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New research from Technavio underscores the potential for bakers and cereals processors to vastly boost their gluten-free sales in a market hungry for innovation and value. The report’s findings are the latest to predict strong growth in the global gluten-free market, with an expected CAGR of 12% by 2021 . Using added-value ingredients like inulin in these applications further boosts their appeal and presents huge growth opportunities for brand owners, according to Sensus.
The Technavio study reinforces previous research that highlights the ‘worried well’ as a key driver for expansion: a group that wants clear health benefits, but no compromise in product choice or quality . Inulin is filling the reformulation gap, providing a healthy, high quality solution that sets gluten-free products apart on retailers’ shelves.
One of the primary drivers behind the popularity of gluten-free eating is the expanding awareness of its health benefits, particularly for digestive wellness. The rise of the ‘worried well’ – healthy people who make self-diagnoses – as well as increasing numbers of celiac sufferers, are fuelling the gluten-free market and make these products attractive to a wider range of people than ever before.
Inulin offers food manufacturers a proven solution for digestive wellness, to meet rapidly growing consumer demand. Enabling further product innovation in the gluten-free market, inulin also allows the reduction of fat and sugar levels and a clean label, making for a holistically healthy product profile.
Brigitte Peters, Technical Manager at Sensus, comments: “Despite their health credentials, gluten-free products can be difficult to formulate and are often dry. But our research has found that, as well as boosting nutritional profile, Frutafit® inulin, which is extracted from chicory roots, provides valuable functional benefits, like improving texture, enhancing appearance and increasing moisture levels in baked goods. Plus, as a natural ingredient, it provides added value for label-conscious consumers.
“Gluten-free products have traditionally appealed to people with specific allergies or sensitivities, but increasing numbers of consumers are cutting gluten intake simply because they perceive it as a healthier option. Gluten-free products are difficult to perfect but ingredients such as Frutafit® inulin offer both the scientifically-proven health benefits and functional properties required of tomorrow’s most successful gluten-free innovations.”
The latest grocery market share figures from Kantar Worldpanel for the 12 weeks ending 26 February 2017, show supermarket sales grew at their fastest rate since June 2014 – up by 2.3% compared to the same time last year.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, explains: “Like-for-like inflation has doubled since last month to stand at 1.4% during the past 12 weeks. However, when placed in their longer-term context, these price increases are still fairly minimal.
“Staples such as butter, tea and fish all saw prices rise by more than 5% during the past 12 weeks, as fruit and vegetables – many of which are imported – also saw an uptick in price. However, it’s important to point out that inflation is still far from universal, with prices actually falling across a number of categories including crisps, bacon and eggs.
“While consumers may be starting to feel a very slight pinch, increased inflation has led to overall market growth. Simultaneously, combined sales at the UK’s four largest supermarkets increased by 0.5% year on year. This is a timely reminder that despite the huge interest in the discounters during recent years the big four remain a force to be reckoned with: they still hold just over 70% of the market, with almost 99% of the population shopping in a Tesco, Sainsbury’s, Asda or Morrisons during the latest quarter.”
Individually, Morrisons grew ahead of the market with a sales increase of 2.6% signalling its fastest growth in five years. Holding market share steady year on year at 10.6%, the retailer’s positive bricks and mortar performance was buoyed further by the continued rapid expansion of its e-commerce business.
Tesco increased sales for the sixth period in a row – a run it hasn’t experienced since January 2014 – although this wasn’t enough to stop the grocer’s market share slipping by 0.5 percentage points to 27.9%. Asda was the only retailer to see sales fall during the past 12 weeks, but a decline of just 0.8% represents a significant improvement and is the grocer’s best performance since November 2014.
Fraser McKevitt continues: “To the catchy soundtrack of its new ‘food dancing’ advertising campaign, Sainsbury’s returned to growth for the first time since March last year, with sales up by 0.3%. At the same time, its market share slipped by 0.3 percentage points leaving the grocer with 16.5% of the market.
“Lidl became Britain’s fastest growing supermarket during the past 12 weeks – with sales up by 13.0% – while Aldi grew almost as quickly, increasing sales by 12.9% to reach a record market share of 6.3%. Also growing ahead of the market was Iceland, with sales up 8.8%. Meanwhile Co-op and Waitrose both increased sales by 1.7% and 2.9% respectively.”
There were signs of changing shopping habits too. Having peaked at just over 40% of sales in 2015, the proportion of groceries sold on promotion continues to decline, falling to 34.3% during the past 12 weeks – its lowest level since October 2009. The most dramatic shift has been a move away from multi-buy promotions, with shoppers spending half a billion less on these types of deals than last year.
Fraser McKevitt comments: “Despite the general move away from multi-buys, meal deals remain popular – particularly around Valentine’s Day. Premium meal deals, which offer dinner for two at a price point of £10 or above, were bought by nearly 2 million consumers in February as Valentine’s Day offered a welcome opportunity to splash out.
“In fact, British diners spent £9 million more on premium meal deals than during the same period last year, suggesting that celebrating special occasions at home is an increasingly appealing option. 1.2 million shoppers bought still wine as part of their premium meal deal, 700,000 plumped for sparkling wine and 840,000 bought chocolates.”
Kefir appears to be bucking the trend that has seen launch activity in drinking yogurts and fermented beverages remain relatively static in recent years. While kefir launch numbers are still limited globally, Innova Market Insights data indicate that they grew more than three-fold between 2011 and 2016. This is despite launches in the overall drinking yogurt/fermented beverages sub-category rising by a much more modest +60%.
“As interest in fermented dairy products spread in the west alongside the arrival of the so-called functional foods market in the 1990s,” reports Lu Ann Williams, Director of Innovation at Innova Market Insights. “Kefir started to move out of its home in the Caucasus via limited availability in specialist health food stores in western markets to a more value-added, mainstream positioning, particularly in the US,” she adds.
The US pioneered the kefir market in the west and brought value-added options in resealable plastic bottles to the mainstream market. This allowed for more direct competition with other dairy and non-dairy beverages. It accounted for over one-third of global kefir launches in 2016 and beverages featuring kefir accounted for 40% of US drinking yogurt/fermented beverages introductions overall, compared with just over 8% globally. Europe accounted for the bulk of the remainder, led by more traditional markets in Eastern Europe, although launches in Western Europe have grown strongly, but from a very small base.
Kefir is strongly promoted on its healthy properties, particularly with rising interest in fermented foods and beverages overall. All US and nearly 94% of global launches used some kind of health positioning in 2016. There was initial emphasis on probiotics, particularly focusing on digestive health benefits. Even though regulatory issues have made this type of claim more difficult in some parts of the world, digestive health claims were still used for nearly two-thirds of global launches in 2016.
Nearly half of kefir launches use low fat claims and the sector has also not been slow to exploit rising concerns over sugar intake in the diet. The number of global launches positioned on low sugar/no-added-sugar and sugar free positionings double in 2016 to feature in 20% of the total. Organic and lactose free variants are also increasingly common, among kefir launches.