How supermarkets are responding to the growing Free-From trend

January 5, 2017| by Amy Dunning

Did you know that the free-from market is now the fastest-growing food and drink category, currently worth £122.9 million? Food innovators say that the end goal is to help normalise the free-from shopping experience and ensure the food category is not isolating shoppers. But how are supermarkets managing the growth of the free-from market? Let’s take a look.

Who purchases free-from products?

Growth to the free-from market has stunned retailers as 27% of Brits now regularly shop in the free-from aisle, up from 19% in the previous year. The acceleration on the £99.9 million spent in 2015 on free-from products has been driven by the increase in free-from shoppers and innovative new products pushing up the prices by 0.9%. Interestingly, 31% of these shoppers say they purchase free-from products to help improve their general health, 27% say it’s a lifestyle choice and only 14% purchase free-from products due to an allergy or intolerance, for example, coeliac disease. When in comes to self diagnosis women are leading the way: one in five women say the reason they eat free-from food is because they suspect an allergy or intolerance, compared to the one in ten men.

As shoppers are still learning and experimenting with free-from foods, no evidence has been given to suggest that gluten free foods are healthier and nutritionally beneficial to consumers. However, Mintel research has suggested that 54% of free-from shoppers would stop purchasing free-from products if it was proven that they were more unhealthy than the standard offerings, for instance if they were higher in fat or sugar. Dr Reilly said that the growth in the free-from market is far greater than ever expected and has warned shoppers that purchasing free-from products could lead to spending more money.

How are supermarkets reacting to the growth in the free-from market?

Supermarkets have cottoned on to the fact that the free-from market is a key area of growth, and have reacted by expanding the shelf space and introduced designated chill free-from bays, to help manage the large volumes of new products. Schär Marketing Director Bradley Grimshaw calls the location of free-from products in supermarkets the ‘$6 billion question’. On one hand, a designated shelf space helps to provide shoppers with an easy shopping experience as all products relating to specific allergens are located in one place. However, bunching all the free-from products together creates a totally separate, isolated shopping experience that is not always easy to navigate, especially if consumers are shopping for lifestyle reasons.

There is no reason why supermarkets couldn’t standardise their fixtures and combine the free-from products with the mainstream products, as some would say this would broaden their appeal. From this, what is likely to happen is a reduction in price of free-from products as there will be unfavourable price comparisons with competitor products. For example, a Warburtons white bread, medium slice is priced at £1 for 800g, whereas Genius gluten free soft white loaf is £3 for just 535g. So not only is the gluten free bread more expensive, the size of the loaf is considerably smaller. Price remains a key barrier to wider adoption of free-from foods as 39% of Brits say it is too expensive compared to standard food.

But with a number of brands moving in on the free-from category, the migration of free-from products into mainstream fixtures has a certain inevitability about it. Particularly when you consider how wheat free and low sugar snack brands such has Nakd have capitalised on the removal of confectionery from checkouts, as well as being introduced into many meal deals in a number of supermarkets. For example, at the checkouts in Tesco, the shelves are filled with healthy eating products including Nakd bars, mini Graze boxes, popcorn and water, whereas a couple of years ago these shelves would have included bars of chocolate, crisps and fizzy drinks. Furthermore, a Sainsbury’s meal deal includes a sandwich, snack and a drink for just £3 and now offers a variety of products to help promote healthy eating such as fruit, Nakd cereal bars and gluten free cakes.

As the free-from market continues to grow and competition increases, it is expected that these brands will discourage the movement of free-from products around the store, as their prices will look comparatively higher and it will become increasingly difficult to promote their health-based value propositions. For example, Nakd Berry Delight cereal bars highlight that the bars are one of your five a day, contain 100% natural ingredients with no added sugar, 100% vegan and gluten, wheat and dairy free, but if this product was moved to the cereal bar aisle, it would be challenging for Nakd to compete alongside mainstream cereal bars. In a free-from section of a supermarket, the Nakd cereal bar doesn’t have much competition and the price will look pretty reasonable. However, if the free-from cereal bars were moved to the mainstream aisle next to the likes of Kelloggs and Alpen, the contrast in price will become much more apparent. For example, a pack of Nakd Berry Delight cereal bars costs £2.50 for four bars (so £1.43 per 100g), whereas a pack of Kellogg’s Special K Red Berry cereal bars is only £1.50 for five bars (93p per 100g). Some would say that it could be a huge risk for supermarkets to mainstream all free-from products, as it could have significant impact upon the shoppers experience and may be discouraged if the free-from foods are difficult to locate across the store.

As a result, supermarkets will be forced to formulate new strategies around the free-from market as and when innovative new products are brought to the supermarket shelves. Forecasts suggests that the free-from market will grow by 43% by 2020, so watch this space.

Thanks for reading! If you want to read more about grocery sector trends, take a look at our recent blog: What will the grocery sector look like in the 2020’s?.


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