New research estimates the category to be worth $7.7 billion in Australia.
Challenging traditional assumptions, the free-from food category not specifically driven by allergies or dietary intolerances, but by those who are wanting to make healthier lifestyle choices.
That is according to the NPD Group’s latest report, adding that the category is estimated to be worth $7.7 billion in Australia, generating 23% of foot traffic within the foodservice industry.
The market research company also revealed that almost a quarter of Australians said that they consume meals that are free-from to improve health (13%), because they are perceived to be better for them (13%), to support animal welfare (4%) and allergy-related (3%).
NPD defines ‘free-from’ foods as meals associated with health, lifestyle and ethical attributes such as gluten-free, no added hormones and free range.
“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,” explains Gimantha Jayasinghe, Deputy Managing Director APAC at The NPD Group.
Within the free-from food sector, almost four in ten respondents (36%) indicated that their meals were vegetarian/vegan or allergy/intolerance-related. Of these, just 4% of respondents claimed to have had a gluten-free meal.
“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,” Jayasinghe said.
“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.”
Millennials driving demand
The data also shows that millennials are a constant force, being the key driver of demand of free-from meals, with almost half (47%) of consumers purchasing from the bracket.
Consumers are also seeking more vegan, plant based and vegetarian options, with 57% falling into the older millennial age bracket (25 to 34 years of age). NPD says QSRs are resonating with the free-from consumer type, with meals with “better for you” and provenance attributes having been key growth drivers in this sector in 2018.
Considering price sensitivity, the company’s research shows that consumers are willing to pay more for the health benefits associated with free-from foods -- with the average bill being $10.88, two times greater than the industry average.
“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,” Jayasinghe advised.
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