Gluten-free continues to grow

Gluten Free Tours.

Photo by Flickr user Paul Swansen, used under a Creative Commons license (CC BY-ND 2.0)

Thanks to J., I just read a recent article by Stephanie Strom at The New York Times that examines growing sales of gluten-free foodstuffs at grocery stores. (This despite the relatively small percentage of the population with celiac disease or gluten sensitivity.) As she describes,

Harry Balzer, vice president at the market research company NPD Group, where he has followed the food industry for some 30 years, [said] “About 30 percent of the public says it would like to cut back on the amount of gluten it’s eating, and if you find 30 percent of the public doing anything, you’ll find a lot of marketers right there, too.”…

One of the biggest challenges for big grocery chains … is that the supply of gluten-free products is largely made up of small local and regional brands. “There are few dominant national brands, and consumers are very loyal to their local brands,” said Tim Mahan, general manager for Nature’s Marketplace. “Trying to strike a balance between having a meaningful assortment but still satisfying that loyalty is a challenge.”

The fractured market has created a bonanza for smaller food companies that do not have legacy processing plants laden with traces of gluten, a challenge faced by many major food producers. In 2011, for example, Smart Balance, an investor in small food companies specializing in healthful products, paid $66.3 million for Glutino, a gluten-free bakery operation.

A year later, it spent about twice that amount for Udi’s, another gluten-free baking operation. “Udi’s claim to fame was that he provided the first gluten-free bread you could actually eat — and that’s cracking a pretty tough code,” said Stephen Hughes, the chief executive of Boulder Brands, as Smart Balance is now known.

Last August, the Food and Drug Administration, which oversees food labeling, ruled that products labeled gluten free were permitted to contain no more than 20 parts of gluten per million, which made it more difficult for large food companies to get into the business. “You really need to have a captive facility because wheat floats,” Mr. Hughes said.

The full piece is worth a read; check it out here.

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