Free From category continues to grow

Sales are strong when it comes to the Free From ranges in the UK.
25 October 2018
gluten free waffles
Alice Cadman

Client Executive, Worldpanel Division

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The Free From category is still relatively young, but it’s a growing area for supermarkets and brands in the UK, as Kantar data indicates. Growth in the 52 weeks to 9 September 2018 was 37.5%, largely thanks to an increase in frequency – shoppers are picking up products in this category more often, now 18.6 times a year (on average).

However, the category is also reaching more people, with penetration standing at 92.1% for the last year. This has risen 11.1% on the previous year, although growth is slower than the year before (at 13.4%). 24.2% growth in trips to buy Free From products has helped the category accelerate.

While this might indicate we are dodging dairy and giving up gluten at an increasing rate, we should bear in mind that, according to the latest TGI data from Kantar's Media division, just 3% of British adults say they always avoid dairy products and only 5% say they always avoid gluten/wheat. Other data from our Worldpanel division shows bread brand Warburtons is still the single biggest FMCG brand in the UK, and dairy sales are up 4.2% year on year over the latest period. So what is happening here?

Some manufacturers may be helping to skew the numbers slightly, as products are being relabelled ‘Free From’ when they are naturally gluten-free, such as ice cream, rice and crisps.

Growth may also be coming from the increase in price per kilogram of 9% year-on-year, although price per pack hasn’t grown much at all (it’s smaller pack sizes that are contributing to a higher spend by weight).

Retailers are really pushing the ‘chilled convenience’ subcategory (which has grown a whopping 108.7% in value), including items like ready meals and soup. This has one of the highest average prices of the Free From categories, so this growth will also have boosted the prices paid across the sector.

When it comes to the winners of this trend, it is the brands who have the majority share of Free From, holding 74.2% of value share. But private label is growing at 38.6%, driven by new shoppers, with penetration now at 70%. This means over two in three households bought a private label Free From product this year. Morrisons and The Co-Op in particular have heavily promoted their Private Label offerings, with Morrisons Private Label growing at 236.5% compared with growth of 31.4% amongst the brands (growing from a smaller base than brands).

Free From is a competitive market, with a large amount of new products being released frequently by both brands and supermarkets. However, the strong growth of the category means there is room for this development. Aldi launched an own label Free From range in August 2017, contributing to the 70.4% growth in Sales of Free From products seen in the retailer year on year.

Although Lidl is growing from a small base, the number of new shoppers the retailer is attracting means it is the fastest growing, at 298.1%. And in terms of brands, Yushoi baked pea snacks is showing strong growth, due to a combination of good performance from existing product lines and new product development to entice customers.

As noted, Free From products appeal to different groups of shoppers, with some choosing the products for medical reasons, and others’ choices being reliant on lifestyle decisions. Rarely is choice down to ‘enjoyment’ when it comes to Free From, which is chosen more for health and practicality reasons. If brands and supermarkets adding products to this category want to continue to see healthy growth, products must continue to attract the ‘lifestyle’ shopper – by focusing on pleasure, taste and enjoyment whilst still catering for the health needs of their base consumer.

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