1. 1 FREE FROM SURVEY 2012 Paul Campbell Julia Horlov 20/09/2012 J2451

2. 2 BACKGROUND This research was conducted to support the Food & Drink Innovation Network’s Free From seminar on 19 th September 2012. Qualitative research and an online survey were both undertaken and the findings were presented by Julia Horlov at the seminar. This document supplements the presentation by reporting the findings of the online survey. The survey investigated how the Free From market is changing, and, in particular, obtained perceptions of the importance of specific customer segments. The survey took place from 5 th – 12 th September. All attendees of the seminar were invited by email to participate in the survey. In total, 51 responses were achieved.

3. 3 RESPONDENT PROFILE Base: All respondents (51)

4. 4 RESEARCH FINDINGS

5. 5 DESCRIPTION OF FREE FROM TARGET MARKET Unsurprisingly, at least 4 in 5 respondents stated that those with either a medically diagnosed or self- diagnosed allergy or food intolerance formed part of the target market for Free From products. Moreover, almost as many respondents believe that consumers who make a healthy lifestyle choice also form part of the target market. Base: All respondents (51)

6. 6 IMPORTANCE OF FREE FROM PRODUCTS BEING POSITIONED AS A HEALTHY LIFESTYLE CHOICE With three quarters of respondents stating that consumers who make a healthy lifestyle choice are part of the target market, it is unsurprising that more than 4 in 5 respondents believe it is at least fairly important to position Free From products as a healthy lifestyle choice. Base: All respondents (51)

7. 7 WHO MARKETING / BRANDING OF FREE FROM IS AIMED AT In spite of the perception that Free From products should be positioned as a healthy lifestyle choice, only 35% of respondents believe that the marketing / branding of these products is aimed at this market. Base: All respondents (51)

8. 8 CHANGES MADE IN LAST 2 YEARS TO APPEAL TO CONSUMERS WHO MAY CONSIDER FREE FROM AS PART OF A LIFESTYLE CHOICE Respondents believe that widening the availability of Free From products (94%) was the change most likely to have been implemented to appeal to consumers who look to make a lifestyle choice. Only 51% and 41% believe that branding and packaging has been changed respectively to appeal to these consumers. Base: All respondents (51)

9. 9 AWARENESS OF BENEFITS OF FREE FROM PRODUCTS Respondents overwhelmingly believe that mainstream consumers are becoming more aware of the benefits of Free From products.

10. 10 MARKET SHARE There is a strong belief that in the last 12 months competition for market share within the Free From sector has increased. However, compensating for this increase in competition is the strong belief that the market share of the Free From food category will increase over the next 12 months, thus providing opportunities to increase sales to new and existing customers. Base: All respondents (51) Market share of the Free From food category in next 12 months Competition for market share within Free From sector (last 12 months)

11. 11 HOW THE CONSUMER PROFILE HAS CHANGED IN LAST 2 YEARS No respondent perceived the consumer profile to be the same now as it was 2 years ago. More than 4 in 5 believe the proportion of consumers who have self-diagnosed allergies or food intolerances has increased and three quarters believe the proportion of consumers who make a lifestyle choice has increased. Base: All respondents (51)

12. 12 According to respondents, the segments with the greatest opportunity for growth are consumers who look to make a healthy lifestyle choice (45%) and those self-diagnosed as suffering from an allergy or food intolerance (37%). SEGMENT WITH GREATEST POTENTIAL FOR GROWTH Base: All respondents (51)

13. 13 BIGGEST BARRIER TO INCREASING SALES AMONGST MAINSTREAM CONSUMERS High product cost (61%) is deemed to be the biggest barrier to increasing sales of Free From products amongst mainstream consumers. However, only 8% believe that low awareness of health benefits is the biggest barrier which supports the view conveyed earlier that mainstream consumers are becoming more aware of the health benefits associated with Free From products. Base: All respondents (51)

14. 14 CONCLUSIONS

15. 15 CONCLUSIONS The future of the Free From sector looks positive. Although competition within this sector is increasing it is widely believed that the overall market share of the sector will grow. According to the findings, the segment with the greatest potential for growth is the healthy lifestyle choice. There is a recognition that it is important to position Free From products as a healthy lifestyle choice but this does not appear to have happened. It is thought that the availability of Free From products has widened to become more accessible to this segment but there is a belief that branding and packaging has not been changed to appeal to these consumers. To grow this segment branding and packaging should communicate the health benefits of the products to these consumers, as well as communicating relevant messages to those with an allergy or food intolerance.

16. 16 Tel: +44 (0)113 237 5590 Fax: +44 (0)113 237 5599 Enquiries@McCallum-Layton.co.uk www.McCallum-Layton.co.uk McCallum Layton Bramley Grange Skeltons Lane Thorner, Leeds LS14 3DW Defining a clear direction for