Bagels seem a simple enough food item, but in the world of gluten-free foods, a good bagel is hard to come by. The bagels generally taste like paper, break apart or crumble while you eat them and leave a terrible after taste. Yet even something as basic as a bagel should be great! What good is a ham, egg and cheese bagel if the bagel has no flavor or crumbles while you take a bite? A bagel no matter what it is should taste good from the first to last bite.
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Over the last few years the gluten-free awareness has grown tremendously. During this period of time there have been a few gluten-free bagels that have come and gone in the market, but none of them were something to tell a friend about. Needless to say, there are always new companies out there trying to reinvent the structure and texture, yet the result still remains unchanged. However, over the past year the gluten-free segment has exploded with a borage of new companies, or existing companies finally able to expand and offer their product nationally as opposed to locally. For anyone with celiac disease or children with Autism trying to eat gluten-free this is great news. Why is this so great? Well, if you do not have gluten intolerance or care for someone with Autism, you may not understand, not having the choice to use a different product if you do not like a particular brand is very limiting and frustrating. Eating is one of the most important actions we as human do because we enjoy it and we need it to stay health and grow. Having healthy competition in the market place is what drives us all to be better. With Don’t Be a Glutton the bar has been raised!
The market from gluten-free flours to gluten-free places locally offering it on their menu has expanded all over the country; especially where Don’t Be A Glutton bagels is opening. In the New Hampshire area more and more restaurants have gluten-free products on their menus helping to educate people on the benefits of eating a gluten free diet. In the United States alone, sales of gluten-free food and beverages hit “$2.64 billion in 2010, with a compound annual growth rate (CAGR) of 30% over the 2006-2010 periods” (Gluten, 2011).
T he growth of gluten-free product has parallels in the diagnoses of celiac disease, “a gluten intolerance that has doubled in case numbers every 15 years since 1974” (Keller, 2012). With an increasing number of Americans diagnosed with Celiac, not to mention many more non-diagnosed individuals finding health benefits from avoiding gluten, the market has a ready audience. Because gluten-free products require specialty flours and premium ingredients they command higher prices, they’re typically more expensive than their traditional counterparts. Yet despite that fact, they’re selling fast, which is exactly why so many companies and brands are jumping in.
As with any business once the market shows growth and interest than everyone wants to get a piece of the pie. The problem, however, is not that companies are offering gluten-free products; the problem lies in the products being labeled gluten-free. These products are often being cross contaminated during production, for a person who has celiac disease this can be very serious. This type of diet is not so they can lose weight it is to protect from becoming gravely sick. Don’t Be A Gluttons target segment will be focused on this market, offering up a sterile environment where people who truly need to be away from gluten can rest assure they are being taken care of, as well as health concussion individuals who are looking for a diet without the gluten; they will find delicious great tasting bagels at Don’t Be A Glutton. Some reports have said that many people are not giving up gluten for medical reason but just to following a diet fade, by some estimates the number some in around 35 million people, a good sizable market. More people are learning they cannot eat gluten as physicians become better at detecting when the ingredient is making patients sick. This fact gives the food businesses confidence that demand won’t fade after the fad does. “Global sales are up 92 percent since 2005 and are forecast to increase double every year through 2015” (Wee, 2011). In the U.S., sales grew 16.9% over 2010; more than double that of five years ago.
When approaching this segment, the messaging has to connect and talk to the right audience. Creating a buzz through social media and public relations will keep the product in the front of people’s minds. Marketing is a step by step process which can lead to widespread public awareness of a product type, like gluten-free foods. The fact that gluten-free products attract a consumer base outside those affected with celiac disease shows the amazing effective marketing has on the industry. It is clear that such a marketing plan is working, regardless of whether it’s a consumer trend or medical need.
IV. Competitive Analysis
As recently as the past two years there have been acquisitions of the major players in the gluten-free product market. Two of the main companies who offer these products are Udi’s Healthy Foods and Glutino Food Group which were acquired by Smart Balance, Inc for combined estimated 200 million dollars (Smart balance, 2012). This clearly shows where the industry is going. For good tasting well marketed bagels Don’t Be a Glutton will have these two companies to contend with online and in the local supermarkets.
The Udi’s brand which started with their gluten-free products in 2008 has rose to the number one leader in the industry for bakery products. In 2011 Udi’s seen revenues of just a little less than 60 million dollars for bread and granola products. Glutino a pioneer in the gluten-free business started in 1983 creating products for those who could not eat gluten filled products. Glutino similar to Udi’s also seen revenues slightly below 60 million in 2011. Both brands have seen steady double digit growth over the past 3 years. With the gluten-free industry producing 2 to 3 billion in revenue there is still a large part of the market to capture.
Extensive knowledge of Gluten-Free products
Strong financial backing
Great online and supermarket presence
Dedicated manufacturing to Gluten-free production
Lacking in variety
Competition against each other
Glutino’s products crumble when cold
The major difference between these two companies and Don’t Be A Glutton is variety and texture. It is true that both companies do have products that offer an okay tasting bagel but they miss the mark on variety of the brand. Currently Udi’s the better of the two bagels offer plain, cinnamon raisin, and whole wheat. Glutino offers the same variety but added sesame seed to their line. Don’t Be A Glutton will have these products but also offer some varieties that are very popular to the bagel community such as everything bagels. Although, Don’t Be a Glutton does not have the financial backing that the two brands posses they can benefit from the awareness that two brands have put into the market. The market segment itself is still very new and therefore people are always looking for better tasting product offerings. This is where Don’t Be A Glutton will differentiate itself from the competition. As seen in recent years if Don’t Be A Glutton started to take away significant market share from these two brands it is possible that there could be and acquisition offering for Don’t Be A Glutton.
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