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Newsletter  Late Summer 2012 Issue

Product Development Technology

Gluten-FreeBuilding Gluten-Free
Production Capability

Gluten-free is here to stay: it represents
a $6.0b-plus, double-digit growth rate
industry. The baking industry has much
to gain by joining rather than bucking
this trend. Here is why this market will
continue to grow.

Many people mistakenly focus on the estimated
1.0 % of the population estimated to suffer from
celiac sprue, an autoimmune conditions involving reactivity to gluten protein. In reality, the
market potential is much bigger. It expands to include diabetics, Crohn’s disease sufferers,
people mildly intolerant to gluten, athletes who believe that gluten reduces their performance,
people allergic to wheat as well as family members of all of the above as they strive for simplified household meals. Women, especially, are more sensitive to gluten. We estimate the target
market at 5% of the population (or 15 million consumers…about half the population of
Canada) with a $25b retail food sales value. North American regulatory environment makes
it more amenable for bakers to compete in the gluten-free market. The pending limit for gluten
residues in declared “gluten-free” products in the U.S. is 20 ppm (in Australia, it is 5 ppm).
However, some organizations, such as the Celiac Sprue Association, require lower limits
(e.g., <5 ppm) in order for products to earn their seal of approval. Conventional wisdom
maintains that gluten-free production must be completely isolated from all potential sources
of gluten contamination from wheat, barley, rye and, sometimes, oats. Note: although a few
companies, such as Manitoba-based J.G. Pizzey, Inc., produce, guarantee gluten-free oats,
other oat sources can be contaminated in the field or during transportation and storage
with wheat.

BEST VANTAGE Inc. has been working with bakeries to help them develop gluten-free
products that can be co-produced with gluten-containing products, with only relatively minor
changes to be made to equipment, quality controls and manufacturing protocols.

Given the much higher prices and nominal margins accepted for gluten-free production, it
behooves the baking industry to look closely at gluten-free manufacturing opportunities. We
project that the gluten-free market is not only here to stay but destined to grow into a
significant market segment, for a number of reasons and despite the premium prices
(and margins) that gluten-free products command. This market’s evolution will be similar
to that of the organic foods phenomenon – limited, significant, high-cost and here to stay
because it meets well-defined, actual and perceived consumer needs.

© 2012 to BEST VANTAGE Inc.

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