Canada’s gluten-free market surges: Packaged Facts

Over the last five years, Canada’s gluten-free market saw an impressive compound annual growth rate of 26.6%, fueled by growing awareness of celiac disease and gluten intolerance, increased availability of gluten-free products at mainstream retail outlets (Sobeys and Atlantic Superstore, to name a few), and improved product quality.

Indeed, almost half of Canadian consumers surveyed for the report believe the quality of gluten-free products available has improved considerably in recent years, though nearly 25% felt certain types of products still need improved quality, taste or variety. 

Less likely to be a recurring diet fad in Canada​

Unsurprisingly, the power of the celebrity cannot be ignored. The spate of celebrity endorsements—from Oprah to Miley Cyrus—of gluten-free diets as “healthier” has also contributed significantly to demand and will likely remain a key contributor to sales growth for 2013, according to the report.

Whether they heard it from Oprah or elsewhere, roughly one third of consumers surveyed said they consider gluten-free products to be generally healthier than their gluten-containing counterparts, while one quarter purchase gluten-free foods to help manage their weight.

The report’s authors attribute this perceived 'health halo' to several possible factors: 

“​Many GF specialty marketers operate according to principles associated with healthful food; consumers may have initially become aware of the category while shopping at health/natural food stores; and ‘free from’ suggests what the food does not contain is somehow undesirable."​.

Compared to their U.S. counterparts, a higher percentage of gluten-free product users in Canada report purchasing gluten-free foods because someone in their household is gluten intolerant, or has celiac disease, or a gluten or wheat allergy. In addition, more respondents in Canada purchase gluten-free products to deal with celiac and treat other diseases, which suggests that “gluten-free is much less likely to be a cyclical diet fad in Canada as compared to the U.S.,” ​according to the report.

In line with these findings, the report cited that demand tied to consumer perception of healthiness of gluten-free products is expected to wane in late 2013 or early 2014. By 2016, gluten-free market growth is projected to slow to the single digits, centered on Canada’s base of celiac and gluten-intolerant consumers. Still, retail sales are on track to reach $549.8 million in 2013 and more than $811 million in 2017, with a projected CAGR of 10.2%.

Snack foods still king​

Canada’s largest gluten-free products category for 2012 was snacks, which accounted for $127.1 million, or 27.7%. Not far behind were the breads/cereals/grains (24.8%) and frozen/refrigerated prepared foods (20.5%) categories.

A few large players continue to dominate sales in most gluten-free food categories. Boulder Brands (the firm behind gluten-free giants Udi’s and Glutino), Kinnikinnick, Food Directions, Nature’s Path, Bob’s Red Mill and Amy’s Kitchen are among the market leaders.

Interestingly, an analysis of gluten-free Google searches found the most common product categories searched were gluten-free bread, desserts and beer, which shows both that there’s room for improvement in these products as well as untapped potential in these categories.