Canadian Vending

Products Snacks
Inside the gluten-free market

An analysis of the gluten-free market in Canada allows businesses to determine its viability

September 24, 2013
By Karly O’Brien


Healthy vending is the latest sector for vending operators, and business owners to explore.

Healthy vending is the latest sector for vending operators, and business owners to explore. However, many are wary of entering it, and for good reason. Not only is it difficult to find products with a long shelf life that are both affordable and tasty, but sometimes the consumer opts for the less healthy item anyways.


On the other hand, one area that may be worth the long-term investment is gluten-free products.

According to a research report, Gluten-Free Foods in Canada, published by Packaged Facts, says that the gluten-free market is stronger in Canada than in the U.S. as they found that the second most popular reason for going gluten-free is the result of wanting to support someone in their family having celiac (an autoimmune disorder of the small intestine that requires an individual to eat foods without the presence of gluten), or another disease where the individual cannot consume gluten products.


More than a third of those purchasing GF products considered them healthier than grain products, and less than one third are purchasing GF foods to manage their weight. When the same survey was done in the U.S., a much smaller percentile were buying gluten-free foods because of someone in their family with celiac or a disease where the individual could not consume gluten. Based on this, researchers believe it is less likely to be a fad than compared to the U.S., where this reason is not as popular.

As for the market value, the gluten-free sales have surged to $460 million, and are estimated to double by 2017.

The last five years have seen an impressive growth rate for the Canadian market with sales climbing from $178.9 million in 2008 to $458.9 million in 2012 – that has a compound annual growth rate (CAGR) of 26.6 per cent for that period.

A major factor fuelling this fast market growth is the increased availability of gluten-free products in retail and discount grocery stores such as Sobeys. This suggests that if GF foods are offered in vending machines consumers will purchase these items more often, which was the case for grocery stores. In total, the retail sales of gluten-free foods are projected to climb from $549.8 million to $811.5 million in 2017, a CAGR of 10.2 per cent during that period.

Food prices
One negative factor about GF foods is the price difference between gluten and gluten-free, which is expected to play a role in the forecasted decline of value in the market. Packaged Facts compared 120 different foods at two retail grocery chains and found that the price difference was anywhere from 11 per cent to 300 per cent (GF being the higher percentiles).

Overall prices of foods in Canada rose faster than inflation between 2008 and 2012. The consumer price index (CPI) for all foods purchased from stores experienced a CAGR of 3.2 per cent during those five years, while the CPI (essentially inflation of the cost of consumer goods) experienced a CAGR of only 1.6 per cent for the same period.

More than 60 per cent of respondents in Packaged Facts’ August 2012 survey felt gluten-free foods were overpriced, even before taking into account generally rising food prices. In light of this, the market is expected to reach its peak by the end of 2013 or the early part of 2014 and then is expected to grow, but at a much slower rate than previously. Projected sales are as follows: $624.6 million in 2014, $699.8 million in 2015, and $758.4 million in 2016.

Snack foods
In Canada, snack foods are the largest GF sector with $127.1 million in sales, which accounted for 27.7 per cent of the gluten-free market share in 2012. The runners up were bread, cereal and grain (including pasta), followed by frozen or refrigerated prepared foods, which were also very strong gluten-free categories in 2012. In total, all the above categories generated sales of $335 million in 2012.

The sale of sweet baked goods (cupcakes, cookies, etc.) accounted for 8.8 per cent of the GF market. However, after an analysis of Google’s most popular gluten-free related search terms, it was found that dessert items was one of the top categories, suggesting that consumers are dissatisfied with the options in this area.

The market value is expected to increase, but at a slower rate in the future, and even at that it is making millions. By 2017, gluten-free sales are expected to reach a little past $800 million, which suggests they will reach a billion-dollar market value shortly after. This just might be a smart business decision.