Elevation Brands CEO: Gluten-free bakery is saturated, but there’s a ton of white space in other allergy-friendly categories
Much of the double-digit growth generated by Framingham-Mass-based Ian’s - a leading allergy-friendly brand in the frozen case - last year was driven by strong velocity at existing customers, says Chuck Marble. But the figures also reflect distribution gains in conventional retail channels as buyers continue to allocate more space to natural and organic options in the frozen case (of which allergy-friendly is seen as a subset).
“The gluten-free baked goods area is pretty saturated, but with one out of 13 American kids with a food allergy, they have got to eat something beyond snacks, and we’re one of the few players that addresses food allergies in the protein space. That’s why parents love our brands.”
I think we’re going to see a category explosion [for gluten-free] in Mexico over the next six to eight months
As for new routes to market for Ian’s, he adds, “We recently spent all week at a sales event on the west coast called ECRM and we were approached by several Mexican companies that are saying that gluten free is really resonating out there, and retailers are ready to bring in new products. I think we’re going to see a category explosion in Mexico over the next six to eight months.
“But we’re also seeing a great deal of interest from c-stores and club - channels that historically have not been such an opportunity for these products. Foodservice and schools have also taken off tremendously - some educators are actually buying products at retail so they can serve people with special dietary needs in their schools, so we’re now trying to reach these people. [Demand from] colleges and universities has also exploded as well.”
Ibotta app helped identify heavy users of the Ian's brand
So who’s buying Ian’s products?
Data gleaned from the smartphone app ibotta– which, among other things, enables users to unlock cash rewards on selected products by completing simple tasks– shows that the heaviest purchasers of Ian’s’ products are Moms aged between 24 and 34, says Marble.
“So, as a consumer you could get, say,75 cents off an Ian’s product, but if you want a dollar off, you have to share some information on the ibotta app, which helps us understand who is buying our products and where.”
However, people aren’t just buying Ian’s products for their kids, he says.
“We’re seeing more adult-onset allergies, so we’ve really morphed into a family-friendly brand with products for everyone.
“In the appetizers and entrees category there are a lot of products that people with food intolerances can’t eat –fish sticks, onion rings, chicken nuggets - because of the breading system, so we’re in everything from gluten-free sausage pan-crepes to corn dogs, croutons, breadcrumbs, sweet potato sticks and stuffing mix. We’re in categories people with an intolerance to gluten have not historically been able to participate in.”
Terminology: 'There’s no such thing as an allergy-free product'
While Ian’s is known for gluten-free, it generally tries to avoid as many of the ‘big eight’ allergens as it can within any given formulation, says Marble, who describes his brand as ‘allergy-friendly,’ rather than ‘allergy-free.’
“We are careful to talk about allergy-friendly foods; there’s no such thing as an allergy-free product. The FDA has identified eight allergens you have to label but there are more than 100 allergens, so if you state that your product is allergy-free, you could get yourself into trouble. It’s a dangerous proposition.”
Three pillars to the Ian's brand: Free-from (clean-label), transparency, and allergy-friendly
Retailers, meanwhile, tend to see allergy-friendly as a subset of the natural and organic category in the frozen set, although the debates about how and where to merchandise products most effectively are ongoing, he says.
“We look at our brand as having three pillars.
"The first is free from – as in free-from artificial colors, preservatives, and so on, so it’s all about being clean-label and minimally processed – as the word ‘natural’ doesn’t really mean much anymore. The second pillar is transparency. Is your protein GAP-rated, is your seafood Marine Stewardship Council certified? That’s becoming more and more important. And the third leg is allergy-friendly, which is where we really differentiate ourselves from other brands in the frozen category.
“But as a lot of the big brands are now getting into these spaces, the lines are blurring between the big conventional brands and the traditional natural brands and some retailers are looking at integrating the natural sets with the mainstream category.”
For a brand like Ian’s, which has products across multiple categories, there is also an ongoing debate about merchandising, he adds. “Do we want to be brand blocked, or do we want to be a smaller player in several bigger segments? Some retailers are willing to test with us and others are not.
“Kroger does a fantastic job I think because it is willing to take risks and discuss different merchandising options to see what works.”
According to FARE (Food Allergy Research & Education), one in 13 children in the US has been diagnosed with a food allergy.
'We’ll continue to see migration from natural to organic'
As smaller brands that have traditionally played in the ‘natural’ space see legacy brands encroach on their territory, meanwhile, more of them may seek to go organic in order to retain a clear point of difference, he predicts.
“I think we’ll continue to see migration from natural to organic as it’s underpinned by clear standards.”
What’s the size of the gluten-free prize? It depends who you ask…
While Marble keeps an eye on market reports on allergy-friendly foods, market researchers all define the markets differently, which can make the data challenging to interpret, he says.
Mintel, for example, includes anything with a gluten-free label claim (including products that might be naturally-gluten-free) in its gluten-free market definition, while Euromonitor limits its definition to products that have been specifically formulated to replace wheat flour such as bread and cookies, and doesn’t include products that are naturally gluten-free or have undergone minor formulation changes such as Chex cereals or Rice Krispies.
If you’re just using label claims to define a category (eg. everything with a gluten-free claim), meanwhile, scanner data can be misleading because it doesn’t provide any insight into purchase intent (did you really buy that bar because it was gluten-free or because you like the brand and it happens to gluten-free?), he acknowledges.
“You have to read the fine print to understand what all the market researchers are claiming; some people think [the US gluten-free market] will be 2.3bn by 2019 and others say $7bn by 2019. All I can say is that there are 100m Americans that are avoiding certain allergens, and that's a huge market.”
