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Boulder Brands Rolling Over Competition to Capture Gluten-Free Market

Image credit: Boulder Brands

You have probably heard the saying, “You can only pick two out of the three options listed: cheap, fast or good.” What happens when the lesser two of those choices in terms of health (cheap and fast) are applied to all products containing wheat? A population with gastrointestinal discomfort, digestive problems, and in some cases, celiac disease.

The number of people claiming to be sick from gluten is multiplying faster than ever before, and consequently the “gluten free” lifestyle has evolved into a societal phenomenon. The lifestyle has moved from beyond its trendy connotation into a practice that is helping many Americans sustain their health over the long term. While it appears as though the gluten-free lifestyle trend was born after a flurry of celebrity and popular culture endorsements, there is actually a scientific rationale for the diet adjustment. Around thirty years ago, a new strand of glutenous wheat was developed that made flour production inexpensive and rapid — and now that pesky protein is in everything. Since then, over 40 million people worldwide have developed an intolerance for gluten; in fact, the number of gluten-free shoppers has doubled in the past five years. 

These consumers have a challenge, though, given the lack of products and foods available to accommodate their needs; "gluten free" almost always refers to a lifestyle, not a category delivered by brands. But Boulder Brands (which includes Smart Balance, Udi's, Glutino and Earth Balance) is dominating market share with its popular range of cookies, bagels, pizzas and other gluten-free products. The company is the leading supplier to the nation’s largest chains and retailers.

But a gluten-free lifestyle increasingly holds appeal for more than just the gluten intolerant: In the UK, 5-6% of the country’s population has gastric-related problems related to gluten, yet according to Just-Food, 16.5% of the population opts for gluten-free products. And Americans seem to be following suit: Over the past three years, the percentage of wheat bread sales in the U.S. has fallen from 80% of total bread sales to 69%. The decline in bread sales could signify that Americans are beginning to make more thoughtful decisions where their eating habits are concerned. While benefits of a gluten-free diet are debatable for those who are not intolerant, gluten-free living has become the latest trend in healthy living and many people who eliminate gluten from their diets report feeling better.

In addition to providing hungry celiacs the option to replace everything from breakfast bars to breadcrumbs with a gluten-free substitute, Boulder Brands sets itself apart by maintaining completely gluten-free manufacturing facilities. Companies often focus more on keeping their products gluten free but overlook their own facilities, leading to a counterproductive cycle. Waste from glutenous wheat used for other products can be left in multi-purpose machines, eventually making its way into products meant to be gluten free. This introduces risk for those with celiac disease and, needless to say, misrepresents the nature of the product. Boulder Brands’ example makes them a leader in the trend, where distributors who have gluten-free on product labels are required to produce foods in a gluten-free facility. In fact, the FDA just decided to standardize gluten-free labeling, which puts Boulder Brands in an even more advantageous position.

As Boulder Brands continues to create delicious, healthy solutions for a large segment of the population, we see it as a company with opportunities for positive growth. As more consumers look to a gluten-free lifestyle for potential health benefits, Boulder Brands could capture the cornerstone of the market.

All of the specific securities identified in this article are current recommendations of Reynders, McVeigh Capital Management, LLC (“RMCM”) on behalf of its advisory clients. The specific securities identified and described do not represent all of the securities purchased, sold, or recommended for RMCM’s advisory clients and the reader should not assume that investments in the securities identified and discussed were or will be profitable. Past performance is no guarantee of future results.


Patrick is widely recognized as a pioneer in bringing traditional investment management together with socially responsible investing as President and Chief Investment Officer of Reynders, McVeigh Capital Management. With 26 years of experience in the industry, he was one of… [Read more about Patrick McVeigh]


Chat brings more than 20 years of experience in investment management and social venture investing to Reynders, McVeigh Capital Management. His passion for forward-thinking investment strategy rooted in fundamentals has provided a guidepost for his success to date. In addition…
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