Why You Should Watch the ‘Free-from’ Food Trend
The ‘free-from’ food category has been in existence for a good few years. It includes products that can be free from meat, dairy, gluten, GMO, lactose, sugar, or artificial ingredients. In the last two years, with the Covid-19 pandemic and global warming being such pronounced topics, some types of food got a red light as consumers globally are more concerned about their health and the planet. From being considered only an alternative for people who suffer from food allergies, this category of products became a real lifestyle choice. With the global pandemic coming to an end, issues with supply chains and Brexit resulting in higher prices and classifying these products as premium, let's examine if the growth trends for this category are set to continue.
According to ‘FMCG Gurus’ Top Ten Trends for 2022 report, consumers are taking a proactive approach to their health, looking for ingredients that will help boost their physical and mental wellbeing. The research found out that, in 2020, 20% of global consumers were gluten sensitive and 19% were lactose sensitive. Digestive problems have grown globally, and consumers perceive it can also have an impact on other areas of health. Therefore, it is not a surprise that, with the increased awareness of allergies caused by certain food, the ‘free-from’ category has flourished over the last few years.
The report also highlighted how eating and drinking habits are changing to reduce the impact on the planet. The two major concerns are carbon emission and global warming, which are highly connected. 73% of the polled admitted being attentive to the former and 71% to the latter.
Consequently, consumers are purchasing more food products that are free from animal sources even if they do not have any kind of health issue related to it. Research conducted by BordBia (Irish food suppliers association) in nine markets showed that 62% of consumers have already purchased ‘free-from’ products, and 67% of them reported purchasing them regularly.
“ In 2020, 20% of global consumers were gluten sensitive and 19% were lactose sensitive.”
These two movements in consumer behaviour tend to increase not only the number of vegans but also flexitarians. According to FMCG Gurus, the number of flexitarians, people who are seeking not to abstain but to moderate the consumption of animal-based food, is growing across the world and reached 24% of global consumers in 2021. They are looking for a healthier, more sustainable, and ethical lifestyle.
Therefore, big brands are taking advantage of these trends to strongly use them for marketing purposes. Alpro and Oatly, the two top brands of the ‘free-from’ category in 2020 and 2021, according to Nielsen, are doing it very well. They are not only doing plant-based ‘milk’ but creating a community of people engaged in the same cause, sustainability.
Nevertheless, the prices of many ‘free-from’ food products may still shock a lot of consumers. It is still considered a premium category and not affordable for a considerable part of the population. The higher price of gluten-free baked products, for example, results from the increased production costs required to produce them. Research, development and the use of non-conventional ingredients, which are usually more expensive, add to the companies’ cost and, consequently, to consumers. The bad news is that Brexit and Covid-19 have also contributed to worsening the situation.
“ Prices of many ‘free-from’ food products may still shock a lot of consumers. It is still considered a premium category and not affordable for a considerable part of the population. “
Rice flour is an ingredient that perfectly illustrates this situation as it is largely used in gluten-free baking. Shortages in the supply of rice flour caused by the impact of the pandemic in India and the EU sanctions on Myanmar, both rice producer countries, resulted in increased prices. Therefore, many businesses had no option but to also increase the price of the finished product.
Brexit has its chunk of responsibility due to the extra paperwork required when importing/exporting goods between Great Britain and the European Union. The new condition ended up causing delays in shipments, order lead times, and, consequently, affecting cash flow, as reported by Tania Vynokurova, co-founder of Superfood Bakery, to The Grocer.
The increase of supermarkets’ own label of ‘free-from’ food products has brought some balance to the high prices. In the United Kingdom, sales of own-label ‘free-from’ goods went up almost 25% and more than 30% in volume in 2021, which increased their share of the market by 1.2% to 29.9%. In 2020, Asda invested £6.2m in 62 own-label lines to reduce costs and make them more affordable.
Although supply chain disruptions, Brexit and own labels have put ‘free-from’ brands under pressure, they have not stopped investing in the development of new products. As reported by Kantar, 115 new ranges were launched between the summers of 2020 and 2021 in the UK.
Superfood Bakery has introduced their new Brownie Crisps, which are gluten and dairy-free as well as vegan. Genius Foods has invested even more in bringing healthy aspects to their products and launched their Gut Lovin’ bread line, which is the first bread in the UK baked with active culture to improve gut health, according to the brand.
Genius - Gut Lovin' (Retrieved from Genius Food)
Tideford Organics has added a range of 14 new products to be developed in 2021. The launch will be segmented into three sub-ranges: Superfoods, to support the mind and body’s natural health; Inspired, as the name says, is inspired by international cuisine’s best recipes; and Favourites, which is inspired by the British favourite soup flavours. Besides the new products, the brand is also relaunching its logo to showcase its organic and plant-based character on the packaging, making it clear to consumers.
Tideford Organics (Retrieved from Tideford Organics)
The ‘free-from’ category is the fastest growing in the food and beverage sector right now. In 2018, according to Allied Market Research, the global ‘free-from’ food market size was valued at $90.1 bn. By 2026, it is forecasted to reach $161.2 bn, registering a 7.7% compound annual growth rate (CAGR) from 2019 to 2026. The market is well fragmented and competitive, with major players accounting for only one-third of the revenue share, but there is still space for growth as the demand for this type of product continues to rise.
Despite the threats the category has been facing with Covid-19, supply chain disruptions, and Brexit, the demand for ‘free-from’ products is still growing due to the increased awareness of food allergies and environmental issues caused by animal-based food. Companies have been investing in research & development to increase and improve their ‘free-from’ offering, and supermarkets are developing more and more own-label lines. The big challenge for the category now is to create more affordable products to serve all consumers. Innovation will play a big role in this task.
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