MARKETING: Gluten-free trend embraced
LONDON — Grain sellers want to have their glutenfree cake and eat it, too.
As the stretchy protein found in wheat and other grains has become the latest dietary bogeyman, sales at companies like General Mills Inc., Kellogg Co. and Britain’s Warburtons Ltd. have come under pressure. Yet instead of fighting back against what many dietitians contend lacks scientific grounding, they’re boosting output of pricier gluten-free foods while leaving industry groups to defend their traditional products.
Less than one per cent of Americans have the disorder that requires a gluten-free diet, yet nearly one in three now eschews gluten, according to trend watchers NPD Group, influenced by bestselling antigluten books and celebrity endorsements. The U.S. market for gluten-free foods will climb from $4.2 billion in 2012 to $6.6 billion by 2017, according to researcher Packaged Facts, as bread bakers, craft-beer makers and eateries from Hooters to Michelin-starred Hakkasan embrace the trend.
“Consumers, rightly or wrongly, have made a connection between gluten-free and healthy,” said Nicholas Fereday, an analyst at Rabobank. “Grain companies are hoping this trend crashes and burns sooner rather than later. But any trend is a marketing opportunity.”
General Mills, the Minneapolis-based maker of Cheerios, has transformed most of its Chex cereal brand into a gluten-free offering by replacing barley malt syrup with molasses. Sales of Chex have jumped by at least 10 per cent in each of the past three fiscal years, while the $6-billion breakfast cereal category has remained stagnant. The company makes more than 400 gluten-free products, including versions of its Pillsbury cookie dough and Betty Crocker mixes.
Wheat flour consumption has fallen to a 22-year low, according to the U.S. Department of Agriculture. That’s at least partly due to the work of gluten-free advocates like William Davis, author of 2011’s Wheat Belly, and David Perlmutter, who released Grain Brain this year. Davis calls wheat “the world’s most destructive dietary ingredient,” while Perlmutter says grains are a “terrorist group” that “are silently destroying your brain.”
Doug VanDeVelde, a senior vice-president at Kellogg’s U.S. Morning Foods unit, counters that grains “can play a key role in a balanced, nutritious diet.” Kellogg, of Battle Creek, Mich., unveiled gluten-free Rice Krispies in 2011. PepsiCo Inc.’ s Doritos Nacho Cheese Tortilla chips went gluten-free the same year.
“We’re responding as we think we should,” said General Mills spokeswoman Kirstie Foster. “There’s a new diet book every week, and most of them really should go without comment.”
Mark Lang, a food marketing professor at St. Joseph’s University in Philadelphia, says grain producers won’t criticize the antigluten authors for fear of fuelling sales of their books or offending those with celiac disease who really must avoid gluten. Celiac sufferers produce antibodies to attack gluten, causing damage to the intestines and illness, according to the University of Maryland Center for Celiac Research.
Grain companies are making the most of the dietary shift. On Amazon. com, gluten-free Rice Krispies costs 29 cents per ounce, versus 17 cents for the original kind. Warbur- tons’ gluten-free bread is about $8 per kilogram, more than twice the price of its regular bread.
While Warburtons didn’t respond to requests for comment, other bakers say the higher prices reflect the additional costs to produce gluten-free foods, which have more ingredients and must be made in separate plants to prevent commingling.
“My profit margin is about the same on glutenfree bread, but the dollar profits per loaf are much more,” said Mark Blacker, sales and marketing director of Continental Baker in Reading, England.
The reluctance of grain producers to defend gluten surprises Michael Pollan, author of The Omnivore’s Dilemma and Food Rules: An Eater’s Manual.
“The industry has been flat-footed in their response,” Pollan said. “They should be reminding people that gluten is protein, generally thought of as a healthy nutrient, compared to fats or carbs.”
This isn’t the first time grain makers have been dragged through the mud. Fifteen years ago, diets that limited carbohydrates sent sales of white bread and pasta plummeting. Out of that crisis rose industry associations like the Whole Grains Council, which encourages consumers to eat more brown rice and whole wheat bread and counts General Mills and PepsiCo’s Frito-Lay snack unit among its members.