A few years ago a customer came into Patisserie Bleu Cafe in Nashua with a heart-wrenching request: Her two young boys had numerous food allergies and couldn't have birthday cake. Was there any alternative?
Owner Deb Soby started experimenting and subsequently developed a nut-free, dairy-free and gluten-free solution that addressed most food allergies. In the process she stumbled upon a hot market. In fact, gluten-free products now account for 20 percent of her business and she has trouble keeping those items stocked in the bakery case.
Gluten-free items are one of the faster growing segments of the specialty food industry. According to a 2009 report by the market research firm Packaged Facts, the gluten-free market ballooned from $580 million in 2004 to $1.56 billion in 2009, growing at an average annual rate of 28 percent. Based on projected sales, the industry is expected to reach $2.6 billion by 2012, even with factoring in a recessionary slowdown in growth.
Roughly 1 percent of Americans have celiac disease, a digestive disorder that makes it difficult to absorb gluten, an elastic protein found in wheat, rye and barley. And the National Institutes of Health reports that many people remain undiagnosed, suffering with vague symptoms rarely connected to food sensitivities.
Gluten-free products are pricier than traditional baking mixes and bakery items, some costing more than twice as much. But market demand is there. In the past three years in NH alone at least a dozen food businesses have either opened as solely gluten-free enterprises or added gluten-free items to their menus. Nationally, brands like General Mills and Anheuser-Busch have added gluten-free products.
"More and more people are finding me," Soby says. "I've been giving samples to local doctors' offices and posted some flyers, but the word-of-mouth business is incredible. Unlike pricier items that appeal to our social conscience, like the eco-friendly industry, gluten-free products are a necessity for those with food sensitivities."
A Sound Business
Necessity was the mother of invention for Jason and Audrey McCaffrey of Claremont. Two years ago the couple launched a gluten-free Internet-based wholesale business, The Flour Nut, after Audrey was diagnosed with gluten intolerance. The Flour Nut specializes in gluten-free baking mixes and almond flour.
"My wife and I found it difficult to find foods that were not only gluten-free, but also grain-free and nutritious," says Jason McCaffrey, who has been running The Flour Nut with his wife since February 2008. "We started experimenting with almond flour and fell in love with it."
Because they do everything by hand and in small batches, there was not a huge initial up-front investment, says McCaffrey. Sales increased 17.6 percent between 2008 to 2009. Their biggest seller is Austin's Maple Cinnamon Muffin Mix, with a one pound bag of almond flour a close second. Mixes sell for $7 to $10. A one-pound bag of almond flour, made from blanched almonds, is $12; a five-pound bag sells for $48. McCaffrey says their customer base includes retailers throughout New England with recent international expansion to Scotland and India.
Those prices may sound high given that a traditional bread mix sells for about $2 and a five-pound bag of regular flour is about $3, but bakers say gluten-free ingredients, which come in many varieties, are costlier to produce. And customers seem willing to pay.
At Patisserie Bleu, Soby perfected a cake recipe using a blend of rice and tapioca flours, and other ingredients like potato starch and xantham gum. She offers a line of brownies, muffins, cupcakes, cakes, bread and a newly developed pie crust. A regular 8-inch cake sells for $28; a gluten-free version is $36. "Compared to this time a year ago, it's really taken off," she says of those items.
Self-proclaimed crust crusader Brad Sterl, president of Pittsfield-based Rustic Crust, a pizza product manufacturer and wholesaler, is juggling the best of both worlds after launching a gluten-free line of pizza crusts about two years ago. A friend in the consulting business had proposed it as a potential growth market, and Sterl listened.
Sterl says his friend was right. Even in a tough economy, sales for gluten-free crusts in 2009 hit 15 percent above projected sales, while the rest of the company's product line rose a more modest 5 to 10 percent. And that's despite the fact that the shelf price is 40 to 50 percent higher than his wheat-based crusts.
"We believe it will eventually be our number two item. That's how fast the gluten-free market is growing," Sterl says. After much experimentation, Sterl settled on a recipe including chia-yes, of Chia Pet notoriety. He describes it as an underused super food that, when ground in seed form, has a gluey property that perfectly replaces the role of gluten in baking. "We spent a year on product development because we knew that taste was an issue with existing gluten-free products," Sterl says.
A Precarious Balance
Just as the fairytale princess could sense a pea buried deep in a pile of mattresses, those with gluten-intolerance can get sick from a microscopic amount of gluten.
That's why Sterl decided it was best to become certified to manufacture gluten-free products at his own plant.
"We're a wheat-based company, so it's important that we do things properly," he says. "On the days we make the gluten-free crusts, we take all the wheat-based products out and our whole facility is washed and cleaned. Then we test for wheat residue. Every batch is tested independently by Gluten Intolerance Group of North America."
Joe Rafferty, who co-owns and is chef of Rafferty's Restaurant and Pub in North Conway, says they invested in dedicated pots and pans, colored plates and a fryolator, all specifically for preparing gluten-free food.
The restaurant opened in June 2006 soon after his niece was diagnosed with celiac disease, and the decision was made to offer a gluten-free line to customers. His pub menu includes gluten-free alcoholic beverages, including a selection of flavored vodka and beer. They now promote themselves as having the largest gluten-free menu in New England, a marketing angle that has helped them gain footing in an area with 60 to 70 other restaurants to choose from.
Rafferty says there is a traceable percentage of international customers who frequent the restaurant specifically for the gluten-free menu. "They do their research and find us on the Internet before planning a vacation. In the past two years, I can tell you we've had no fewer than 20 or 30 parties from Europe or elsewhere, overseas, who sought us out," he says.
Rafferty estimates that gluten-free business accounts for about 75 percent of their overall customer base, between those who come for the food, and those who follow their lead. "For instance, we may get a party of nine and one of them is gluten-free, so it's the reason they chose to come here," he says.
For those digestively challenged, being gluten-free is no easy task. Without federal guidelines, customers must take a business's word that their food is truly gluten-free. Chefs point out cooking without using the basic ingredients can be a challenge.
Professional chef and gluten-free advocate Oonagh Williams conducts cooking demonstrations at local libraries to help spread the gospel of gluten-free home cooking. More and more, she is finding that her attendees are seeking information, usually in the wake of a diagnosis that leaves them somewhere between desperate and confused.
Williams, whose primary business is the Merrimack-based Royal Temptations Catering, is a critic of manufacturers who "hide behind" Food and Drug Administration labeling laws. Currently, William says manufacturers aren't required to specify how they manufacture or test products for gluten.
As for the high price of gluten-free products, she concedes that ingredients and processing requirements justify some upward price adjustments, but in some cases, she says the pricing borders on gouging. "That's why I'm an advocate for helping people to adapt their regular baking skills, so they can learn to bake their own food with ingredients they can control."
The reality is gluten-free products cost more to produce. But the investment can be worth it for a business. Rafferty says his gluten-free line is keeping the company in business. "I'd like to think, without gluten-free, we'd do a good enough job taking care of our clientele that we'd still being doing the business we are," he says. "But something inside tells me that's probably not true. We'll never know for sure, but I know one thing: gluten-free is here, and it's here to stay."
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