Celiac.com 01/22/2014 - With many major grocery brands struggling to generate sales growth, and with top gluten-free brands Udi's and Glutino racking up combined net sales growth of 53% last quarter, the writing is on the wall: More and more wheat based brands will be looking to break into the gluten-free market in the next three to five years.

Photo: CC--Zane SelvansBoulder Brands CEO Steve Hughes told analysts on the firm's Q3 earnings call that Boulder is seeing "strong, consistent velocity in distribution builds across all channels" for gluten-free products.

According to Hughes, 5-10% of all wheat-based product categories will be gluten-free in the next three to five years, or else they will disappear from the market.

Again, as many wheat-based brands struggle for market share, Udi’s remains the fastest-growing brand in the conventional grocery store channel, and retailers are responding.

Hughes said that Udi's 3rd quarter net sales were up 74% year-over-year, adding that "Glutino net sales grew 29%. Combined, our gluten-free brands increased net sales 53%." Udi's and Glutino now average nearly twenty items on retail shelves, up from about fifteen and a half just a year ago.

Meanwhile, Hughes notes, the gluten-free pizza business has been performing“extraordinarily well.” He points out that many retailers now have three dedicated gluten-free sections, including a 4-12ft section in the ambient grocery aisles, half the full door in the frozen food aisles, and a frozen or shelf-stable rack in bakery.

Hughes wrapped up his presentation by adding that gluten-free items are also gaining a share of the club store channel. He said that they were "...starting to get some testing of bread into the club channel, which could be very meaningful next year.”

Hughes' presentation does imply that growth also means the pressures of competition for market share, both among gluten-free manufacturers and retailers, and between gluten-free and wheat-based manufacturers and retailers.

All of this is basically good news for consumers of gluten-free products, as it means more and, hopefully, better quality products.

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