The gluten-free (GF) market has peaked. Moreover, within the past two years, it has failed to attract new users. In August 2012, 18% of consumers bought a GF food/drink in the past 3 months, up only 3% vs. 2010, according to Packaged Facts’ October 2012 “Gluten-Free Foods in the U.S.” report.   

Just more than one-third of users (35%) buy GF foods due to a belief they are generally healthier (the #1 reason for purchase) down from 46% two years ago. Those buying GF products due to a perception they are of higher quality also fell from 24% in 2010 to 18%, Packaged Facts reported. The proportion of consumers who think GF is a gimmick doubled during this period (11% to 24%); one in five say GF is a fad.
 
But, despite these increasingly negative attitudes, the short-term future remains bright. Nearly nine in 10 users say they are buying more GF products than two years ago. With such high price points, not surprisingly, Packaged Facts projected sales will grow from $4.2 billion in 2012 to $6.68 billion in 2017.  

However, as the market settles into servicing those who must remain medically gluten-free long-term, despite high repeat purchases, growth rates are projected to drop to 10% in 2012-15 and 7% in 2016-17 (Packaged Facts, 2012).

With four in 10 buying GF products for reasons not related to gluten, up 7% in the past two years, per Packaged Facts, scanner sales data/market size remain highly inflated. With a doubling to 55% of users complaining GF foods are too expensive and private label GF products mainstreaming onto the market, market growth/size could be smaller still.  

Lastly, and perhaps most importantly, the GF movement—according to the 2011 Gallup Study of the Market for Gluten-Free & Wheat-Free Foods—has identified a new group of “left out” consumers, quietly suffering from GI issues (e.g., IBS and Crohn’s disease), who had temporarily turned to GF for solutions. They’re clearly worth getting to know.  

Market Potential

According to Sloan Trends’ TrendSense model, the marketability of GF appears to be slowing. While flirting with becoming a very large Level 2 mass market, similar to omega 3s and vitamin D, GF’s Medical Counts are at a low level for a Level 2 market (5,000 vs. 20,000 for vitamin D) and are unlikely to support further growth without further stimulation. Importantly, this situation signals an artificially inflated market.

The perception that GF is healthier is clearly the top market driver. Although the gluten/health connection is in and of itself an accelerating Level 1 mass market, it too is supported by very low Medical Counts—and is also likely inflated and somewhat vulnerable longer-term. Although accelerating, Medical Counts have barely crossed the Medical Threshold. To qualify as a sustainable trend vs. a fad, Medical Counts must escalate and remain strong.    

Although not of mainstream status, the strongest and most sustainable market long-term is the medically supported segment of the gluten-free community that is the celiac patient. Medical Counts for gluten/celiac are fast accelerating, driving the condition-specific market segment further into Popularization, indicating a strengthening and excellent market opportunity, with optimal timing for specialty channels and among very health conscious/condition-specific consumers. The gluten/digestive market remains a less powerful, but still well timed, specialty opportunity.

Gluten/allergy and gluten/weight are perfectly timed for promotion in the specialty market, but remain fad-like, according to TrendSense. Gluten/kids issues, which had received a lot of play when tied to diseases a few years ago (e.g., autism by Oprah in 2006), have also fallen back into their fad-like state. TrendSense charts (not shown here) indicate that attention-deficit disorders (ADD/ADHD) are still one connection hanging on.