categories, says Ritika Bowry, CEO and founder of Ritikas Global Grains, Lexington, Mass.

Packaging also must be free from unsubstantiated claims, even if the claim "seems obvious," Dutra says. For gluten-free products, retailers should inquire about and get oversight from certification organizations such as the Gluten-Free Certification Organization or the Celiac Sprue Association.

Packaging must be free from unsubstantiated claims, even if the claim seems obvious.

As for where gluten-free products should be placed, experts disagree. Walters believes retailers would do well mixing gluten-free products with their standard counterparts on shelves. On the other hand, Stewart recommends that retailers place gluten-free items – including store brand products – in a dedicated section of the store.

But why not try both? Dutra believes retailers should merchandise gluten-free products in multiple sections of the store. Retailers also could gain the loyalty of gluten- and other allergen-intolerant consumers by holding several awareness-related events – such as one based around Celiac Awareness Month – or inviting local support groups to hold meetings in the store.

Traditional merchandising strategies such as shelf talkers and end-cap displays of fast-moving items work too, Tam notes. She also recommends that retailers feature gluten-free store brand products and lines in ads to position themselves as a one-stop shop for those with gluten sensitivity.

And just like with any category, in-store demos help in the allergen-free store brand space, Buckley offers.

"I think people tend to shy away from gluten-free, dairy-free, etc., unless they are forced to eat them," she says. "If you have a quality gluten-free product, then sample it. If it tastes good, people will buy it."