What recall? Free from up a cool £100m

Free-from continues to charge ahead like a freight train, with the £90.5m growth we reported a year ago dwarfed by the extra £99.9m put through the tills in the past year. That’s in spite of a product recall by number-one gluten-free bread brand Genius and one of the lowest contributions to growth from NPD in this year’s report. How has it done it?

Alpro has delivered almost a quarter of category growth in the past year. “People now understand the role of dairy alternatives and free-from as a whole,” says marketing controller Vicky Upton. “That’s been crucial because it’s opened up a whole new set of consumers. Alpro is an established pioneer with a large market share, but the category itself is in its infancy. There’s a load of headroom.”

Alpro’s established almond drinks, supported by a TV campaign, have been a key growth driver. Other activity included a collaboration with London Fashion Week, which offered what Upton calls a “fantastic like-minded audience”, for a multifaceted digital campaign. The launch of Almond and Coconut big pot yoghurt alternatives also paid off. 

Alpro isn’t the only dairy alternative brand to have got the cream this year; the dairy-free sector grew 26.7% overall. Arla’s Lactofree, up 23%, expanded its range with grated Cheddar and a chocolate dairy drink, while Almond Breeze, which moved up the table to 11th, launched a reduced-sugar variant. 

“Today, many consumers have multiple milk alternative products in the fridge or cupboard, and the milk alternatives market is valued at £198m,” says John Beadle, MD of owner Blue Diamond Consumer Brands Europe. “Almond Breeze Reduced Sugar is the first of its kind in the UK in terms of reduced sugar, helping to retain our point of difference compared with own-label products.” 

The growth of the dairy-free sector was exceeded only by gluten free, up 30.8%. “Growth is coming from a broad range of areas, including milk, breakfast, bakery, snacks and frozen prepared foods,” says Nielsen analyst Andrea Gilbride.

Despite the June recall of 22 products including pizza bases and crumpets over fears they had been contaminated with gluten, Genius has added £9m to sales, a rise of 46.4%, and remains the biggest bakery brand in the category. “Data suggests the recall hasn’t had a major impact on wider sales and we are working hard to rebuild consumer trust,” says sales director David Shaw. 

The brand’s core bread range (revamped in September with new recipes) is, says Shaw, driving growth for Genius and the category. “Our Triple Seeded Sandwich Loaf alone has delivered £3.7m and is the true hero of the free-from bakery category. It’s important to note the majority of growth is coming from established lines rather than NPD.”

Indeed, increased space in store for existing lines is the most significant factor in the sector’s growth. “NPD played a very small role in free-from over the past year,” adds Gilbride. “Existing products grew £115.3m and new products added only £3.8m.” 

Innovation

Of course, that doesn’t mean brands aren’t innovating. Genius has introduced muffins, pancakes, pizza bases and, at the upper limit of technical difficulty, pocketable gluten-free pitta breads. Claire Ramsay, director of marketing at gluten-free brand Mrs Crimble’s, says innovation is crucial in maintaining consumer interest. “Launches have added excitement to the category and helped to create interest,” says Ramsay. “We’ve also seen more premium packaging and additional own-label flavours.” 

The brand hopes to improve its own comparatively modest growth of 4.3% as this year’s innovations - three variants of add-water Pasta with Sauce under the Gluten Free…and Good For Me sub-brand - bed in. “We’ve launched more products than ever this year and most are still within their introductory phase,” says Ramsay. “We expect these to yield great results in the next few months when major listings become live.”

On a small but fast-growing scale, US brand Udi’s, launched in the UK in 2013, has grown 58.6% this year. Its bagels and Tiger Bloomer have contributed to growth, with the brand stocked by Waitrose, Sainsbury’s, Asda, Tesco and Ocado. “Continually expanding our portfolio is a key driver for the business and its growth,” says Simon Hazlett, MD at owner Boulder Foods. The range has also seen significant increases in distribution. This March saw Waitrose increase its Udi’s line with 14 products, and Asda began stocking the new Peri Peri Tortilla Chips in October. The brand has also pioneered gluten-free in-store bakery trials with Asda. 

Udi’s is big in snacking - lines recently launched in Portugal and expected to arrive here soon include raw bars, cheese puffs and chocolate clusters - but free-from’s reigning snack star is Nakd. The Natural Balance Foods brand has benefited from the removal of traditional confectionery from checkouts, and has grown 56.1% to nearly £30m. 

“Key to introducing consumers to the free-from category, and more specifically Nakd, is a combination of strong advertising and marketing campaigns supported by great partnerships with retailers,” says Natural Balance marketing director Marina Love. “This gives the category great visibility to drive sales. Our Cashew Cookie bar continues its phenomenal growth, adding £2m across multipacks and singles. Its virtuous ingredients list of just cashews and dates appeals to consumers.” 

Nakd Nibbles, the brand’s first impulse range, was launched in March and has drawn admiring glances from the rest of the category. “We like Nakd Nibbles,” says Alpro’s Vicky Upton. “Bringing this kind of product to more occasions and more store formats will benefit the category, so we start to be present not just in the main supermarket shop but in impulse and out-of-home.” 

The freezer is another location of interest. Genius now has a range of frozen pastry and pies and Schär, formerly Dietary Specials (up 12%), launched frozen Italian meals. 

Strong growth in frozen

“Frozen has experienced high levels of growth. Schär has contributed to this and is committed to continued innovation in this area with its Bontà d’Italia meals, including the first gluten, wheat and lactose-free margherita pizza,” says commercial director Bradley Grimshaw. Udi’s now plans to move into the deep freeze. 

As the category grows, an increase in own-label presence is inevitable, even if brands are the main driving force behind growth at present. 

Tesco Finest’s gluten-free cakes are, according to one commentator, a “good eat” while M&S’s Made Without Wheat range features both sausage rolls and, ambitiously, pork pies. “As the category matures there’s a role for tiering,” says Upton. “It’s not about being troubled by private label. It’s even more of a reason why brands need to stay on the front foot of innovation and what customers want.”