When The Allergy Show returned to London on July 1st, Event Director Tom Treverton set me a challenge: create and run a trade seminar which would keep a room full of B2B attendees interested and involved for an hour and three quarters. I decided to go one step further and make it a Powerpoint Free Zone. We used the well-known Any Questions? format – the Chair asks each panel member to answer a question in turn and then turns the subject over to members of the audience for their input. I devised my questions to explore six different subject areas to do with Free From, under the banner of Taking Stock – The UK’s Free From Market.
I was fortunate in being able to call on the services of three members of the Gluten Free Industry Association (which I Chair) namely
- Paddy Cronin – Sales Director, Nairns Oatcakes
- Liam O’Doherty – Gluten Free Senior Commercial Business Manager, Warburton’s
- Alexander West, Operations Director & Co-Founder, The Gluten Free Bakery
Our fourth panel member was Becky Liddell, who brought some invaluable retail perspective through her role as Free From & Home Baking Buyer at the Co-op.
I was worried before the session that we might run out of things to say but the reverse was true and we only just managed to squeeze in our final question. What follows is a highly abridged version of what we talked about. If you were there and you think I have omitted something crucial please let me know!
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- The Pandemic
Consensus was that the Pandemic has had some positive effects for all. In the absence of regular products such as pasta and bread some consumers bought their free-from equivalents for the first time. Sales data suggests that at least some consumers have carried on purchasing these free-from products. On the downside the Pandemic put enormous pressure on supply chains which in some cases prove insufficiently robust. Alexander gave the example of The Gluten Free Bakery which had to instantly swivel to online sales only – the online offer has continued even though retail and food service sales have resumed. A comment from the floor confirmed that coeliacs had found the Pandemic especially tough as non-coeliacs were buying all the gluten-free products in supermarkets. Paddy pointed out that Nairns lost all its food service sales when the out-of-home sector shut at the start of the Pandemic and these sales were only now starting to come back.
- Private Label
There was general agreement that private label and brands were mutually supportive in the Free From sector. The sector is unusual in that a lot of the innovation in the early days came from supermarket own-label (especially Tesco). With the cost of living crisis it was recognised that own-label can be one route to providing more affordable Free From products. It was also noted that supermarket developers have started eliminating unnecessary minor allergens, for example replacing wheat flour used as a thickener in sauces with corn flour or rice flour. This makes more products suitable for more people, although such changes do not tend to be heavily signposted so it means consumers carefully scrutinising the ingredients list.
NB the week after our seminar The Grocer published research by Kantar WorldPanel for the 12 months to w/e 17 April 2022. The annual UK market for Free From is now worth £3.17bn, having grown in value over the last 12 months by 1.5% value and 1.3% volume. “What would be relatively modest gains any other time is impressive now, given overall grocery’s decline against the bumper pandemic period. “ The average price per pack across Free From has risen only 0.4%. However this disguises a growing division in price between brands and supermarket own-label: the former is +1.5% whilst the latter is -3% year-on-year. Kantar client executive Isabella Baker notes that “brands remain the dominators, accounting for 69.7% of sales. Own label is making gains. Now holding 30.3% market share, it has grown in value by 3.5% compared to a 0.6% gain by brands.” This trend could deepen amid the cost of living crisis, Baker predicts. “As shoppers want to limit their spending and look for cheaper alternatives we may see switching to own label.”
- Plant Based / Vegan
This subject was the subject of our lengthiest discussion. Paddy made the case that the likes of Impossible Burger and Beyond Meat had helped develop the plant-based category to its current size by investing millions of dollars in product innovation and marketing in the expectation that the sales would follow. Free From has followed a more cautious trajectory with even the larger brands such as Mr Kipling being relatively parsimonious on the promotional spend on their Free From range. There was speculation that some of the lifestyle consumers attracted to Free From might have migrated to Plant Based.
- Instore Location
Another lengthy discussion. Liam made a plea for double siting – a presence on both the Free From fixture and the mainstream fixture – whilst admitting this was probably unrealistic, which Becky confirmed! Consensus was that the dedicated Free From fixture should persist, with volume sellers moved into the mainstream fixture, as has been done with non-dairy milks. An example of the importance of instore location was Mars, whose vegan bars had just been delisted by Tesco, Sainsbury’s and Morrisons after a row caused by the supermarkets wanting to move these bars from the Free From fixture to the mainstream fixture and Mars refusing.
- Responsible Manufacturing
There was considerable scepticism about successfully manufacturing Free From products anywhere other than a dedicated facility that is 100% free of allergens. As the Free From market matures dedicated manufacturing space is becoming the norm. Other recommendations were short supply chains and personally visiting key ingredient suppliers, with certification a useful approach if visiting a supplier was not feasible.
- International Trade
There was cautious optimism for overseas sales especially from Paddy as Nairns had just won a Queens Award for Exports! Recommendations were to look for markets where there was a sizeable U.K. expat community and find countries where the Free From market was not yet mature, for example Canada rather than the USA. It was felt that the UK tended to lead the Free From world in terms of innovation so that left UK companies well placed to develop foreign sales.
The Questions
- The Pandemic
How has the pandemic affected Free From?
Are things now better, worse or the same as they were in early 2020?
Who are the winners and who are the losers ?
2. Private Label
As the Free From sector matures is the continued growth of private label in supermarkets inevitable and / or desireable?
How do brands respond to the growth of private-label?Does more private label mean less product innovation?
3. The Cross-over with Vegan / Plant-based
How has the meteoric growth in sales plant-based / vegan sales affected Free From ?
What can Free From learn from the success of plant-based / vegan?
How can we reduce consumer confusion about these three different but connected sectors?
4. Instore Location
Where are your products located instore at present ?
Where would you like to see products located?
How will stores be retailing Free From in five years time ? (instore and online)
5. Responsible Manufacturing
What advice would you give to a manufacturer entering the Free From world for the first time?
How can you manufacture Free From safely from a mixed-use site?
What steps do you take to safely manage long ingredient supply chains?
6. International Trade
What criteria do you use in deciding which export markets to approach ?
Has Brexit impacted movement of goods between the UK and the EU (in both directions) ?
How do you see Free From developing outside the UK ?
SW 13.07.22