What is the true size of the gluten free market
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What is the true size of the gluten-free market?. The Size of the Market. Many products were gluten-free already Can the market provide ROI to justify entry? $2.64 billion at the end of 2010 Poor product quality affects sales negatively. The Size of the Market.

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What is the true size of the gluten-free market?

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What is the true size of thegluten-free market?

The Size of the Market

  • Many products were gluten-free already

  • Can the market provide ROI to justify entry?

  • $2.64 billion at the end of 2010

  • Poor product quality affects sales negatively

The Size of the Market

  • Only those with a true medical need

  • 18 million people with gluten sensitivities

  • 3 million with celiac disease

  • Domestic per capita wheat flour use is estimated at 134.7 pounds

The Size of the Market

  • 21 million households

  • 2.6 people per household

  • Whole families eat gluten-free

  • Emotional support – feelings of isolation

  • Products good enough for the whole family to enjoy

Is there a demand that is not being met?What is the need?

The Need

A demand not currently met offers opportunity

  • Fortification and nutrition

  • A bread good enough for the whole family to enjoy

  • Fresh bread / shelf stable bread available through mainstream distribution

  • Products with poor quality or limited availability

Can the need be met?What technology is available to allow for a competitive edge?

Gluten-Free Breads

  • Weak and crumbly grain structure

  • Poor volume and eye-appeal

  • Dense and uneven grain

  • Undesirable eating qualities, e.g. lack of flavor and aroma, dry mouth feel

  • Excessive packaging for longer shelf-life

  • Substandard nutrition for health and wellness

What Are Major Challenges to the Formulator?

  • Optimizing appearance

  • Reducing dryness and crumbliness

  • Improving flavor and eating enjoyment

  • Extending shelf life

  • Dough make-up and handling

  • Nutritional aspects

Watson Technology

  • Unique combination of starches and gums for increased gas retention

  • Proprietary emulsifier blends for appearance and texture

  • Blends of proteins for structure, flavor and palatability

  • Special blends of baking powders and yeast

  • Incorporation of nutrients (vitamins, minerals, fibers)

  • Extension of shelf-life

Watson Solutions . . . gluteNONE™ Mixes

  • Breads and rolls

  • Pizza crust, pocket pita, tortillas, bagels, pretzels, coffee cakes, English muffins

  • Donuts, crackers, sandwich thins

  • Cakes, brownies, cookies, muffins

  • Breakfast bars, waffles, pancakes

What would the potential profit models look like?

Profit Model

  • Gluten-free products can still be very profitable.

  • Gluten-free groceries cost about 79 percent more than traditional products.

  • Gluten-free bread can cost about $6 to $7 a loaf and have half the servings of an average loaf.

  • If they are not spending that money now they are going to pay down the road in health care costs.

  • Medical expenses can be tax deductions.

What are the latest developments in the gluten-free market?How much of the market is due to fad dieting?

Latest Developments

  • Media coverage and celebrities

  • National restaurants successfully offer gluten-free dining options

  • Grocery stores offering gluten-free lists on their websites

    • Gluten-free sections in grocery stores

    • Gluten-free private label offerings

  • Economic slowdown – consumers try dietary self-help when mainstream medical assistance is out of reach

Latest Developments

  • Trend dieters help increase demand for quality products

  • Trend dieters lead to the misconception that this is only a fad

  • Think of the 21 million households

Latest Developments

  • Over a third of products picked up from the Summer Fancy Food Show 2011 were flagged with the low/no/reduced allergen claim, with the majority of these (97%) marketed as gluten-free.

  • Major companies in the market

  • Celiac support groups

  • Gluten-free food fairs

  • Gluten-free phone apps

  • Gluten-free at sporting events

Latest Developments

  • Federal government finalizes regulatory criteria for gluten-free labeling

  • No wheat, rye or barley & under 20 ppm of gluten

    • Started in 2007

    • Comment period closed October 3, 2011

    • Targeting 3rd quarter 2012 to issue standard

    • Companies seeking to label their products as gluten-free will need to comply with the requirements

    • FDA enforcement tools

Can you pull all the resources together before the window of opportunity closes?

Producing Gluten-Free Products

  • Robust allergen program in place

    • Allergen materials labeled and segregated

    • Watson is a member of the Food Allergy Research and Resource Program (FARRP)

  • Wait at least 24 hours after running a product containing gluten, before running a gluten-free product

  • Positive pressure in production room

  • Avoid cross contamination – brushes, scoops, clothing


Pre-operational swabs

  • ATP Hygiene Test

  • Reveal 3D gluten test

    Product testing

  • EZ gluten test kit – Elisa Technologies

  • Samples sent out for testing – FARRP

  • R-Biopharm Gliadin test sensitive to 5 ppm gluten


  • Watson chose GFCO (Gluten-Free Certification Organization) – a program of Gluten Intolerance Group

  • Requires a questionnaire to be completed

  • Facility audit of equipment that will be used to produce gluten-free

What are the growth expectations for this market?

Growth Projections

While growth rates will slow over the next five years, Packaged Facts projects that U.S. sales of gluten-free foods and beverages will exceed $5 billion by 2015.

Factors Stimulating Expansion in the Gluten-Free Market

  • Increasing diagnoses of celiac disease and food allergies

  • Growing awareness of these ailments among patients, healthcare practitioners and the general public

  • More products and better ones

  • Interest from big retailers

  • Friends and family members eating gluten-free to support loved ones

The Gluten-Free Consumer

  • Totally incremental sales – they are not eating traditional baked goods now

  • Very loyal to a brand

  • Trust and credibility are very important

  • Whole families eat gluten-free in support of a single member

  • They know they need to pay more and understand why

  • Committed, well educated and want to have better access to quality food

Thank you for your time.www.watson-inc.com/GFinfo.php

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