Gluten-free has a well-established presence in the markets of western Europe, notably Italy, Germany and the UK, but the sector is rapidly gaining traction in eastern European countries. In just-food’s series of market spotlights on the next five countries manufacturers should target, John Shepherd looks at the Czech Republic.
Increasing awareness and diagnosis of coeliac disease in the Czech Republic has led to a rise in the take-up of gluten free products in the country and placed the market among ones to watch for manufacturers.
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Industry watchers point out that, as elsewhere in central and eastern Europe, Czechs have lagged behind their western European neighbours in embracing new consumer trends. But that is changing.
Retail sales of gluten-free products in the Czech Republic remain small but have been growing steadily over the past five years. Sales in the sector increased from a total of US$1.6m in 2010 to $2m in 2013 and $2.3m last year – a year-on-year increase for 2014-2015 of 8.3%, according to data from Euromonitor. The figures are small when compared with the size of the gluten-free market in neighbouring Poland but analysts expect sales to increase further.
Chris Brockman, Mintel’s research manager for food and drink in the Europe, Middle East and Africa, says: “The Czech Republic, in common with Central and European countries, is generally a few years behind western Europe in adopting new trends, but this region is now starting to see the gluten-free category develop strongly.”
Research from Mintel shows the number of gluten-free food and drink products launched in the Czech Republic has risen by almost a quarter in the last two years up to last month. Over the last 12 months, 16% of total food and drink launches in the country have been gluten-free, up from 12% a year earlier.
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By GlobalDataBrockman said the Czech Republic is “more westernised” than other eastern European nations, such as Poland but said the recent jump in the number of gluten-free products being launched as “surprising” given the small size of the country. “The launches are of course imported gluten-free products, but the overall share figure surprised me quite a lot, given the size of Poland, which is a sizeable food and drink market, yet the increase in gluten-free product launches there for the period was 6%,” Brockman said.
According to Brockman, growth in the Czech gluten-free sector has been largely driven by snacks, pasta, pizza and prepared meals, in addition to bakery goods. “The growth of gluten-free in the Czech Republic has been driven by a combination of factors – the number one factor being the greater awareness of coeliac disease and of wider gluten intolerance.” More cases of coeliac disease are being diagnosed, while more people turning to gluten-free as a “trendy lifestyle approach”, Brockman says.
Euromonitor international analyst David Hedin said the research firm is “more positive in terms of the future domestic manufacturing and development of gluten-free in the country than in Poland”. However, Hedin notes Poland is well ahead in the sector with “Polish brands that are already rather big”, such as Bez Gluten and Amarello, with products that are also being exported for sale in other markets in the region.
In the Czech Republic, domestic manufacturers of gluten-free products include Prague-based Lifefood, founded ten years ago by Tereza Havrlandová. Lifefood’s portfolio takes in other categories – including organic and vegan – but the company manufactures a range of gluten-free products among its range of free-from foods. It has since expanded into 15 other countries. Lifefood sells 90 separate products across the countries in which it has a presence, including crackers, bread, biscuits and chocolate. A spokesperson says Lifefood has a turnover of EUR8m ($8.8m) in 2015 – “around 25% of which was linked to the Czech market”.
The spokesperson says all of Lifefood’s products are gluten free, with “the widest assortment of what we sell available in the Czech Republic”, adding: “Our products are sold mainly in health food stores and fitness chains, but we are also starting to sell our products through some of the more conventional retailers.” Lifefood is also developing new gluten-free products that will be launched at the international Biofach organic trade fair next February in Germany.
Havrlandová, who was named among Forbes‘ entrepreneurs of the year in 2015, said recently Lifefood is now set to enter the Canadian market and “further down the road the US”.
Czech mainstream food manufacturers have also moved into gluten-free. Emco, a family-owned company based in Prague, started manufacturing gluten-free products in 2011. Its cereals range includes gluten-free Emco Granola, which targets what it calls “the healthy lifestyle trend”. Emco declined to comment in detail on its business. However, the company said its cereal products, including gluten free, have a share of around 50% of the markets in both the Czech Republic and neighbouring Slovakia.
Italy-based pasta manufacturer Zini is among exporters to the Czech Republic with products including a range of gluten-free.
Zini export area manager Riccardo Mazzoli tells just-food the company’s pasta products have been sold to the Czech Republic for around seven years under its own and private-label brands. The private-label pasta is sold through retail stores while Zini’s own products, including gluten-free, is destined for the country’s foodservice sector. Mazzoli declined to give sales figures for the Czech Republic but said demand for gluten-free was increasing “steadily”.
Retailers in the country are gradually responding to the demand for gluten-free. The Czech Coeliac Society says “the availability and choice of gluten-free products are steadily improving”, adding: “There is no chain of health food shops (like Reformhaus in Germany and some other countries) but the German pharmaceuticals chain DM has recently started to sell basic gluten-free foods, such as bread, pasta and biscuits.”
The society, which updates Czech coeliacs and tourists on the availability of gluten-free foods, says other European supermarkets operating in the Czech Republic that are increasing shelf space available for gluten-free country include Ahold Delhaize’s Albert, two Rewe chains in Billa and Penny Market, then Globus, Interspar (selling its own line of bread, pasta and biscuits), Schwarz Group’s Kaufland and Tesco.
