Running head: GLUTEN-FREE FOOD INDUSTRY ANALYSIS 1

Gluten-free Food Industry: Opportunities & Challenges

Yuliya Barsukova, Lucie-Liane Duchesne, Colleen Kay, Daisy Medhora & Cynthia Nguyen

University of Alberta

Professor: Mohammad Torshizi

AREC 323
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GLUTEN-FREE FOOD INDUSTRY ANALYSIS
Gluten-free Food Industry: Opportunities & Challenges

1. Describe

Name of product/service: Moh’s Gluten-Free Bakery & Cafe

Location: Downtown Edmonton

Physical assets & machinery: Kitchen & cafe space, baking equipment (work tables,

commercial ovens, mixers, scales, food processors, walk-in refrigerators, and freezers),

sanitation station, display case, branded packaging

Human resources: Chief baker/owner, 3 assistant bakers, payroll manager, 2

interchangeable front-counter workers, cleaner, maintenance worker

Financial resources: 100.000$ on a five-year loan, expected to raise own capital of

150.000$ in the first year

2. Describe the market to which you will sell your product.

Customers: People with celiac disease, people that have a celiac member in the family and

non-celiacs who are influenced by the trend of going gluten-free or wanting to try gluten-

free pastries

Current players in the market: Gluten-free bakeries in different areas of town, cafes and

shops that offer a limited range of gluten-free pastries along with regular menu items, retail

stores that sell ready-to-eat or cook-at-home gluten-free items

Current regulations that may influence the success of the business:

Need to meet the gluten-free labeling requirements: if a food item contains any gluten

protein, modified gluten protein or gluten protein fraction it is illegal to claim that this food

item is gluten-free (Government of Canada, 2012)

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GLUTEN-FREE FOOD INDUSTRY ANALYSIS
Need to follow Good Manufacturing Practices: levels of gluten must be undetectable or

below 20 ppm (Government of Canada, 2012)

There’s also a possible risk of cross-contact between gluten-free pastry made in the bakery

and any gluten-containing food item coming from the outside (worker lunches, visitors,

inspectors, unwashed hands of food handlers)

Market Analysis

The Market Analysis is made to formulate the company’s Market strategy based on its

competitive advantage. Thus, the risks of developing a company are evaluated. The success

of a new company relies on the analysis of four factors: the market, the competitors, the

customers, and the target market.

The Market

The market based on the sale of a gluten-free product is currently in a period of

expansion: it grows at a rate of 10% annually (Business Wire). Even though it is originally

focused on people being gluten intolerant (celiac), people of the world change their diets to

gluten-free diets. Indeed, 9 million people in Canada (28% of Canada’s population) reduced

their alimentation to only gluten-free products. Among them, only 1% are celiac, and 5%

have a gluten sensibility, which implies that 22% of them are gluten avoiders for no medical

reason, choosing a gluten-free meal for health issues (Gluten Free Agency, 2014).

Edmonton housing 932,546 inhabitants, could potentially be a market of 243,000

gluten-free lovers (Gluten Free Agency, 2014). This market would include families with a

celiac member, but also people wanting to lose weight (25%), people wanting to eat healthier

(25%), and people admitting feeling better after a gluten-free meal (40%) (Gluten Free

Agency, 2014). Indeed, a social trend is in favour of this growing market: a lot of studies
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GLUTEN-FREE FOOD INDUSTRY ANALYSIS
prove the quality of such a diet. Healthy, helping for physical performances, helping to lose

weight and helping digestion, these types of products attracts all type of age with all type of

way of living, from healthy families to strong athletes. An economic and technical trend

supports the choice of opening a company in this sector. The production of a gluten-free

product isn’t difficult from a technical point of view because it depends on a change in the

ingredients. For instance, to make flour, wheat or corn can be used. Currently, the exchange

rate of wheat in the world is CAN$243,799, more expensive compared to CAN$228/t for corn

(Terre-net, 2017).

The whole world of food is trying to take advantage of these trends. The pasta

company Barilla announces an investment of US$ 26 million at Ames, Iowa facility to

produce gluten-free pasta (Barilla Group, 2015). Thus, big companies participate in the

growth of the market, a market which will be worth CAN$4.7 billion within 5 years (Girard,

L, 2015).

For a small company as Moh’s Gluten-Free Bakery & Cafe, with 6 workers, the

market is enough to provide a profit.

The Competitors

But this market is not new and has to be shared. The competitors are a threat to the

success of a company.

In Edmonton, there are five majors’ competitors to Moh’s Gluten Free Bakery and

Cafe (see Table 1). The market of a gluten-free bakery in Edmonton is shared between two

types of companies, depending on the target market they chose to reach. Indeed, two patterns

are spotted in the strategy of the potential competitors. On the one hand, Kinnikinick fresh,

Buns&Roses Organic Wholegrain Bakery and Breadland Organic Wholegrain Bakery chose a
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GLUTEN-FREE FOOD INDUSTRY ANALYSIS
benefit leadership, increasing their quality of product, staff, environment, and therefore price.

With this strategy, they are aiming at people willing to pay a higher price for their health:

families, and older generations. On the other hand, RioVida gluten-free and Manufacturing

and Celebrate Gluten-Free decided to use a cost leadership. They are aiming at people

wanting cheap gluten-free snacks to share, by providing the accommodations and a

guaranteeing a low price: students or kids.

The social trend about the profits of eating gluten-free, encourage companies to invest

in this sector, which tends to increase the competition. Moreover, competitors can easily and

quickly bring a competing product to the market, as bakery recipes are patterned with

difficulty.

Thus, the weaknesses of our competitors lie in the quality of the product, the quality of

service, and the choice of products offered. As there is no leader, the customers are shared

and the price is regulated by the competitors aiming the same target market.

The competitors can be encountered by premium pricing, or by a better quality of

product and services. Indeed, the main advertisement used in this sector is based on the

customer's’ opinion. Most of them can be found on websites such as TripAdvisor or Yelp.

Customers

This specialized market is mainly ruled by the customers, who keep on increasing the

demand for the past few years. These customers are celiac people, their relatives, and people

following the social trend. This section of the population includes every category of people:

families, students, and old generations. Edmonton is a developing city of 316,575 families,

including 48.3% couples, 27% families with one kid, 20.6% families with 2 kids and 9.1%

families with 3 or more kids (City of Edmonton, 2014). The utility they can get from such a
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company resides in holding a breakfast, holding a meeting with snacks, holding an event,

each of them involving or celiac or gluten-free lovers. Their need could be daily, weekly or

monthly. As some competitors are already settled in the market, the factors influencing the

customer's’ choice can be found in the price, the quality of a product (taste and shape), the

quality of service (trusting a staff who could give advice, nice accommodations) and opening

hours. Having a “classic menu” could help reach their needs: by offering a product they can

trust over the years, in a sufficient quantity and with an affordable cost.

The example of an aimed customer could be a 32 years old mother, having two

children among which one is gluten intolerant and who likes grocery shopping healthy food.

Target Market

The most attractive market is obviously the gluten intolerant or sensitive people.

Edmonton is a developing city, with a demographic growth of 3.7% from 2012 to 2014 (City

of Edmonton), attracting families thanks to its location, bringing many students to the

university. The advantage of Moh’s Gluten-Free Bakery & Cafe can manage is its

specification. Most of its competitors are bakeries providing gluten-containing and free

products.

Thus, more than the gluten intolerant market, it could reach the health conscious

market and the condiment market for example.

Going gluten-free has been portrayed as a standard sensation saw by both out of need

and an individual decision towards accomplishing a more healthier approach to live

(Government of Canada, 2012). The gluten-free market has outperformed the low-carb trend

and is projected to develop as large as the lactose-free dairy industry (Gluten-Free Market

Trends, n.d). Since the diet’s rising popularity Canada’s Food and Drug Regulations have
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GLUTEN-FREE FOOD INDUSTRY ANALYSIS
taken actions to prohibit food manufacturers from selling any gluten protein in a food package

that is labeled as “gluten-free” (Government of Canada, 2012). As seen in Figures 1 and 2,

almost around ⅓ (10 million) of Canadians are searching for gluten-free items for medical

reasons, however 2.5 million of Canadians are looking for gluten-free items due to the

apparent idea that gluten-free items are a more beneficial towards our lifestyle (Agriculture

and Agri-Food Canada: GofC, 2015). Additionally, with the recent diagnosis of celiac disease

and gluten-free sensitivity, it has increased awareness of the conditions by both consumers

and healthcare professionals, it normally used to take up to 8 years for a diagnosis of celiac

illness (Gluten-Free Market Trends, n.d). Furthermore, Grand View Research (2017)

emphasized that the global gluten-free products market measure was esteemed at USD 14.94

billion in 2016 and estimates a compound annual growth rate of 9.3% from 2017-2025. As

indicated by Agriculture and Agri-Food Canada: GofC, (2015) , there were around 3,000 new

gluten-free snack item introductions in the U.S. from 2008 to 2010 and recently food

manufacturers are blending more ancient grains, such as quinoa and amaranth into their

gluten-free products to enhance their nutrient content (McCluskey, J.J., 2015). Since the

introduction of Gluten-free products, they have substantially enhanced in taste, quality and

nourishment, and consumers now have an array of ingredients and ready to eat meals to

choose from (Lee, A.R., et al. 2007). The most prevalent and noteworthy earning category in

the industry for baked commodities, which include cookies, crackers, cakes, cereal and other

baked goods as shown in figure 3 (Grandview Research, 2017). As observed in figure 4, small

niche gluten-free markets have had the opportunity to expand and now require

communication tools that go past informal messages, the internet allows for companies to
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GLUTEN-FREE FOOD INDUSTRY ANALYSIS
advertise their food products to target groups that are in urban and rural communities (Lee,

A.R., et al. 2007).

Michael Porter's five forces of competition determine the potential profit in the industry.

All five forces; entry of competitors, the threat of substitutes, bargaining power of buyers,

bargaining power of suppliers, and rivalry among the existing players are further discussed for

the gluten-free industry, specifically looking at the gluten-free baked goods industry. The

template for the tables that have been formulated to go with analysis of Porter’s 5 forces was

obtained from Autio (2005).

Entry of Competitors

The gluten-free industry has undergone a rigorous change from being considered

specialty niche products to being products accepted as part of a normal diet (Gluten-Free Market

Trends., n.d.). As mentioned previously an increasing number of individuals have started

consuming gluten-free products, not only because of being diagnosed with celiac disease but also

because of a general perception of maintaining better health. Due to the rapid growth of this

market, new establishments that enter the market make it harder for existing markets to thrive.

Granted, that most companies in the industry are smaller and are dispersed across North America,

making the gluten-free baked goods production somewhat fragmented (Gluten-Free Market

Trends., n.d.). In order to determine if new entrants can gain access to the market we looked at

factors such as (1) economies of scale, (2) product differentiation, (3) capital requirements, (4)

switching costs, (5) distribution channel accessibility, (6) cost disadvantages, and (7) government

policy. As we analyzed each one (see Table 2.1) we could come to the conclusion that Moh’s

bakery is threatened by new entrants in the market. Some ways to improve these conditions would
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GLUTEN-FREE FOOD INDUSTRY ANALYSIS
be to increase market awareness so that Moh’s Gluten-free Bakery & Cafe becomes more

recognized.

Threat of Substitutes

A substitute product is a product that appears to be different but can satisfy the same need

as another product, according to Porter, “Substitutes limit the potential returns of an industry by

placing a ceiling on the prices firms in the industry can profitably charge (Wheelen, T. L., &

Hunger, J. D., 2018). Since gluten-free baked products fall into the category of staple foods for

consumers who choose to intake gluten due to either personal choice or a health-related choice

there are a limited number of substitutes for some products. To further consider factors that can

threaten Moh’s bakery we looked into (1) primary customer market, (2) customer switching costs,

(3) price for substitute products and the quality of substitute product (see Table 2.2). The threat of

substitutes in the gluten-free bakery & cafe is moderately low and is not at risk due to the simple

fact that there is not a proper substitute for gluten-free products for people who chose to consume

gluten-free due to medical reasons.

Bargaining Power of Buyers

The power of buyers is the fourth aspect of Porter’s five forces, which will affect Moh’s

Gluten-Free Bakery & Cafe negotiation capabilities with buyers. Some factors that Moh’s would

look at are (1) the availability of substitutes for buyer, (2) product differentiation (3) switching

cost of the buyer, and (4) threat of forwarding integration by the supplier industry buyer (see

Table 2.3). Based on these factors, the power between Moh’s Bakery and the buyer lies mainly in

the hands of the buyer. To increase power over buyers, Moh’s will need to create a brand that the

consumer will have a particular interest in the organization's products. Once Moh’s focuses on

increasing buyer demand they will benefit by creating more incentives to attract customers.
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Bargaining Power of Suppliers

Suppliers can influence an industry through their capacity to raise costs or diminish the

nature of bought merchandise and enterprises (Lee, A.R. et al, 2007).To better understand the

bargaining power of suppliers, the factors observed (see Table 2.4) are (1) supplier market, (2)

availability of substitutes, (3) customer feedback, (4) supplier good differentiation, (5) switching

costs, and (6) forward integration threat. These factors reveal that a significant amount of power is

held in the hands of suppliers, again the best way to hold this power would be to expand our

market.

Rivalry among the existing players

The competitive rivalry of the industry is the last aspect of Porter’s five analysis, Moh’s

Gluten-free Bakery & Cafe used 7 factors to determine whether these factors increase or decrease

the rivalry amongst current competitors: (1) number of competitors, (2) industry growth rate, (3)

fixed costs, (4) storage costs, (5) product differentiation, (6) capacity costs, and (7) exit barriers

(see Table 2.5). Based on all these factors, the competitive rivalry at this level of production is

low. However, this is simply because of the extensive development found in this part, and

development levels of focused contention are required to increase. As new competitors enter the

market, Moh’s will need to reassess competitive rivalry. Until then, it would be beneficial to

come up with ideas to help decrease rivalry among new competitors as they enter.

3. The outline of the table was taken from Handout 1 “Examples of SWOT analysis”

by Mohammad Torshizi.
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Table 1: SWOT Analysis – Gluten-Free Bakery & Cafe

Strengths (Internal) Weaknesses (Internal)

· Ability to charge higher prices · Gluten products don’t stay fresh as long as
· Owner/chief baker with celiac wheat based pastries
disease experience · Expensive lease
· Only gluten-free bakery in downtown · Hard to adjust recipes to appeal to everyone’s
area taste

Opportunities (External) Threats (External)

· Increased market demand for gluten- · Competitors entering the market

free food · Development of gluten pill
· Movement towards healthier lifestyle · Possibility of forthcoming change in market
· Support of local businesses trends/consumer taste

4. Moh’s Gluten-Free Bakery and Cafe is a strong entrepreneurial opportunity in the current

and emerging market in Edmonton. In addition to satisfying the dietary needs of celiac patients,

gluten-free products are increasingly being sought by the general public, in pursuit of a healthy

lifestyle. Some of the large grocery chains offer a small variety of commercially produced

products. The emerging trend, however, is for consumers to shop in local, independent stores,

where customer service, product quality, and diversity are perceived to be higher. An

independent operation like Moh’s can better control quality and eliminate cross-contamination,

given they only trade in gluten-free products. The owner has significant experience with celiac

disease, and can, therefore, provide the business with valuable knowledge regarding celiacs. In

dealing with celiac people, the owner understands the restrictions people face in sourcing gluten-

free products. Given that gluten-free products have shorter shelf lives, grocery stores are reluctant
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to carry a large diversity and abundance of these products. A specialty bakery offers the type of

freshness and variety sought by consumers. Therefore, low price is not a priority for the

consumers, resulting in the potential for greater profit margins.

5. Moh’s Gluten-Free Bakery and Cafe has a competitive advantage over other businesses

in this industry because of where it is located, the products and experience it offers, and the

current market. Moh’s gluten-free Bakery will be located in the downtown Edmonton area, which

will bring the advantage of local business to the market. It is also a bakery that brings experience

to the market by having a person who has knowledge of celiac disease. It also specializes in a

very specific product and therefore caters to a specific group of consumers. Another advantage

Moh’s Bakery has is the current market it is entering. The gluten-free trend, as mentioned above,

is a very popular trend now and is attracting people trying to make changes to their diet to better

fit a healthy lifestyle, in addition to celiac people already buying gluten-free products.

6. Small firms were the first to begin producing gluten-free foods to solely meet the needs

of those with celiac disease. The first gluten-free foods developed were dry, crumbly, and

nowhere near as palatable as gluten-containing foods (Elgeti, D., et al. 2014). Still, the

introduction of these foods into the market met the needs of a small population. This small market

had no power to attract the attention of larger firms, until growing knowledge and increasing

diagnosis of the disease became widespread (Agriculture and Agri-Food Canada: GofC, 2015).

In this industry, innovation has been led by smaller firms that originally intended to produce

products in response to a dietary restriction, as the adherence to a gluten-free diet is the only

effective treatment for celiac disease (Agriculture and Agri-Food Canada: GofC, 2015). Today,

innovation in this field is represented by the ability to create new products that not only meet the

needs of those with gluten intolerance, but that also are palatable and have a texture and
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mouthfeel that resemble the desirable properties of gluten-containing foods (Elgeti, D., et al.

2014). While gluten-free foods were initially produced in response to the needs of the celiac

population, the gluten-free fad that developed among consumers in recent years led larger firms to

expand their business to include gluten-free products with the sole motive of profit.

Consumers prefer small, local businesses that exclusively produce gluten-free foods rather

than large companies that produce gluten-free foods in addition to gluten-containing foods due to

a lower risk of contamination. Small firms that originally discovered the market for gluten-free

foods propelled rapid growth in a way that induced larger firms like mainstream grocery stores to

carry gluten-free foods, thereby widely increasing the availability and selection of products for

consumers (Agriculture and Agri-Food Canada: GofC, 2015). The increasing popularity of the

gluten-free diet requires new firms to produce competitive products that are not only palatable but

also nutritious. Innovation in this industry is primarily done by smaller firms who are genuinely

motivated to develop new products that meet the needs of celiacs without lacking in other

properties and plan to do so long after the gluten-free diet is no longer a trend. Small firms that

are exclusively gluten-free must invest in developing products that mimic the desirability of

gluten-containing products, whereas larger firms may no longer be interested in producing these

goods when the gluten-free diet is no longer popular. The innovation of these competitive

products by small firms has lured larger firms into the market, which can partly account for the

current popularity of the gluten-free diet.

Figures and Tables

Figure 1
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Figure 1 depicts the number of Canadians looking for gluten-free products (Agriculture and

Agri-Food Canada; Government of Canada, 2015)

Figure 2

Figure 2 shows a detailed reason for consuming gluten-free products (Agriculture and Agri-Food

Canada; Government of Canada, 2015)

Figure 3

U.S. gluten-free products market revenue by product, 2014 - 2025 (USD Million)
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Figure 3 compares the estimated market revenue for specific categories of gluten-free products

(Grand view Research, 2017)

Figure 4

Figure 4 describes the availability of gluten-free products in different marketplaces (Lee, A.R.,

et al. 2007)

Table 1 Major Competitors

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Competitor Attraction Basic information

Kinnikinick Fresh Take-Away $31 – 60

Good for Kids 3.9 km from
Good for Groups downtown
Casual Opening hours:
Quiet 10am – 6pm
Cater

Rio Vida gluten-free & Take Away < $10

manufacturing Good for Kids 9.4 km from
Casual downtown
Outdoor seating Opening hours:
12pm – 5pm

Celebrate gluten-free Take away < $10

Bike parking 6.4 km from
Good for Kids downtown
Quiet Opening hours:
Casual 9am – 5:30pm
Caters

Buns&Roses Take Away $10 – 30

Organic Wholegrain Bakery Staff patient and nice 5.7 km from
Organic and dairy free downtown
products Opening hours:
9:30 – 5:30

Breadland Take Away $10 – 30

Organic Wholegrain Bakery Parking lot + Bike parking 2.4 km from
Inside seating downtown
Nice decor Opening hours:
9:00am – 6:00 pm

Table 2.1 Entry of Competitors

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Threat of New Entry Impact on Justification

force
Economies of scale Increases Because Moh’s is a local and small start up business
→ Low threat of we will not be producing large quantities of our
entry. products yet. Therefore our business will not be
incurring high economies of scale
Product Increases Moh’s is unable to produce above quantity, limiting
differentiation → Low threat of ourselves from offering what other competitors are
entry. capable of doing. As new entrants increase it will hard
for us to keep adding a range of items on the menu.
Capital requirements Increases Obviously, start-up products will require start up
→ Low threat of investment but it is low enough that most competitors
entry. entering the market will be able to invest in capital.
Switching costs → Increases The cost a consumer will incur if switching products
Low threat of are the sunk costs of having bought the original
entry. products.

Access to Increases Another company is easily able to enter the

distribution threat of distribution channel.
channels → Low entry.
Cost disadvantages Increases New entrants will find it quite easy to replicate
independent of scale threat of production and distribution of other smaller
→ Low entry. companies.
Government policy Increases With government involvement being low as to
→ Low threat of restrictions and requirements it is not difficult for
entry. competitors to meet government standards.

Table 2.2 Threat of Substitutes


GLUTEN-FREE FOOD INDUSTRY ANALYSIS
Threat of Substitutes
Customer market
dominated by few
large customers →
Moderate
Customers face few
switching costs→ Low
Substitute product’s
price is lower →
Moderate
Substitute product’s
quality and performance
characteristics are equal to
or greater than those of
the competing product →
Moderate
Table 2.3
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Impact on force Justification
Increases power Most people visiting gluten-free bakeries like
of substitutes to visit because they either have celiac
disease, are gluten intolerant or they choose
to not consume gluten, however, people that
just want to enjoy our cafe for none of the
above reasons are most welcome.
Increases power Most gluten-free bakeries have similar prices
of substitutes and it’s easy for customers to switch from
one bakery to another without facing high
switching costs.
Decreases Non-celiacs can choose gluten-containing
power of product over gluten-free one in the long run
substitutes if gluten-free products are relatively more
expensive for them. Celiacs don’t have such
an opportunity, they can only switch to
another gluten-free option.
Neutral If non-celiacs don’t experience problems
consuming gluten, it may be more beneficial
for them to consume gluten-containing
products, both economically in terms of a
lower price and physically in terms of health.
Celiacs don’t have such an opportunity as
going gluten-free is essential for them, even
if the price of gluten-free products is higher
and quality may be lower.
Bargaining Power of Buyers
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GLUTEN-FREE FOOD INDUSTRY ANALYSIS

Power of Customers Impact on Justification

force
Availability of substitutes Decreases The only substitute for gluten-free bread is
→ High power of simply regular bread, therefore customers do
customers not have buying power here.
Customer good Increases It is difficult to differentiate products from
differentiation → Low power of most gluten-free bakeries from other
customers competitors unless you have a specific
preference.
Customer switching Decreases Negligible switching costs unless lost some
costs → Low power of regular customers. Customer turnover is
customers relatively low to moderate since gluten-free
market is a narrow niche (1% of Canadian
population are celiacs)
Customer forward Increases Since each bakery has a unique image and
integration threat → power of menu it depends on customers which one to
Moderate customers choose/switch to.

Customer market
dominated by few large
customers → Moderate
Increase the Moh’s bakery welcomes every person, gluten-
power of free diet, celiac, regular diet, however, we
customers cater to the needs of people with celiac disease
or people looking for gluten-free diet
specifically.

Table 2.4 Bargaining Power of Suppliers

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GLUTEN-FREE FOOD INDUSTRY ANALYSIS

Power of Suppliers Impact on Justification

force
Supplier market Increases Most gluten-free bakeries are locally owned,
dominated by few large power of however gluten-free baked goods can be
suppliers→ Moderate suppliers purchased at large food chains but there is no
guarantee that it is a 100% gluten-free.
Availability of substitutes Increases There are no substitutes for gluten-free, the
→ Low power of alternative would be to purchase a regular
suppliers baked good.
Supplier goods’ Reduces We value our customers feedback to make sure
criticality → Moderate power of they are satisfied with their service at Moh’s.
suppliers
Supplier good Reduces Most mom and pop bakeries serve popular cafe
differentiation→ power of foods however most also have their own
Moderate suppliers special recipe that differentiates them from the
others.
Supplier switching Reduces Switching from one supplier to another might
costs → High power of hurt our bakery since we do not get the same
suppliers prices across the market.

Supplier forward Increases Moh’s identifies as a competitive cafe,

integration threat → power of therefore we have loyal customers and are able
Moderate suppliers to supply products found within the local
community. Among those also include
homemade & unique recipes.

Table 2.5 Rivalry among the existing players

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Intensity of Rivalry Impact on force Justification

Numerous or Increases competitive Big companies also sell similar gluten-free
equally balanced rivalry ready-to-eat or cook-at-home baked goods at
competitors → a lower price.
High
Slow growth industry Increases competitive Gluten-free bakeries and cafes are
→ Low rivalry becoming more popular. Small chains like
us are competing with regular restaurants,
cafes and bigger grocery store chains apart
from just gluten-free bakeries.
High fixed costs → Reduces competitive When fixed costs are lower that means they
Moderate rivalry compete on the same level as our gluten-free
bakery
High storage costs→ Reduces competitive When storage costs are lower we have less
moderate rivalry problem with over capacity

Lack of Increases competitive Customers have a variety of options to

differentiation or rivalry choose from when switching brands or
switching costs → locations.
Low
Capacity added in Reduces competitive There are only so many gluten-free products a
large increments → rivalry supplier can provide, even bigger chains will
Low have similar products but more quantity.
High exit barriers→ Reduces competitive Since there are not extremely high capital
Moderate rivalry requirements, other competitors can strive if
their company continues to make a profit.
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Gluten-Free Products Market Analysis By Product (Bakery, Dairy Alternatives, Desserts & Ice-

Creams, Prepared Foods, Pasta & Rice), By Distribution (Grocery Stores, Mass

Merchandiser, Club Stores), And Segment Forecasts, 2014 - 2025. (2017). Retrieved

September 29, 2017, from http://www.grandviewresearch.com/industry-analysis/gluten-

free-products-market
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GLUTEN-FREE FOOD INDUSTRY ANALYSIS
Government of Canada. (2012) . Health Canada's Position on Gluten-Free Claims. Retrieved

September 30, 2017, from https://www.canada.ca/content/dam/hc-sc/migration/hc-sc/fn-

an/alt_formats/pdf/securit/allerg/cel-coe/gluten-position-eng.pdf

Lee, A.R., Ng, D.L., Zivin, J., & Green P.H.R. (2007) . Economic burden of a gluten free diet.

Journal of Human Nutrition and Dietetics, 20, 423-430.

McCluskey, J.J. (2015). Changing Food Demand and Consumer Preferences, Federal Reserve

Bank of Kansas City - Agriculture Symposium, 1-18.

Wheelen, T. L., & Hunger, J. D. (2018) . Strategic management and business policy:

globalization, innovation, and sustainability. New York, NY: Pearson.

Why a Gluten-free Agency ?. Gluten-Free Agency. (2014), from

http://thegluten-freeagency.com/why-a-gluten-free-agency/
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GLUTEN-FREE FOOD INDUSTRY ANALYSIS