What Consumers Are Avoiding: A Look at the ‘Free-From’ Market

The “free-from” movement in which consumers opt for foods that are free of specific ingredients has moved into the mainstream. Collective year-one sales of new foods/beverages touting “lower in,” “reduced,” or “free-from” claims totaled $1.6 billion in 2013, according to IRI’s 2014 New Product Pacesetters report.

Just over half (53%) of consumers watched their diet in 2013, according to Packaged Facts’ 2014 report, Food Formulation Trends: Ingredients Consumers Avoid. Two-thirds of consumers watched their diet for general health reasons; 55% to lose weight; 40% to limit fat, sugar, etc.; 38% to prevent future medical issues; 38% to maintain weight; 22% to treat a current medical condition; and 10% for a real/perceived food allergy or intolerance, explains Packaged Facts’ 2014 Weight Management: U.S. Consumer Mindsets report.

Six in 10 of the best-selling new foods/drinks introduced in 2013 offered less sugar or calories, up 6% over the prior year, and 23% had less fat, according to IRI. Slightly more than half (54%) of those watching their diet in 2013 bought low-fat foods, 37% fat-free/nonfat, 35% low-calorie, 33% sugar-free, 28% low-sodium, 24% low-sugar, and 23% low-cholesterol or low-carb, per Packaged Facts.

The latest wave of free-from foods involves avoiding ingredients associated with real or perceived food intolerances/allergies (e.g., gluten-free). According to the Packaged Facts avoidance report, food restrictions, intolerances, or allergies had a great deal of influence on the purchase decisions of one in 10 shoppers in 2013 and somewhat influenced 17%.

Nearly one-third of food shoppers tried some specialized diet/eating approach last year. According to the Food Marketing Institute’s (FMI) 2014 U.S. Grocery Shopper Trends report, gluten-free diets drew 8% of consumers; vegetarian 7%;  raw/living foods 6%; dairy-free 5%; and Weight Watchers 4%. One-third of shoppers say gluten-free is important to them; 11% look for it on labels, per FMI.

While current media and market attention would have us believe otherwise, the success and size of the majority of these new free-from/exclusion markets is, in reality, often grossly inflated. For example, an approach that estimates the scope of the market by tabulating gluten-free sales based on the presence of a gluten-free claim on packaging put its size at $24 billion in 2013. But when the market is better defined (to include only products formulated specifically to replace wheat flour and to exclude products that are naturally gluten-free), it is much smaller: $1.3 billion in 2013, by ConAgra’s estimate.

The Hartman Group’s 2013 Reimagining Health & Wellness report found that over half of those who purchased gluten-free foods did not know the product was gluten-free. And Technomic’s 2014 Consumer Healthy Eating Trend Report found that while 44% of adults believe that gluten-free foods are healthier, that is down from 60% who felt that way in 2012.

Four percent of U.S. adults are currently watching their diet because of lactose intolerance; 6.5% bought lactose-free foods in 2014, according to the Packaged Facts’ avoidance report.

Mintel’s 2013 Dairy and Non-Dairy Milk—U.S. report predicts that sales of dairy alternative drinks (e.g., soy, almond milk) will reach $2.9 billion by 2017. Reasons of health, taste, and nutrition were among the leading factors contributing to consumers’ decisions. Thirteen percent of moms interviewed in the 2013 Gallup Study of Children’s Snack Habits said their child avoids milk/dairy/lactose; the total had climbed by 5% over the past five years.

The Centers for Disease Control’s 2013 Summary Health Statistics for U.S. Children confirmed hat food allergies in children are on the rise; 4.1 million kids under the age of 17 suffer from true food allergies.

Food additives are a major consumer concern. Eight in 10 adults say that preservative-free foods are healthy, according to the Technomic report. Technomic research also shows that 78% of adults believe products that contain no artificial sweeteners are healthy. According to the International Food Information Council, one-third (33%) of consumers avoid aspartame, 27% avoid saccharin, 21% sucralose, and 16% stevia.

GMO-free is perhaps the most unpredictable free-from market. Half of consumers are aware of GMOs (genetically modified organisms), and 45% of those that are aware believe GMOs are unsafe, according to FMI’s 2014 Shopping for Health report.

Free-from looks like a strong trend in markets around the globe. Food intolerance was the second-fastest-growing global positioning for functional foods/beverages in 2013, according to Euromonitor. Innova Market Insights reports that new dairy-free product introductions grew 36% in 2013; Germany and Spain are the most active new lactose-free markets globally. GMO-free is important to 50% of consumers in Germany and 42% in Japan. 

A. Elizabeth Sloan,
Contributing Editor
President, Sloan Trends Inc.,
Escondido, Calif.
[email protected]