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Global Trends & Opportunities in Free-From Foods

Global Trends & Opportunities in Free-From Foods. David Jago , Director of Innovation & Insight, June 2013. Agenda. FREEFROM FOODS WORLDWIDE What is happening in the UK versus the US The development of the global free from market

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Global Trends & Opportunities in Free-From Foods

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  1. Global Trends & Opportunities in Free-From Foods David Jago, Director of Innovation & Insight, June 2013

  2. Agenda FREEFROM FOODS WORLDWIDE • What is happening in the UK versus the US • The development of the global free from market • What does global launch activity tell us about the lifecycle of the sector • What is the experience of major players getting into free from • Is the market maturing or is there more opportunity for growth

  3. UK free-from market growth will slow but is still impressive UK retail sales of free-from foods, 2006-16 Source: Mintel Oxygen

  4. Consumer: significant purchase levels Types of free-from foods purchased (in last six months), UK, June 2012 Source: GMI/Mintel

  5. Lifestyle choices as important as allergy/intolerance in avoidance Foods/ingredients avoided, UK, June 2012 Source: GMI/Mintel

  6. Wider range in demand Attitude towards free from foods, UK, June 2012 Source: GMI/Mintel

  7. UK vs. US – growth similar, market definitions affect actual sizing UK gluten free sales (not including mainstream products labelled gluten-free but which did not contain gluten in the first instance) US gluten free sales (all products labelled gluten-free) Source: Mintel Oxygen

  8. ‘Gluten sensitivity’ & ‘health’ perception drives the US market • 14% of adults are potential or current users of GF food, either from need or want • Roughly 10% are current users, at least occasionally • Equates to more than 30m Americans who are current GF food users, and up to 40m who are a potential market • 40 million people is the current or potential gluten-free audience in the US Base: 3,000 internet users aged 18+ Source: Mintel Oxygen 8

  9. US market growth fuelled by salty snacks • Consumer desire for healthy snacks helped segment growth • Bread & baked goods, along with energy bars & salty snacks drove sector growth overall • US sales of select leading gluten-free food segments, 2009-11 SNACKS * 52 weeks ending Oct. 31, 2009, Oct. 30, 2010, and Oct. 29, 2011 Sales in FDMx, natural, and specialty markets only. Source: Mintel/SPINS/Nielsen 9

  10. NPD in gluten-free continues to show an upward trend New product introductions of gluten-free food & drink, globally, 2009-2012 Sauces, Snacks, Dairy & Bakery account for around 45%

  11. UK is one of the leaders in gluten-free NPD, but US dominance is clear New product introductions of gluten-free food & drink, 2010-12 (% share) Source: Mintel GNPD

  12. GF variants take an increasing share in NPD of cereal-based products Gluten-free penetration in launches of cereal-based products, 2009-2012 Certainly more potential in pizza/prepared meals, & beer Source: Mintel GNPD

  13. Big brands get on-board General Mills in the US has identified gluten-free as a “significant incremental opportunity” & has its own “community” consumer website promoting its ranges (GlutenFreely.com) Warburtons Gluten Free (UK, 2010) General Mills Cinnamon Chex Oven Toasted Rice & Corn Cereal (USA, 2012) Kellogg’s brown rice Rice Krispies (US, 2011) Sales in first year: $5m Source: Mintel GNPD 13

  14. Specialists expand Genius, a £10m gluten-free bread brand, for example, has expanded to more varied bread types, pies/pastries, pizzas, and cakes in the UK (and is also expanding internationally) Genius Gluten Free Tomato & Herb Pitta Bread (UK, 2012) Amy’s Kitchen US company now producing in the UK (UK, 2012) Dr Schär (2012) Expanding internationally Source: Mintel GNPD 14

  15. Leveraging the appeal of ancient grains and seeds The buzz around ancient grains & seeds has grown (especially chia) as they offer health benefits & a way to provide differentiation, as well as being gluten-free with sunflower seeds, millet, linseed, quinoa & poppy seeds made with quinoa, chia and millet Waitrose Love Life Free From... Seeded Thick Sliced Loaf (UK, 2012) Two Degrees Chocolate Banana Bar (US, 2012) Kez's Free Cranberry Choc Crisp with Chia (Australia, 2012) Source: Mintel GNPD 15

  16. The opportunity in beer Gluten free beers are growing in number • Among UK beer drinkers, 34% agree that they would drink gluten-free beers if they tasted as good as standard varieties while another 43% neither agree nor disagree (e.g. only just over 20% disagree) • Brands such as Green’s (in the UK, Europe & North America) are not just targeting coeliacs – as the brewer does not use gelatine-based products or Isinglass in the production process, the products are also suitable for vegetarians /vegans St Peter’s Gluten-Free Beer, UK Green’s Gluten-Free Beer, USA

  17. Naturalness important for gluten-free products Claims made by gluten-free product launches, 2009-2012 Source: Mintel GNPD

  18. Gluten-free using naturalness to aim to a wider audience Doves Farm Organic Gluten Free Stem Ginger Cookies (UK, 2012) Nature's Path Organic Crispy Rice Bars (UK, 2012) made using organic honey, good source of fibre, suitable for vegetarians, perfect on the go & contains no artificial additives made using artisan methods, organic, fairtrade, GMO free, free from additives & hydrogenated fat Source: Mintel GNPD 18

  19. NPD in lactose-free recovers from a first half 2010 dip New product introductions of lactose-free and lactose-reduced foods by major category, globally, 2009-2012 Dairy accounts for around 40% Bakery & snacks a growth area Source: Mintel GNPD

  20. UK a smaller player in lactose-free NPD New product introductions of lactose-free and lactose-reduced food & drink, 2010-12 (% share) Source: Mintel GNPD

  21. In Finland, lactose-free is in mainstream use across categories Valio Lactose Free Milk (2012) Laktoositon Oma Lactose Free Raspberry Ice Cream (Nestlé, 2012) Arla Ingmariini Lactose Free Fat Blend Spread (2012) Source: Mintel GNPD 21

  22. In Germany, specialist player Omira has a strong position with MinusL Lactose-free chocolate (2012) Gluten & lactose free bread (2012) Lactose free stuffed green peppers (2012) Source: Mintel GNPD 22

  23. In the UK, Arla’s Lactofree moves into ice cream “all the taste but none of the lactose of real dairy” UK, 2012 Source: Mintel GNPD 23

  24. Lactose-free is of comparable size to gluten-free in the UK • Since lactose intolerance is more widespread than coeliac disease or gluten intolerance, the category should – by rights – be correspondingly larger • Unlike gluten-free, lactose-free appears to be unable to garner the wider appeal beyond those with a medically-diagnosed condition • UK dairy/lactose-free market value, 2009-2011 Source: Mintel Oxygen 24

  25. Lactose-free dairy no longer just about soy Almond milk – moves from the US to the UK Source: Mintel GNPD 25

  26. US yogurt companies are hoping lactose-free is the next Greek yogurt Yoplait Lactose Free (US, 2012) Sales of $8.7m in first year Almond Dream Plain Non Dairy Yogurt (US, 2012) Kroger Plain Greek lactose reduced yogurt (US, 2012) Source: Mintel GNPD 26

  27. Coconut milk rises on the back of popularity of coconut water in the US So far coconut milk has not matched the growth of almond milk but reflects the growing number of non-dairy alternatives that offers variety to both cow’s milk users and non-users Silk PureCoconut Original Coconut Milk (US, 2012) Kara Dairy Free Original + Calcium Milk Alternative (Finland – also available in the UK) Trader Joe's Original Unsweetened Coconut Milk (US, 2012) Source: Mintel GNPD 27

  28. Ethical claims see growing use in lactose-free products Claims made by lactose-free product launches, 2009-2012 Source: Mintel GNPD

  29. Lactose free brands embrace ethical claim trends Moo Free (Finland, 2012) (note actually a UK brand) Naturata White Chocolate (Finland, 2012) Rice Milk with Chocolate Chips and Sour Cherries. This lactose-free, organic chocolate is climate neutral, & fair trade certified Mini Moos Scrummy Hunny-Comb Bars are an alternative to milk chocolate & are Fairtrade & Organic Source: Mintel GNPD 29

  30. We do not believe free-from to be a fad Increase in consumer base Source: Mintel 30

  31. We do not believe free-from to be a fad More & better ranges Source: Mintel 31

  32. We do not believe free-from to be a fad Harnessing other trends Source: Mintel 32

  33. David Jago Director of Innovation & Insight +44 20 7606 4533 djago@mintel.com

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