FIRST EDITION
THE TRUTH ABOUT GLUTEN FREE:
Market Size and Consumer Behavior
for Successful Business Decisions
David Sheluga, Ph.D., Director, Commercial Insights, Ardent Mills
Introduction
Our team has been
researching the glutenfree marketplace and
consumer since 2009.
What do “twerking” and “gluten”
have in common?
Answer: both were among the top five
most-searched words on Google in 2013.
In the past five years, “gluten” has steadily
advanced in consumer online-search
interest. It has become the hot topic in food
publications and business news. With a
market size estimated in the billions and
projections of continued growth, this is a
market worth close attention.
But is this hype or reality? Are sales of
gluten-free products in line with the
media and public interest? What does it
take to succeed in this category? Business
decisions require accurate information.
Wrong business decisions are made when
an opportunity is sized too large or too
small. Businesses have to get it right and
not be swayed by the hype. And it takes
meticulous attention to detail to get to
the most accurate answers.
1
Our team has been researching the
gluten-free marketplace and consumer
since 2009. In 2013 and early 2014, our
Commercial Insights group conducted
its most comprehensive review of
gluten-free sales data and consumer
information to date. The goal of this
comprehensive research is to provide the
most accurate size and trend of glutenfree product sales available anywhere,
and to yield the most detailed picture
of the gluten-free consumer. Together,
these pieces of information can help
businesses looking at entering or
expanding their offerings in the glutenfree market.
The truth about gluten free will
surprise you.
Part 1: The Gluten-Free Market
Defining
Gluten-Free
Specialty
Products
Ardent Mills defines gluten-free products
as those specialty products that are
intentionally directed to the consumer
who needs or wants to buy a substitute
for wheat-, barley- or rye-based products.
Our analysis focused on twenty broadly
defined gluten-free product categories,
ranging from bread, bagels and baking
mixes to pasta, pizza and salty snacks.
We included dry grocery, frozen and
refrigerated products. Specifically:
Ardent Mills’ analysis was a meticulous,
multi-month effort beginning with over
5,500 gluten-free product UPCs, identified
from actual sales data from leading sales
information companies (see below on
methodology). Products were examined
one by one, leaving 2,600 that met our
criteria for being a gluten-free specialty
product. Products eliminated were either
inherently gluten free (such as corn
meal), did not carry obvious gluten-free
package claims or were sold by diversified
companies that were not targeting the
gluten-free community with their product.
• Products that make an obvious frontof-pack gluten-free claim
• Products made by companies that show
a commitment to offering gluten-free
specialty products
Gluten Free is
Big. But Not
as Big as You
Thought.
Ardent Mills’ analysis started with gluten-free retail sales in Nielsen ScanTrack and
IRI Food/Drug/Mass Merchandiser stores (FDMx). Both sources were used as a
cross-check for thoroughness. We then progressed to the IRI Multi-Outlet (MULO)
store universe—which captures Walmart, warehouse clubs, dollar stores and military
commissaries. Finally, we progressed to the broadest store universe—IRI’s All Outlet.
This captures Internet purchases, health food stores and specialty stores, in addition
to the traditional stores captured in the MULO definition. The sales data are not
projected; the actual sales data, as provided by Nielsen ScanTrack and/or IRI, are used.
After we analyzed the 2,600 products
and their 2012 sales data, we calculated
that the market for grain-based glutenfree specialty foods totaled $831.8
million. This is a significant number
but far less than other estimates. This
number includes all places where glutenfree products could be bought: all
grocery, drug, mass merchandising, club,
dollar, military, Internet, health food
and specialty food stores. Ardent Mills’
Commercial Insights group confidently
believes that this is the most accurate
sizing of the gluten-free market and
advises that this number is the best
estimate for making business decisions.
Gluten-Free Specialty Products Annual Sales ($ millions)
Millions of dollars
Methodology
%
+40
013
9–2
200
h
t
row
al G
nnu
A
e
g
$831.8
era
Av
$616.4
$448.5
$320.4
$62.8
$257.6
2009
$189.6
$106.0
$1,029.9
$93.2
$71.0
$1,219.5
$725.8
$523.2
$377.5
2010
MULO
2011
2012
2013
Internet/Specialty
Source: IRI Worldwide. Total U.S. All Outlet Store Universe and MULO Store Universe.
Other published sources have estimated that 2012 gluten-free sales range from five
times larger—in the $4 billion range 1—to over $10 billion. 2,3 In our opinion, and based on
our analysis of how we define gluten-free products, these estimates neither accurately
portray the size of the market nor align with the size of the consumer audience for
gluten-free specialty products.
Methodology
Another important number we’ll reference is IRI’s MULO store universe, which shows
that gluten-free specialty products amassed $725.8 million in sales in 2012. This is
a narrower definition of places where gluten free can be bought; however, it is a very
useful definition given the depth and granularity of sales data available. At various
points in this report, we will quote insights from the MULO store universe.
2
Rapid Growth
All Outlet (Total
Market) sales
boomed to $1.2
billion in 2013.
Gluten Free
is a Highly
Niche Market
Average annual sales for gluten-free specialty
products grew 40% from 2009 to 2012,
advancing from a base of $320.4 million to
$831.8 million. A 40% annual growth rate is
consistent with the uptrend in sales quoted in
other published sources.1,2,3
We have just completed our 2013 gluten-free
sales update and remarkably, gluten-free sales
have accelerated. All Outlet (Total Market)
sales boomed to $1.2 billion, a gain of +47%
Gluten-free specialty products are a
highly fractured, highly niche market. Out
of the 2,600 products we identified, an
astounding 87% (over 2,200) have less than
10% ACV distribution in IRI’s MULO store
universe. In 2012, these 2,200 products
averaged only $91,000 in sales per product
annually. Although they account for nearly
nine out of every 10 gluten-free products
sold, they account for only three out of
every 10 sales dollars.
By contrast, there are only 18 glutenfree products that have over 40% ACV
distribution. These gluten-free products
have average sales in the $3 million to
$10 million range—large by gluten-free
standards, but highly niche by traditional
standards for consumer products.
Manufacturers are small too. We counted
403 companies selling gluten-free products
in 2012. Of these, 325 (81%) had total
manufacturer sales of less than $1 million in
2012. Further, there were only 17 out of 403
companies (4%) with 2012 gluten-free sales
over $10 million in IRI’s MULO store universe.
over 2012. Total sales were $387.7 million
higher in 2013 than in 2012. MULO stores
grew about as expected, advancing +42% to
a little over $1 billion. That’s a gain of $304
million over 2012. Unexpectedly, sales in
non-MULO outlets—which includes Internet,
health, specialty, Whole Foods, Trader Joe’s
and Costco—jumped +79%. This sector
generated $189.6 million in gluten-free sales in
2013, an $83.6 million increase over 2012.
Gluten Free by
the Numbers
$831.8
2012 All Outlet Sales
(Millions)
+40%
Average Annual Growth
Rate 2009–2013
87%
Gluten-Free Products with Less
Than 10% ACV Distribution
81%
Companies with Less
Than $1 Million in Sales
77%
Survival Rate from
2009 to 2012
1%
Average Size of Gluten-Free
Category to Parent Category
2.5%
U.S. Households That
Are Heavy Buyers
Unconventional
Survival Rate
Historically, a consumer product with low
sales is “here today and gone tomorrow.”
Grocers want products with strong turn
rates on the shelves, not products with long
purchase cycles and low sales.
Gluten-free specialty products are an
exception. They have proven resilient despite
their low sales rates. A staggering 77% of
products that existed in 2009 survived and
indeed grew into 2012. Only 23% fell by the
wayside. The “Class of 2009” not only had
3
staying power but also actually grew sales
25% annually from 2009 to 2012.
The incredibly high survival rate is a testimony
to the commitment of manufacturers that
offer gluten-free
products, the grocers
that serve the glutenfree community and the
consumers who commit
to a gluten-free diet.
Small Compared
with Parent
Categories
As of 2012, gluten-free specialty products
were averaging just 1% of the size of
their respective parent categories. For
example, gluten-free cookies and crackers
were 1.3% of the size of Total Cookies/
Crackers. The most successful categories
so far are gluten-free pasta (2.7% of the
size of Total Pasta) and gluten-free flour
(2.6% of the size of Total Flour) within the
IRI MULO universe of stores.
Some published sources have stated that
gluten-free products will be 5% to 10% of
the parent category in the next three to
five years. 4 However, this is very unlikely
given the 1% size in 2012.
Part 2: The Gluten-Free Consumer
A Small
Core of Loyal
Consumers Drives
Gluten-Free Sales
A small core of consumers—2.5% of U.S.
households—drives gluten-free specialty
product sales. They account for two out
of every three dollars spent on gluten-free
products, representing 68% of the $831.8
million in 2012 gluten-free sales. These heavy
core buyers spent $185 per household in
2012, buying an average of 48 gluten-free
specialty products per year.
2012 Buyer Behavior: Gluten-Free Specialty Products
Buying
Frequency
Number
of Items
Purchased
Annual
Spend
Total 2012
Dollars
(Millions)
% Share
of 2012
Sales
Light
2
$6
$120.0
14%
Medium
6
$24
$146.3
18%
Heavy
48
$185
$565.5
68%
$831.8
100%
TOTAL
Source: IRI Worldwide Consumer Household Panel
Further
Research
An additional 5.1% of U.S. households are medium buyers, spending an average of $24
per household in 2012. They account for 18% of the $831.8 million in sales and bought six
gluten-free specialty products on average in 2012. The amount they spend is less than 1% of
their total annual grocery purchases. They are not committed buyers of gluten-free products.
4
Households
Do Not
Eliminate
GlutenContaining
Products
Don’t Be Fooled
By Surveys
Only 2.5% of U.S.
households are heavy
buyers of gluten-free
products, and only 5.1%
are medium buyers.
One of the most common assertions heard in the
media is that when one person in a household
converts to a gluten-free diet, the rest of the
household converts.6 This is only partially
true. Based on in-home ethnographies, we
found many instances where family members
eat naturally gluten-free foods, such as fresh
meat, dairy, fruits and vegetables, with their
gluten-free family member(s). And we find they
sometimes share gluten-free specialty items,
such as gluten-free pizza, snacks or pasta.
However, our analysis of buying behavior
showed that even among those heaviest of
gluten-free buying households, they still bought
the same number of regular loaves of bread and
packages of cereal, pasta, muffins, bagels and
baking mixes as the average U.S. household.
There was no evidence that heavy gluten-freebuyer households always reduced or eliminated
gluten-containing products. In short, the rest of
the family did not convert to eating gluten-free
specialty products.
There is a world of difference between avoiding
gluten and buying gluten-free products.
Many surveys—including our early work—ask
consumers about reducing or eliminating
gluten. Those surveys suggest that 20% to 30%
of adults are doing so. However, considering our
data analysis, only 2.5% of U.S. households are
heavy buyers of gluten-free products, and only
5.1% are medium buyers. Buying behavior is
very different than surveys of people claiming to
be avoiding or eliminating gluten. And business
decisions should be based on actual or potential
buying behavior.
We followed up with consumers who claim
to be avoiding gluten for non-medical reasons
in our original survey questionnaires. We had
in-depth follow-ups with those who claimed
to avoid gluten for weight loss, general health
or well-being reasons. Something unexpected
5
Annual Pounds Bought of Parent Category
Regular, NonGluten-Free
Average U.S.
Household
Heavy GlutenFree Buyer
Household
Index
Pasta
15.1
17.2
114
Muffins
4.8
5.4
113
Crackers
17.7
19.1
108
Bagels
7.4
7.9
106
Bread
45.3
47.2
104
Baking
Mixes
12.1
12.3
101
Roll/
Croissants
8.2
8.0
98
Flour
18.1
16.9
94
Buns
10.4
9.2
89
Source: IRI Worldwide Consumer Household Panel
was uncovered through that process: avoiding
gluten does not mean buying gluten-free
products. These consumers, who often vaguely
knew what gluten was, were reducing bread,
sweet baked goods, cookies and other breadrelated products primarily for diet reasons, but
had no intention of buying gluten-free specialty
products. In all cases, gluten avoidance was
simply a by-product of higher-priority diet
choices, which centered on weight loss, sensible
eating, general health or well-being.
General interpretations of mainstream survey
results about gluten free are upside down.
Researchers are incorrectly concluding that
avoiding gluten is the driving motivation among
the non-medical-reason gluten avoiders.7,8 In
reality, gluten reduction for these consumers
is a secondary by-product of other, stronger
behaviors and motivations.
Conclusion
Implications for
the Future
Sales are driven
by a loyal core of
gluten-free buyers.
Ardent Mills
Ancient Grains
Contrary to commonly quoted sales
figures, the total market for gluten-free
specialty products was a more modest
$831.8 million in 2012. Sales are driven
by a loyal core of gluten-free buyers,
primarily those with celiac disease
or non-celiac gluten sensitivity. This
core group, representing 2.5% of U.S.
households, will remain (due to the
medical necessity) eating gluten free. As
diagnosis rates continue to improve, the
market for gluten-free specialty products
will continue to grow. However, this
community is finite in size. Eventually,
the market for those with celiac disease
and non-celiac gluten sensitivity will
reach its maximum.
Unlike the Atkins Diet™, there won’t be a
collapse in gluten-free specialty product
sales, although there will be flattening of
sales in the future. Don’t be concerned
about so-called “fad dieters,” who may
be avoiding gluten but aren’t buying
gluten-free specialty products. They aren’t
affecting gluten-free specialty product
sales, up or down.
These findings represent critical pieces
of the gluten-free puzzle for businesses
looking at entering or expanding their
offerings in the gluten-free market.
Although the market is niche, it’s not
without opportunity for those who
understand the people truly buying glutenfree products and their market potential.
Dietitians have warned that today’s
gluten-free foods can be higher in calories
and lower in nutrients than their glutencontaining counterparts. Ardent Mills
believes the future of gluten-free specialty
products is in offering more nutritious
products to meet the health needs of core
consumers. Among our grain offerings is a
wide range of Ancient Grains—amaranth,
millet, quinoa, sorghum, teff and
buckwheat—that are naturally gluten free,
provide whole grain nutrition and fiber,
and are available in a variety of forms,
including custom multigrain blends, mixes
and a gluten-free all-purpose 51% whole
multigrain flour blend. We work with
progressive companies to formulate with
Ancient Grains to provide more nutritious
choices for this market.
About Ardent Mills
Ardent Mills™—a new company, born from two industry pioneers: ConAgra Mills®
and Horizon Milling®—is a premier flour-milling company whose vision is to be the
trusted partner in nurturing its customers, consumers and communities through
innovative and nutritious grain-based solutions. Ardent Mills offers the industry’s
broadest range of flours, mixes, blends and specialty products, customized to meet
your needs and backed by unrivaled technical support, customer service and the supply
assurance of a coast-to-coast network of 40 community mills, along with bakery-mix
and bakery facilities.​To learn more about Ardent Mills, visit ardentmills.com.
References
1. Packaged Facts (October 2012), “Gluten-Free Foods and Beverages in the U.S.,” 4th Edition, p. 5.
2. Leahy, Bobbi, Sales Director, SPINS (October 2012), “Gluten Free Products: Trend or Here to Stay?,” Whole Grains on Every Plate Conference, San Antonio, TX.
3. Topper, Amanda, Food Analyst, Mintel International (September 2013), “Gluten Free Foods Executive Summary,” p.1.
4. Watson, Elaine (November 11, 2013), “5-10% of US Wheat-based Categories Will Be Gluten Free in 3-5 Years,” Food Navigator-USA, http://www.foodnavigator-usa.com/Markets/Boulder-Brands-5-10of-US-wheat-based-categories-are-going-to-be-gluten-free-in-3-5-years.
5. Cureton, Pamela, RD, LDN, Clinical/Research Dietician, Center for Celiac Research, University of Maryland (October 2012), “Gluten Intolerance and Celiac Disease,” Whole Grains on Every Plate
Conference, San Antonio, TX.
6. Strom, Stephanie (February 17, 2014), “A Big Bet on Gluten-Free,” New York Times, http://www.nytimes.com/2014/02/18/business/food-industry-wagers-big-on-gluten-free.html?ribbon-ad-idx=3&src
=me&module=Ribbon&version=origin&region=Header&action=click&contentCollection=Most%20Emailed&pgtype=article.
7. Hartman Group (September 2012), “Consumer Trend in Self-Diagnosis: The Gluten-Free Conundrum.”
8. Watson, Elaine (October 15, 2013), “Health/weight-conscious consumers are driving the gluten-free market, not celiac, says Mintel,” Food Navigator-USA, http://www.foodnavigator-usa.com/Markets/
Health-weight-conscious-consumers-are-driving-the-gluten-free-market-not-celiacs-says-Mintel.
9. Rettner, Rachael (March 11, 2013), “Most People Shouldn’t Eat Gluten Free,” Scientific American, http://www.scientificamerican.com/article/most-people-shouldnt-eat-gluten-free/.
KM0614
6
© 2014 Ardent Mills