June 26, 2018
Let’s take a look at the current state of gluten-free foods, their growth trajectory going forward, and what these insights mean for pizza operators looking for a recipe to grow their business.
Back in 2012, Domino’s first announced that customers could purchase gluten-free pizza crust. At that time, people took notice, but the reality is that “gluten-free” has taken on new meaning since then.
To that end, let’s take a look at the current state of gluten-free products, their growth trajectory going forward, and what these insights mean for pizza operators looking to grow their business.
Guten Free Foods: Where The Marketing Recipe Is Now, And Where It’s Headed
According to Mintel, total gluten-free food sales reached $8.8 billion by the end of 2014 – a 63% increase versus 2012-14. Market research publisher Packaged Facts confirmed similar growth: retail sales of gluten-free foods had a compound annual growth rate (CAGR) of 34% over the five-year period ending in 2014, and total retail sales reached $973 million,
Most relevant to pizza operators, Pizza Hut decided to offer gluten-free menu options in January of 2015. With arguably more purposed positioning than Domino’s, Pizza Hut made clear that the company’s gluten-free options would be truly “gluten-free”: employees would receive specific training (an excellent idea) to keep the company’s gluten-free products separate from everything else – gluten-free preparation would include specialty gloves, parchment paper, ingredient kits, and pizza cutters.
Going forward, initial gluten-free momentum looks to continue. To paraphrase Amanda Topper, Mintel’s food analyst, “Gluten-free will continue growing in the short term, as FDA regulations have made the definition of ‘gluten-free’ more clear to customers and merchants.” Ms. Topper went on to say that innovation in the industry will only fuel more growth. U.S. News confirmed Mintel’s growth prediction, saying that “The gluten-free trend is at its peak and won’t be going away soon,” and Packaged Facts projected total sales to equal $2 billion by 2019.
At least in the short term, gluten-free products look like they should be on pizza operators’ radar.
Who’s Buying These Products – The Targets For A Gluten-Free Foods Marketing Recipe
Of course, knowing that “gluten-free” should be on your radar is very different than knowing what to actually do.
Demographic insights don’t really paint a clear picture. On one hand, the same Mintel study found that the percentage of customers who think “gluten-free diets are a fad” has increased from 33% to 44% in the last two years. On the other, 22% of Americans currently follow a gluten-free diet, compared to 15% from two years ago.
Research firm Datamonitor had similarly inconclusive findings, with 17% of Americans 15 and older showing interest in purchasing gluten-free products, and only 22% of Americans admitting to buying gluten-free products on occasion.
To quote David Gibbs, CEO of Pizza Hut: “Pizza Hut executives do not expect gluten-free to have a huge market, but it will appeal to a niche — and eliminate the “veto vote” for consumers who only want gluten-free options.” And according to Domino’s spokesman Tim McIntyre, “Pizza with gluten-free crust is not a huge seller at Domino’s, but it sells enough that we intend to keep it as a permanent menu item.”
In sum, the data suggest that some customers have started seeking out gluten-free options, but “gluten-free” doesn’t look like it will become a mainstream demand in the long-term.
Best Practices For Pizza Operators Looking For A Marketing Recipe In A Gluten-Free Foods World
Pizza operators have seen this story play out before – it’s not so much that “gluten-free” has become a new standard for Americans; Americans have just started demanding healthier products. “Gluten-free” looks like the latest in a long line of terms like “Diet,” “Organic,” “Fresh,” “Hand-made” – name it (remember, only 1 in ~200 people cannot eat gluten due to health risks like coeliac disease – the majority of the gluten-free market comes from health-motivated consumers).
As a result, there are a few things pizza operators can do to take advantage of the market for gluten-free requests from customers:
Showcase menu items attractive to health-conscious consumers
Remember, gluten-free is about health. Make sure your restaurant includes items for customers looking for the “healthy option” and isolate these options on the menu so that they are easy to find – both online and in-store.
Use healthy items to attract new business (but never sacrifice taste)
“Gluten-free” won’t dramatically alter sales on its own. Experiment with new recipes and, if you discover a great-tasting recipe, promote it to customers via email and mobile marketing. To quote Tom Krouse, CEO of Donatos, “We introduced gluten-free because that’s a whole new market. It took us three years to get to this product because when we put a product out, it’s got to be very high-quality.”
Promote gluten-free to existing customers first
Remember, your most loyal customers will always be willing to try something new before new customers. Use strategic marketing to get a feel for any gluten-free menu items. For example, 800 Degrees promotes a #PizzaoftheDay menu item that’s half price – this is the perfect type of strategy to promote a new gluten-free option to see how customers respond.
Get Customer Feedback
Gluten-free is a different animal. Customers demand careful preparation and gluten-free crusts are smaller and less elastic. The only way to be prepared and succeed is by soliciting customer input. Use a mobile survey technology to get a sense of customer satisfaction right after they make a gluten-free purchase. Respond to feedback, incorporate common trends into your overall preparation, and keep innovating.
Above all, remember that you’ve been in this situation before, and will again – customer trends and preferences will always change. To remain successful, maintain close customer relationships. With a handle on how your customers are reacting to the changing times, you’ll be able to tackle the gluten-free craze – wherever it may go – without issue.