The Future of Free-From and Allergy-Friendly FoodsAugust 29, 2017
Grocery Headquarters | August 29, 2017 –Food retailers are increasingly well positioned for shopper wellness. As shoppers seek fresh, less processed claims and categories, they rely on food stores as among their most trusted allies for meeting their wellness needs.
That news, excerpted from FMI’s “Grocery Trends 2017” report, underscores the profit power free-from products – think non-GMO, gluten-free and allergen-free items – can wield.
It was less than a decade ago that free-from products started gaining traction with American consumers, says Carl Jorgensen, director of global thought leadership-wellness at Daymon Worldwide.
“Free-from positioning has been around for a long time, but as the use of the term ‘natural’ on labels became more of a liability, the ‘free-from’ proposition became more popular,” explains Jorgensen, whose expertise is in organic, natural, non-GMO, allergen-free, nutritional, sustainability and in-store wellness services. He equates the launch of Kroger’s Simple Truth brand in September 2012 as a watershed moment in the world of private brands.
Simple Truth is part of Kroger’s “Free From 101” brand tier comprised of products that do not contain 101 artificial preservatives and ingredients customers told the retailer they didn’t want in their foods.
Data Tells the Story
Consumers are increasingly turning to products that tout the absence of negative ingredients.
Claims such as low sugar, low sodium, no artificial ingredients and no preservatives are among the top health claims that shoppers seek, FMI reports.
Mintel and Euromonitor research echoes those findings.
Three in 10 consumers say they would pay more for non-GMO dishes, and two in five say gluten-free products are beneficial for everyone – not only those with a gluten allergy/intolerance/sensitivity, Mintel’s “Healthy Dining Trends US 2017” and its “Gluten-free Foods US 2016” reports show.
“We continue to see consumer demand in clean and allergen-free food products, with Euromonitor estimating that global sales of clean label foods/beverage will grow to $180 billion by 2020,” says Jason Cohen, the co-founder & CEO of Halen Brands, a company that focuses on helping small food and beverage businesses get distribution and grow market share, many in the specialty and better-for-you space.
Manufacturers are responding to consumers’ demands.
“Globally, the percentage of new product launches with ‘no additives/preservatives’ claims has grown to approximately 25 percent, compared to 18 percent in 2014,” Jorgensen says.
Health Concerns a Catalyst
Free-from has become the label of choice for healthconscious consumers. But why has it grown so quickly? “The first driver is the increase of people with allergies, both in families and acquaintances,” Cohen says.
“For example, a person may not have an allergy in their family, but a friend could have food allergies, so you have to constantly be aware of the food you have on hand or serve. Today, with one out of every four kids having some form of a food allergy, this is definitely a key concern of parents.”
The need to reduce inflammation is the second.
“We are learning that inflammation is the cause of so many illnesses – cancer, sinus issues or allergies, for avoid artificial flavors,” he says, citing Nielsen data.
Further, Jorgensen believes several other retailers aside from Kroger are also doing a good job with freefrom inventory.
“Ahold’s Stop & Shop Nature’s Promise brand makes a strong free-from promise that is promoted widely throughout the store using the actual term ‘freefrom’ on signage. H-E-B has recently launched its Select Ingredients brand with a clearly-defined free-from list that takes the forward-looking step of excluding ‘Nano Particle Technology ingredients,” Jorgensen says, noting that H-E-B has not removed GMO ingredients, but intends to label them in the future. And at present, Whole Foods is working to exclude GMOs from its Exclusive Brands portfolio by September 2018.”
Cohen, too, believes in the potential free-from offers.
However, he suggests that retailers take a more cautious approach to the category.
“Retailers need to proceed with caution and ask CPG companies for verification of any [free-from] claims,” Cohen says. “This is a space right now that is not regulated, so it is essential to ask for all food documentation to ensure that companies are operating to the highest standards. Right now, a company can say products are ‘nut-free’ but it doesn’t have to validate [that claim]. Retailers have a right to ask for verification and should make that the top priority in selecting brands to sell.”
Once you decide on your approach to free-from products, the next step is deciding how to merchandise and market them.
According to Jorgensen, there are two popular approaches – what he calls “the long-form and the short-form free-from promise.
“Some brands publish extensive lists of all the ingredients that are not contained in their products, and some publish shorter, bucketed ingredient lists,” he explains. “The shorter list is easier to communicate via in-store merchandising, but the long list may appeal more to the core wellness-engaged consumer. It depends on the retailer and their customer demographics. In any case, if your brands have a free-from claim, take credit for it, and your customers will respond.”
Clearly, free-from foods are having a moment. But do they have the kind of staying power that will bring benefits now and down the road?
“Absolutely,” Jorgensen says. “Health and wellness is more than a trend – it is the modern lifestyle. It is the brightest spot in retail, and free-from has clear appeal to the shopper looking for healthier options.
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