The free-from food category is estimated to be worth $7.7 billion in Australia, generating 23 percent of foot traffic within the foodservice industry. A study on free-from foods by leading global research company, The NPD Group, has found that the main driver of growth in the category is not specifically driven by allergies or dietary intolerances, but by those who are wanting to make healthier lifestyle choices.
Consumers are steadily turning to more natural and clean eating meals in a quest for better health. Almost a quarter of Australians said that they consume meals that are free-from (23 percent) to improve health (13 percent), because they are perceived to be better for you (13 percent), to support animal welfare (four percent) and allergy related (only three percent).
“Traditionally, manufacturers of free-from foods were there solely to meet the requirements of those dealing with dietary intolerances. Nowadays demand for these products is more about consuming food that is better for you,” says Gimantha Jayasinghe, Deputy Managing Director APAC at The NPD Group.
Within the free-from food sector, four in 10 respondents (36 percent) indicated that their meals were vegetarian/vegan or allergy/intolerance-related. Of these, four percent of respondents claimed to have had a gluten-free meal, which is 11 percent higher than a year ago.
“It’s not just people who can’t eat dairy or gluten that are fueling the market. You no longer need a medical reason to opt out of certain foods. Increasingly people are making a choice to restrict food groups as a health and lifestyle choice.
“What’s interesting is that it appears people believe eliminating food groups is better for them, but they don’t always understand why. There is an opportunity here for manufacturers of free-from foods to educate their customers on why their products are healthier both on pack and through their communications. We also know that consumers are willing to pay more for the health benefits associated with free-from foods,” says Jayasinghe.
The data also shows that millennials are driving the demand of free-from meals, with almost half (47 percent) of those purchasing falling within the millennial age bracket. Further to this, consumers are seeking more vegan, plant based and vegetarian options, with over half (57 percent) of those searching for these options falling into the older millennial age bracket (25 to 34 years of age).
Quick Service Retail (QSR) brands are resonating with the free-from consumer type. Meals with better for you and provenance attributes were key growth drivers in this sector in 2018. Despite the price sensitive landscape, NPD research shows that consumers are willing to pay more for the health benefits associated with free-from foods. The average bill is $10.88, which is two times greater than the industry average.
“The food industry is evolving for the better,” Jayasinghe says, “Largely driven by proactive millennial aged consumers tired of products that don’t fit their beliefs or preferred diet. What is also important to remember with free-from foods, is that they also have to taste good and offer nutritional value. Continued innovation and availability will be key to ensuring growth of the free-from sector.”
We define ‘free-from’ foods as meals associated with health, lifestyle and ethical attributes such as gluten-free, no added hormones and free range.