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Schafer: Food firms scramble to embrace latest fads

  • Article by: LEE SCHAFER
  • Star Tribune
  • January 13, 2014 - 9:57 PM

In the packaged food industry, there are no fads, only opportunities.

Devotees of a particular diet may recoil to see the word “fad” used here. But there really isn’t a better one to describe what happens when the popularity of avoiding some kind of food soars beyond all reason — like it has with gluten.

Gluten is awful for those with a condition called celiac disease. But for most folks it’s a harmless protein found in wheat and other grains, the stuff that gives bread dough its elasticity.

People with celiac disease struggle to find food to eat that is free of gluten, and for them it’s been a godsend to now have so many gluten-free choices in the grocery store.

But the number of American consumers who want to restrict gluten in their diets isn’t the 1.3 percent or thereabouts with celiac disease. It’s about a third of Americans, according to a poll last year from the consumer marketing research firm NPD Group.

It isn’t particularly difficult to figure out what’s going on. Many consumers have decided that “gluten-free” means “healthy.”

But if there’s one thing that Mayo Clinic physician Amy Oxentenko made sure she got across in our brief conversation, it’s just how wrong that is. How could anyone put away a big bag of gluten-free Fritos thinking the chips are healthy? An ounce of these things, made by a unit of PepsiCo, is 160 calories — 90 of those from fat.

Perhaps consumers have been influenced by Hollywood star Gwyneth Paltrow and her book “It’s All Good,” which presents gluten as one of the bad things. Hers isn’t the most sophisticated book, what with its recipe for a hard-boiled egg (ingredients: “1 fresh organic egg”), but it did sell.

Or people may have run across a 2011 bestseller called “Wheat Belly,” which argued that not eating products made from wheat could reverse a number of health conditions, although Wheat Belly’s publisher sold it as a weight-loss book.

It probably doesn’t matter to enthusiasts if these kinds of claims can hold up under scientific scrutiny, and it’s almost cruel to argue with people who say they feel so much better now that they’ve stopped eating wheat products. There is certainly no upside for food companies to pick fights with popular authors or celebrities, either.

In fact there appears to be just one smart play once a fad like gluten-free emerges: Jump on it.

“You see a whole flood of gluten-free products, and I don’t think that’s because the companies themselves believe all the claims about it,” said George John, associate dean of the Carlson School of Management at the University of Minnesota. “It’s basically, ‘We can make this stuff. If you’d like to have it, here it is. And oh, by the way, it will generally cost you more, which is good for us because we get a little more margin.’ ”

John said the only real growth in the packaged food industry comes from “niches that explode unexpectedly.” The hardest part is figuring out when that’s happening.

Spending heavily to launch a new product for what turns out to be a short-term fad can be expensive. Wait for a fad to become a definitive trend, however, risks being very late to the party.

That’s worse.

General Mills famously flubbed its introduction of Greek yogurt and is still playing catch-up. The Golden Valley-based company has played the gluten-free trend far better.

When gluten-free started to heat up, General Mills already happened to own a brand called Chex, and the company had to do next to nothing in 2008 to make its Rice Chex gluten-free. It just swapped out barley malt syrup for molasses.

It added the text gluten-free on boxes and shipped them to stores. “When we did that we saw just a phenomenal response,” said Amber Holm, a marketing manager for Big G cereals.

As Holm described it, the evolution of the company’s gluten-free strategy was largely driven by consumers. They heard from people on restricted diets who get really sick of eating the same old foods, for example, and who wanted far more choices.

So General Mills has launched such products as Vanilla Chex and has provided more “great tasting, gluten-free recipes made from Chex,” Holm said, building on the tradition of the Chex party mix recipe.

General Mills beefed up its gluten-free advertising beginning in 2010 and, from fiscal 2010 through fiscal 2013, Chex generated double-digit sales growth each year.

General Mills, by the way, isn’t running some sort of game on naive consumers. The company sure isn’t making any health claim about gluten-free. If health-conscious consumers with no gluten sensitivity switch to Rice Chex, well, that’s their choice.

The gluten-free trend perhaps has a way to go before fading, but it’s becoming clear what’s about to follow it. Just look at what’s happened with the venerable Cheerios.

General Mills confirmed, via a website blog that I needed explicit directions to find, that the original Cheerios cereal will come in a box that says it was not made with genetically modified ingredients (GMO).

Much like in the case of Rice Chex, going non-GMO with Cheerios required no reinvention. The original Cheerios is primarily made from oats and there are no genetically modified oats grown, according to the company.

What’s different is that now the small amount of cornstarch and sugar used will be non-GMO. But even that is mostly a detail as Cheerios happen to be one of the lowest-sugar cereals on the market.

General Mills still doesn’t believe that using genetically modified ingredients poses any sort of health risk to consumers, and repeated that view again the day it posted its short blog item.

“We think consumers may embrace it,” said Tom Forsythe, the vice president of global communications.

Selling things consumers may embrace is what General Mills is in business to do.

 

lee.schafer@startribune.com • 612-673-4302

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