Gluten Free & Free From August 25, 2014 Natural & Organic ECRM San Diego, CA
Agenda Gluten Free Overview Free From Opportunity Free From Execution Q&A 2
Gluten Free Overview
The Facts About Celiac Disease • Celiac Disease is a digestive disease that damages the small intestine & interferes with absorption of nutrients from food. • When those with Celiac Disease eat foods or use products containing gluten, their immune system responds by damaging or destroying villi . • Villi allows nutrients from food to be absorbed through the walls of the small intestine into the bloodstream. • Without healthy villi, a person becomes malnourished no matter how much food one eats. 4 Source: University of Chicago Celiac Disease Center; NFCA Celiac Center
The Gluten Free Consumer Base is Large The size of the gluten-free market has been reported at 21 million households with 2.6 people per household (totaling 54.6 million consumers or 17% of the U.S. population). 35 million (12-15% of US) health and wellness consumers (check food labels, buy natural/organic, eat healthy, have food allergies, are Health weight-conscious) Seekers 45 million (20% of US) Other diagnosed conditions Chronic Conditions (asthma, IBS, ADD/ADHD, migraines, autism, Crohn’s disease) Gluten Intolerant 40 million (17% of US) non-celiac gluten intolerant Celiac Disease 3 million (1% of US) celiac disease (diagnosed and undiagnosed) 5 Source: MRI, Dr. Fasano 201, Gluten-Free Market Webinar; srginspired
Gluten Free Growth is Explosive GF foods & beverages are a $10.5 BILLION Breads, Cookies, & Snacks are the largest industry. The market 44% from 2011 – 2013. categories, with $2.5 BILLION in sales in 2013. Natural supermarkets including Whole Foods July 2012 – July 2013 saw 1,516 new GF & Trader Joe’s saw gluten -free sales hit $1.1 product introductions. BILLION in 2013. 6 Source: Progressive Grocers February 2014
Gluten Free Consumers are There survey respondents ages 18 – 24 of respondents eat GF foods to help currently eat gluten free foods. them in their weight-loss efforts. of women agree gluten free products are worth the extra cost. 7 Source: Progressive Grocers February 2014
In-Store Options are Endless 37% of consumers believe manufacturers should More than ONE in 10 consumers say a mobile not label products as GF if they never contained app to help locate GF products would impact gluten in the first place. their purchases. of consumers say in-store items such as shelf 51% of consumers say dedicated aisles in stores tags, designated aisles & lists of products are would influence them to purchase GF foods. likely to influence their purchases. 8 Source: Progressive Grocers February 2014
16’ Gluten Free (Excluding Free From) First 4’ Second 4’ Third 4’ Fourth 4’ Crackers Cookies Baking Bread • Absolutely GF • Pamela’s • Bob’s Red Mill • Ener-G • Wellaby’s • Glutino • Pamela’s Soup & Prepared • Glutino • Midel • Gluten Free Pantry • Gluten Free Café Snacks Granola & Cereal Pasta • Mrs. Leepers • Ener-G • Bakery on Main • Tinkyada • Sam Mills • Mary’s Gone Crackers • Udi’s • Ancient Harvest • Storehouse Foods • Glutino • Glutino • Sam Mills • Gillian’s 9
Free From Opportunity
Free From Celebrate and enjoy delicious food carefully produced without common allergens. free from: 90% Gluten Free + of all allergies Source: National Digestive Diseases Information, March 2012; HealthCare Zone 03/12; National 11 Foundation for Celiac Awareness, 2011; FoodAllergy.org ; American Academy of Pediatrics, 2011
The Free From Consumer Base is Increasing Other Food Allergy Sufferers Celiac Sufferers 130 Million Consumers 3 Million Consumers 1990 2012 <1 in 50 children 1 in 10 children <.75% of Americans 4.0% of Americans 12 Source: American College of Gastroenterology, October 2011; Elucidare, January 2011
Food Allergies are on the Rise • Genetic Setup • Peanut Roasting • Hygiene Theory • Early Exposure – Our immune system is – 4-6 months of age for bored! solid foods… 13
Consumers are Looking for Product Have-Nots 64% Ingredients added for special health benefit (e.g. fiber) 61% Higher in nutrients (e.g. protein) 60% Ingreidents I recognize 60% No trans fats 57% Lower in calories 57% Lower in salt 56% Made w/ simple, real ingredients 54% Made w/ natural ingredients 50% Absense of artificial ingredients 49% Absense of artificial sweeteners 48% No high fructose corn syrup 46% Absense of preservatives 45% Absense of artificial flavors 41% Absense of artificial colors 41% Shorter list of ingredients 36% Absense of allergen ingredients (e.g. gluten, nuts, dairy) 14 Source: Hartman Group 06-2013
Food Allergies in the News At least 15 states have guidelines for management of food allergies in schools 15
Free From Execution
Free From Execution at Retail 17
Free From Execution: Facts & Dates • Marketing team presentation to retailer: February 2013 • Implementation at retailer: October - November 2013 – 58 stores – 4’ sections – 53 SKUs – 10 brands • Enjoy Life • 123 Gluten Free • Sam Mills • Cybele’s • Mary’s Gone Crackers • Cooksimple • Pascha • Home Free • Pure Bar • Goody Good Stuff – Replaced dietetic (sugar free) sections 18
Results: Free From Driving Overall Gluten Free Category Growth Every month Free From post implemented in implementation October 2013. the new set including Free From has Sales/SKU/POD outperformed for Free From PY Gluten Free only SKUs sales. averaging $56.38 since implementation All Gluten Free Sales – including Free From – Sales/SKU/POD spiked in April for All Gluten just prior to Free SKUs – Celiac including Free Awareness From -- Month - up 66% averaging YOY post $28.35 during Month 10 11 12 01 02 03 04 05 06 07 08 09 implementation. Year 13 13 13 14 14 14 14 14 14 14 14 14 same period Note: GF assortment was not reviewed at the same time. The changes are a direct impact of FF implementation. 19 Source: KeHE internal data through May 2014
Free From Significantly Outperforming Dietetic Program • In the first 7 months of free from (excluding October due to initial order spike), sales are still 48% higher than the same time frame PY for dietetic. 20 Source: KeHE internal data through May 2014
How to Approach the Free From Opportunity at Retail Easier Moves 1. Focus on winning BRANDS & plug winning ITEM gaps 2. Develop annual PROMOTION & ADVERTISING program in support of winning brands • Nail key SELLING PERIODS including shippers & pallet modules 3. Create dedicated free from SECTIONS • Label section & items with appropriate SIGNAGE • Provide shoppers with necessary EDUCATIONAL MATERIALS “All In” • Build PARTNERSHIPS with local allergy support groups 21
Free From Brands Bobbie Swenson Don Braun (312) 927-6066 (401) 489-4935 bswenson@enjoylifefoods.com don.braun@drschar.com Mike Peterson Bill Germano, President (678) 226-4200 (757) 233-9495 mike.peterson@kingarthurflour.com bill@drlucys.com 22
Promotions & Advertising Increases Awareness Focus on one major allergen per promotional period. Gluten free advertising with additional major allergen call-outs.
Nailing Key Free From Selling Periods Seasonally May: Celiac Oct: Gluten Free Back to School Relevant Awareness Month Month 24
Bars & Snacks • Enjoy Life 8’ Free From Assortment Cookies • Lucy’s • Enjoy Life • Home Free • Dr. Schar • Kinnikinnick Bread & Baked Goods • Dr. Schar Baking • Namaste • King Arthur • Ian’s Natural • Orgran Granola & Cereal • Enjoy Life • Freedom Foods Prepared • Cooksimple • Allergaroo • Bonavita 25 Note: All items in the FF set are free from gluten + 4 of the top 8 allergens
Awareness: Brochures & Support Groups Food Allergy Support of Sacramento • www.sacfoodallergy.org The Saddleback Church Parents of Children with Food Allergies Support Group • www.ocfoodallergy.com San Francisco Bay Area Food Allergy Group • www.sffoodallergy.org SPEWD: Free Food Allergy Support Group • www.meetup.com/SPEWD-Free-Parents- and-Children Allergy Support Anaphylaxis Prevention • yael@anaphylacticallergy.com 26
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