Back in February, General Mills announced that five varieties of gluten-free Cheerios (Apple Cinnamon, Frosted, Honey Nut, Multi Grain, and Original) would be available nationwide for purchase later in the year. With the launch of gluten-free Cheerios in recent months, General Mills embarked on one of the company's largest marketing offensives for cereal in many years.
It was great marketing, food is all about chasing the latest fads. But it was not without missteps. On October 5th they recalled 1.8 million boxes of original and Honey Nut Cheerios labeled gluten-free because they contained wheat and the U.S. Food and Drug Administration (FDA) had received 125 complaints from consumers who ate gluten-free Cheerios and experienced gastrointestinal problems.
"Cheerios' move into the gluten-free category was perhaps inevitable considering the brand's popularity coupled with the allure of the growing gluten-free cereal segment," says David Sprinkle, research director for Packaged Facts which published Gluten-Free Foods in the U.S., 5th Edition. "Even excluding sales of General Mill's Chex, we estimate that sales of gluten-free cereal increased 18% between 2013 and 2014 to reach $38 million last year."
In Gluten-Free Foods in the U.S., 5th Edition, Packaged Facts reveals that year-over-year growth in the gluten-free foods market has been impressive with sales of key categories (salty snacks, cracks, pasta, bread, cold/ready-to-eat cereal, cookies, baking mixes, frozen bread/dough, and flour) experiencing a compound annual growth rate (CAGR) of 34% over the five-year period ended in 2014. With sales already exceeding $1 billion, continued consumer concern over the negative health effects of gluten will help the market approach $2.5 billion in 2019.
"The recall was unfortunate and will ultimately prove to be a learning experience for General Mills. But General Mills has already made considerable inroads in the gluten-free market and will undoubtedly continue to thrive and find success providing consumers with gluten-free alternatives to the brands they know and love," says Sprinkle.
"To create the gluten-free cereal initially, General Mills made big investments to remove the traces of wheat, rye, and barley that typically came in contact with the brand's whole oat supply either at the farms where the oats are grown or during transportation of the whole oats to the mill. This past February, Jim Murphy, president of the Cereal division at General Mills, declared Cheerios' dedication to producing gluten-free cereal to be the biggest news since the brand's "commitment to whole grains in every box." The successful introduction of gluten-free Cheerios comes after almost after almost a decade of planning, with the project beginning in 2007 around the same time that General Mill's Chex brand moved toward becoming the first mainstream gluten-free cereal.