Gluten-free bread ranges have been available on the shelves in the West for quite a while—it's considered healthy, trendy and you can find a wide selection of choices. The first gluten-free products were launched in the beginning of 1980s and the products were mainly found in health food stores until beginning of 2000, where after they have gradually become more mainstream depending on geographic location. Europe is the most significant gluten-free bread market, especially with increasing demand from millennials. Other regions like Asia-Pacific and North America are expected to have a major demand increase the coming years, and small and midsized food manufacturing companies are investing in the product category to meet this demand. The total global market value for the gluten-free segment is estimated to grow between 2020 and 2025, from $5.6 billion USD to 8.3 billion USD. This growth also includes increasing demand by consumers who do not as such suffer from gluten intolerance but still prefer using gluten-free products.
While the demand and growth of gluten-free category has been significant in the West for several years, the demand is only now taking wind in the East. For instance, in Russia, the gluten-free products are only now becoming visible on the shelves for consumers. This low availability of gluten-free products and the interest spurred from the West was something Sapsan construction company in Russia, with 30 years of history in property development in the Moscow region, realized to be a significant market opportunity. Sapsan decided to move ahead and acquire machinery for a bakery that could produce gluten-free products, but recognized that the general experience and recipes were lacking. This is when they decided to contact the Finnish bakery consulting group Baron Foodtech from Finland who also assist companies in the development of new recipes for new markets. Six months later, the Sapsan company had a new gluten-free bread range on the shelves in Russia, with 7 different breads. And what was even more impressive, Sapsan company is a construction company who decided also to diversify to the bakery industry.
“In 2018, we decided to diversify our business and to take a step in to the bakery business with a gluten-free bakery. At that moment we did not know anything about gluten-free production, but we sensed the market potential for this in Russia. As we do not have enough experts in gluten-free production in Russia, we contacted Mr. Mikko Lehtinen, the experienced CEO of Baron Foodtech with an assignment to help us to develop seven different kind of doughs for our gluten-free bakery. Test baking with Baron Foodtech helped us to understand a lot, from zero to total concept of gluten-free production. 6 months later we had 7 amazing gluten-free products, and now our gluten-free 'Foodcode' brand is number one gluten-free bread producer in Russia, with award winning products from Russian forums and exhibitions," says Rustam Urazbakhtin, Foodcode.
Bakery consultants Baron Foodtech developing recipes and new business for companies
Finland is known for their wide selection of breads, with long history and latest innovations, using clean and healthy ingredients. Finnish regionally famous bakery brands as Fazer and Vaasan operate in whole Scandinavia, Baltics and Russia, and their brands are considered top shelf brands on the bread market. Global markets are constantly eyeing the trends from the Nordics, and this is exactly how a construction company in Russia decided to take a deeper look at the way the Finnish consultants Baron Foodtech could help.
Baron Foodtech is a bakery consultant company, helping companies in bakery planning, relocations, upgrading bakeries, budgeting and profitability estimations, and development of new recipes for new audiences and markets. The team is headed by General Manager Mikko Lehtinen with more than 32 years from the bakery market in the Nordics, Baltics and Russia.
“The Sapsan case with the new Foodcode gluten-free products was a very interesting and fast paced product planning process. The company had correctly analysed the demand and market potential for gluten-free products, so time and efficiency were key to success in this case. Still, we took the planning process back to basics. We don’t offer ready ingredients as industry leaders in bakery consulting do, but instead we do custom recipes from raw ingredients, how to prepare ingredients and how to actually bake. Real and traditional slow baking in its purest form is our motto. Not only do you get a unique product, but you do also easily cut your costs with 50 percent when you know the correct recipes and processes.”
Russia and global market potential for gluten-free products
Comparing Russia with the Nordics, the large and populous country’s markets may not be as developed, but they present significant market potential large companies seeking growth just can’t afford to overlook. The population of Russia (145 M) is roughly equal to that of Germany and France combined, it has a massive market potential today. After Turkey and Germany, Russia is among the top bread consumers in the world with 80kg bread consumption per capita annually. In terms of gluten-free products, the expected annual growth today is in the range of 8-10 percent annually, and the price premium as far much higher than in other saturated markets. The largest Russian cities (Moscow with a population of 10M, St Petersburg pop. 5M, Novosibirsk pop. 1,4M, Ekaterineburg pop. 1,3M) are the drivers for the demand of new gluten-free products, due to the bigger purchasing power, extent of exposure to new foreign concepts and availability of options their population has compared to other areas. Today, some development in the demand for specialization in categories, as gluten-free going to gluten-free, clean label, vegan, etc. can already be seen in Russia.
“Sapsan bravely hit the sweet spot in the bakery business today in Russia with the gluten-free products and were able to conquer the top spot in a minimum time. We at Baron Foodtech see that Russia is just one of many other markets that still are just developing in specialized bread and baking product categories. With today’s technologies and integrated global knowledge resources, a bakery can fairly easily take the next step to develop their bakery business to the next level, even if they are not even in the bakery business as the Sapsan company. Our team from Baron Foodtech is there to help those companies," says Mikko Lehtinen from Baron Foodtech.
With approximately 2 percent of the population diagnosed as having celiac disease, Finland ranks among the highest rates globally. Increased interest towards better nutrition and healthier dietary choices has resulted in around 5-15 percent of the Finnish population using gluten-free products on regular basis. The bakery industry in Finland has acknowledged this trend and as a result today you can find a wide variety of gluten-free bread products available in the market from all major bakeries.
About the Foodcode gluten-free bakery initiative success and recognition
Overall, the launch has been a great success. Foodcode production of bakery and confectionery products is unique in the Russian market, made exclusively from natural ingredients without gluten and artificial additives. The production was launched in 2020 in the Volokolamsk district of the Moscow region and has been recognized both nationally on a federal level in Russia as well as internationally. In November 2020, the Foodcode project was awarded an honorary award, the APEC BEST AWARD Grand Prix, which is held at the APEC site of the Ministry of Economic Development of the Russian Federation and the OPORA RUSSIA Committee for the Development of Women's Entrepreneurship. Using natural ingredients instead of ready-to-use flour mixes has also proven to be an economically lucrative, making production around 50 percent cheaper while achieving an end result that that has been appreciated in the market for its taste, texture and nutritional values. The gluten-free bread top sellers from Foodcode are the corn bun and the Cantuccini.
About Baron Foodtech:
Baron Foodtech was founded in the year 2001. The company is located in Nastola, Finland. Baron Foodtech’s employees have combined over 60 years of experience. The services include technical expertise, design and consulting and product development in the Baron Foodtech’s own state of the art test bakery. The company’s technical services include expert level dismantling, installation and commissioning of machinery and software. Design and consulting services help the customer optimize and maximize profit on machines, production lines and complete factory solutions. The product development creates or revamps the customer’s products that are at the same time tasty and cost-efficient. Baron Foodtech operates in multiple regions and countries, including Europe, Middle East, Russia and USA.
