Gluten-Free And Dairy-Free Products Gaining Popularity In APAC

Saturday, July 4th, 2020

The plethora of products hitting retail shelves bears testimony to the rising interest and uptake of free-from products in Asia-Pacific. Contributed by GlobalData.

Consumer behaviour—more so in relation to their choice of what they consume—is largely a product of their economic wellbeing, awareness of surroundings and an innate desire to live healthily. Unsurprisingly then, improved economic conditions, better living standards and a rise in awareness of health and wellbeing have been dramatically changing consumers’ choice of food and drink in the Asia-Pacific region.

While on one hand, rising incomes have helped consumers demand more premium products, it has also elevated levels of awareness of what is good and what isn’t—this has helped pique consumer interest in products that suit individual needs. This general rise in health and wellbeing consciousness is fuelling demand for healthier products, and free-from products are capitalising on this change.

According to a survey conducted by GlobalData in Q4 2018, 65 percent of respondents stated that a product’s impact on health and wellbeing always or often influences their choice.

Pervading The ‘Non-Native’ Asia-Pacific Market

‘Free-from’, a term used to refer to products devoid of dairy, gluten, MSG and artificial sweeteners among others, is gradually becoming a mainstay concept in Asia-Pacific F&B space, as an increasing number of consumers are on the lookout for such products. Asia-Pacific is non-native or has had low exposure to these concepts on various fronts—prevalence/diagnosis of specific conditions, awareness and availability of products addressing various individual conditions. Hitherto predominated by the markets in Europe and North America, the free-from products market is nevertheless gradually picking up in the APAC region.

For instance, although initially considered prevalent only in Europe, celiac disease, a condition that makes individuals intolerant to gluten and one that has no medicine to treat, is now considered to be prevalent across many countries worldwide, including Asia-Pacific. While a clear picture of actual prevalence of the condition still remains elusive, partly due to general absence of genes causing this autoimmune disease in Asian populations. It could also be due to the lack of/low awareness and under-diagnosis of the condition. There is a growing interest for these products in Asia in part due to high and growing cases of gluten intolerance as a result of increasing consumption of wheat products.

Parts of the region such as India and Pakistan are now considered home to millions of sufferers from celiac disease and hence depict a huge potential market for gluten-free products. While the number of products with gluten-free claims has been on the rise, they are still deemed to fall short of the actual potential demand—either from the intolerant individuals or from consumers willing to consume these from a “better for me” perception.

But with the awareness, product availability, education and demand on the rise, as is the growing purchasing power, significant opportunities lie ahead for manufacturers to tap into the trend. Indeed, 53 percent of men and 60 percent of women in the region claim to pay high attention to ingredients used in food and drinks they consume, as stated by the GlobalData Consumer Survey carried out in Q3 2019.

The Positive ‘Better For Me’ And ‘Ethical’ Impact

While free-from products are mainly beneficial for those affected with certain intolerances, the concepts are earning a much wider audience thanks to growing awareness of the benefits that healthy products engender and the rising penchant for these. Consumers looking to embrace healthy diets, ditching products for ethical reasons—as is the case with dairy products, and those shifting loyalties for other benefits, e.g. gluten-free millet-based products for weight management—are all stacking numbers in favour of free-from products.

GlobalData’s Q3 2019 survey reveals 58 percent of consumers find products with gluten-free food and drink concepts/claims very or somewhat appealing and 53 percent believe so for dairy-free claims.

Product Development Around Gluten-Free Concept Steers Through Multiple Food & Drink Categories

A large selection of product categories are currently witnessing launch of gluten-free products. Categories such as bakery and cereals, including breakfast cereals and breads and rolls, and snacks including crisps/chips, biscuits/cookies, chocolate and others, are the top of the list with several products launched over the past two years.

This is understandable given a huge selection of gluten-laced products already on offer and the availability of alternatives to gluten such as millets, quinoa, oats and others. However, the region has witnessed the roll out of a rising number of products with ‘no gluten’ claims cutting across various other categories such as cheese, dairy and soy drinks, frozen desserts, dessert mixes, juices, ice-cream and milk among others.

Select Recent Product Launches In APAC With Gluten-Free Claims

Dairy-Free & Plant-Based Product Launches Galore

Dairy-free products are also on the rise in the region. Once targeted and preferred by those intolerant or allergic to dairy, the industry is now expanding to consumers who actively pursue these products for general health, wellness and ethical reasons.

Consumers relate to ethical factors such as lower environmental impact and animal welfare, and to reduce cholesterol or blood pressure in addition to avoidance from dairy-intolerant consumers by going non-dairy. Additionally, a rising penchant for experimentation and exploration of new ingredients and flavours are gravitating consumers towards dairy-free products. However, the rise in plant-based dairy is less likely to be a function of consumers’ resistance to traditional dairy, but rather a reflection of efforts to embrace plant-based foods more generally. These emerging products are gaining significant appeal among various demographic profiles, including Gen Z, Gen Y and Gen X, who consider plant-based concepts very appealing.


Select Recent Product Launches In APAC With Dairy-Free Claims

The Power Of Combining Claims—A Strategy Building Volumes For Manufacturers

While claims such as gluten-free and dairy-free are benefiting manufacturers with increased sales, the actual consumers intolerant to these remain low. As such, communicating these as exclusive benefits is undoubtedly futile, resulting in lower than potential sales. Realising this, and with an intention to attract consumers looking for wider health benefits, manufacturers are combining more health claims to usher in higher patronage. Products with additional benefits such as preservative-free, organic, lactose-free, vegan, vegetarian, natural and others are now a common sight, spiking sales of such products than what would have been possible with singular claims only.


Select Recent Gluten-Free & Dairy-Free Product Launches In APAC With Multiple Health Claims

Prices Get In The Way Of Harnessing True Potential

Lower awareness of the targeted diseases as well as the products tailored to address the issue and higher product prices are a bottleneck that manufacturers need to address to find higher uptake. Gluten-free products come at a higher price because manufacturers incur addition costs to produce them, fuelled by high production costs due to the need to use gluten-free grains and additional ingredients or processes in production to match with regular products in the market.

Higher price points compared to regular products is an issue specifically in Asia where key markets are largely price sensitive, making them unaffordable for a sizable chunk of the intended audience. Leveraging growing social media interaction in the region to better educate is critical to reach targeted consumers. On the other hand, smaller portions/packages and promotions could alleviate pricing hurdles to some extent.

Potential For Free-From Formulations Remain High But Overcoming Hurdles Is Key

The plethora of products hitting retail shelves bears testimony to the rising interest and uptake of free-from products in Asia-Pacific. Although market penetration is currently on the lower side compared to the West, the future remains bright due to strong underlying drivers that are well in place.


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