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What’s in is what’s out

As consumers move to more natural foods and alternative ingredients, “free-from” is booming

B Calkins/ShutterstockB Calkins/Shutterstock

For many consumers today, it’s not just about what’s in the food products they buy, it’s about what’s not in them. The “free-from” trend is booming as consumers increasingly seek foods that don’t include things like gluten, dairy, fat, preservatives, artificial flavours, antibiotics and more.

According to Euromonitor International, global sales of free-from foods increased 7% in 2016, reaching US$32 billion. The research firm said rising demand for lactose-free and hypoallergenic options has contributed to the growth of free-from, which is set to generate an additional US$9.5 billion in sales by 2021, and is expected to become the fastest-growing category in North America, Asia Pacific, Latin America and Europe, with an average of 5.4% growth.

In Canada, 80% of consumers claim to buy free-from foods, according to the Free-from Food Trends Canada 2015 report by Mintel. The top claims on free-from foods are trans-fat free (54%), fat free (48%) and preservative free (46%). Among free-from consumers, 59% agree that free-from products are healthier to eat or drink, and 52% agree these products help them address specific health issues.

Fat-free claims may be tops, but Joel Gregoire, associate director of food and drink at Mintel, says there’s now an evolution happening in the free-from category. “Claims about reduced fat or sugar content are still going to be important, but we’re seeing a movement towards flexibility,” says Gregoire. “There’s a lot of talk about the ‘flexitarian’ diet and we’re seeing a move towards plant-based foods.” For example, dairy-free and meat-free products (such as vegan sausages) are increasingly popular with younger consumers.

“Young people tend to be experimental and more interested in different foods, and the science [of alternative ingredients] is coming along too,” adds Gregoire. “So, it’s not just about the free-from labels, but what are some of the alternative ingredients or alternative processes [manufacturers] can use to create the food?”

Francis Lo, co-founder of Cambridge, Ont.-based Yoso, is witnessing the movement towards dairy-free products first-hand. His company, founded in 2002, produces a range of dairy-free cultured products such as almond and cashew yogurt, coconut yogurt and cashew cream cheese spread. According to Lo, his sales were up 40% in 2017.

Lo believes the popularity of dairy-free products is driven by a combination of factors. First, there’s a growing population of consumers with food allergies or intolerances. Secondly, “becoming vegan and eating less dairy and less meat is a life statement,” says Lo. “There’s a famous quote from [author] Anna Lappé who said, ‘Every time you spend money, you’re casting a vote for the kind of world you want.’ Consumers want to align their purchase habits with their own values and beliefs.”

Frank Yunace, operations manager at Pete’s Fine Foods in Halifax, has seen a huge rise in dairy alternatives being launched in the marketplace, and many of them are local. For example, Pete’s Fine Foods is now carrying products from Porters Lake, N.S.-based In the Raw, which makes vegan and dairy-free products such as vegan cheesecake. The retailer is also stocking dairy-free cheese products from P.E.I.-based Fresh Start Fauxmage, as well as a dairy-free frozen dessert line from Dartmouth, N.S.-based Common Confections. “We can’t keep that stuff on the shelf. It’s been really popular for us,” says Yunace.

While dairy-free products are clearly hot right now, demand for gluten-free foods also continues to grow. According to Euromonitor International, the global gluten-free market has grown from US$1.7 billion in 2011 to US$3.5 billion in 2016, and is forecast to grow to US$4.7 billion in 2020.

Ryan Dennis, director of communications at Nature’s Emporium (a popular health food market with three locations in the Greater Toronto Area), says gluten free stands out as a major growth area. “Lots of these products are inherently gluten free, but companies are much more savvy about highlighting [this attribute] on their packaging more boldly,” he says. But, with products that are not gluten free by nature, Dennis says there’s a lot of innovation from both big and small companies. “We’re regularly bringing in new breads that are closer to that texture people love,” he says. “There are more quality gluten-free foods that have a much better taste profile and give a different food experience.”

Pete’s Fine Foods operates Pete’s Gluten Free Eatery at its Halifax store, selling in-house gluten-free sandwiches, salads, pizza and baked goods, as well as local gluten-free baked goods. “Our gluten-free business has grown quite significantly in the past couple years, especially our in-house products,” says Yunace. And it’s not just allergies or intolerances that are a driving force: Yunace says both gluten-free and dairy- free products keep getting tastier. “People are able to make these products high quality and they’re using really good ingredients,” he explains.

Another big trend for CPG brands over the last few years has been to remove artificial ingredients and preservatives from their products. Last year, artificial colours, flavours and preservatives were removed from five (of six) varieties of Conagra’s Orville Redenbacher brand of microwaveable popcorn. Aaron Minocha, senior brand manager at Conagra Brands, says Canadians are looking for snacks made with simpler ingredients. “We did a survey and found that for those consumers who had actually cut back on eating microwaveable popcorn or stopped eating it all together, this change in behaviour was mainly to avoid eating artificial flavours and additives,” he says.

Minocha believes the free-from trend is driven by a range of factors, from allergy concerns and restricted diets to consumers who are more conscious of their well-being. “Apart from price, the No. 1 factor driving purchasing decisions for food and beverage products is ingredients,” he says. “Consumers are increasingly becoming knowledgeable about the ingredients in their products.”

On the meat side, there’s growing demand for meat from animals raised without the use of antibiotics or hormones. Within the lunch meat category, for example, Nielsen data shows products that are antibiotic and hormone free, as well as those with no artificial preservatives, are driving significant volume. In the United States and Canada, antibiotic- and hormone-free lunch meat experienced 14.5% volume growth, while preservative-free lunch meat had 7.2% volume growth (for the 52-week period ending April 1, 2017). U.S. figures show that from 2011 to 2015, meat products labelled antibiotic free posted 28.7% growth and products labelled hormone free posted 28.6% growth.

Cynthia Beretta, co-founder of Beretta Farms, attributes the growth to consumers becoming more enlightened about the meat industry as a whole. “People are educating themselves; they’re hearing more about their food supply and are becoming more interested,” says Beretta. “[Free-from] is becoming mainstream and people are just expecting these attributes in the food that they eat.”

What’s next? Nature’s Emporium’s Dennis believes we’ll see more innovative food startups in the free-from space. “Large producers will increasingly get in on the action, but I see increasing niche product development,” he says. “We’ve just seen the beginning of it and it’s going to create micro-segments of foods that people are really enthused about. It’s definitely here for the long haul.”

This article appeared in Canadian Grocer‘s February 2018 issue.

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