Fresno businesses take bite of specialty food market

Popularity of specialty foods could mean big bucks to Valley

The Fresno BeeJanuary 28, 2014 

Gluten free, dairy free, all natural, paleo diet. The list of dietary restrictions and ways of eating is endless.

But every entry has one thing in common: big opportunity for Valley food producers. These niche markets are sprouting into multi-billion dollar industries. Tweaking just one ingredient can make the difference between a local product landing on Whole Foods' shelves or being ignored by the retail giant.

"You have retailers who are looking for these specialty foods," said Amy Fuentes, the city of Fresno's local business initiatives manager. "If small companies can meet that need, the economic opportunity for them to grow their business is huge."

It's a trend organizers of the Fresno Food Expo have noticed among buyers attending the show. Market leaders like Trader Joe's, Whole Foods and Costco are looking for specialty foods to meet demand as consumers get more health conscious -- either by choice or because an allergy forces them to.

K.C. Pomering has experienced it firsthand with her G-Free Foodie Box Club. The service is geared toward customers who have problems with gluten, a protein found in wheat and other grains. Each month she mails out boxes containing at least five gluten-free, high-quality foods to subscribers who pay $29 a month. She started the boxes in July, packing them in her office inside a converted garage in her Madera home.

By December she had moved the operation to a local warehouse and shipping company, which helps her pack and mail hundreds of boxes nationwide.

Last week, three workers filled boxes with gluten-free triple-chocolate brownies, bottles of Rosenthal olive oil from Madera and "frog balls" -- jars of spicy, pickled Brussels sprouts from Paso Robles.

Not every item is local, but a minimum of one each month is from central California. Producers -- often small ones -- submit foods for consideration and Pomering discovers many of them in her travels around the country to gluten-free events.

Pomering has owned a food marketing and public relations company for years and is from a longtime farming family, but she didn't set out to sell gluten-free food. After being diagnosed with celiac disease -- an autoimmune disease in which eating gluten causes intestinal damage -- she launched the G-Free Foodie website in 2010. It features recipes, bloggers and other information for people going gluten free and has more than 25,000 "likes" on Facebook.

At the start, Pomering would post a picture of a gluten-free product she was trying -- say, a lemon olive oil -- on Facebook or Instagram and then get deluged with responses.

"Twelve people would go, 'Oh my gosh, where do we get that?' " she said.

That scramble for safe foods inspired Pomering to start the subscription boxes. She also started offering a dairy-free box last summer and followed up with a nut-free box in September.

Over the holidays, the company started a Kickstarter campaign, promising to add three new types of boxes if it could raise $12,000 in 30 days from online backers.

Video for G-Free Foodie Box Club's Kickstarter:

Not only did it raise the money two days before the deadline (56% of Kickstarter campaigns never make their goals), it also brought in an extra $3,212.

The company is now working on adding a box that contains organic and non-genetically modified foods, a "paleo" box with foods that don't have grains for people following the paleo diet and a top-eight allergens box. That one has foods that don't contain the most common allergens, including wheat, soy, peanuts and shellfish.

Who's buying?

Companies like Pomering's and others may be selling to a niche, but it's a growing market. For example, about 1% of the population has celiac disease. But even more people have a sensitivity to gluten, meaning it can cause problems even though they don't have celiac disease. Pomering's customers include families where one child has a sensitivity to gluten but a mom cooks gluten-free for the entire family, and foodies who just like the food.

About 18% of adults nationwide are buying or consuming food labeled gluten free, according to a Packaged Facts study from 2012, the latest available. Gluten-free foods are estimated to be a $6.6 billion market by 2017, its expansion driven by growing awareness, and friends and family who change their eating habits to support loved ones, the research shows. Many people who have one food allergy or gastrointestinal problem tend to have others, leading to broad changes in their diet, Pomering said. And after the Centers for Disease Control and Prevention found that children with autism are more likely to have gastrointestinal problems, many parents started feeding them a diet free of gluten and the milk protein casein.

It's all part of a broader trend of people paying more attention to where their food comes from and what's in it, said Fuentes, with the city. Retailers are looking to meet that demand, she said.

Caty Perez of Fresno is one of the consumers driving this trend. She has nut and tomato allergies and an intolerance for sodium. Perez, the mother of a 4-year-old, always tries to buy local and organic food. She also often cooks for her mom, who is gluten free, corn free, sodium free and nut free. It's a diet that can take a bit of running around.

"We go to Whole Foods. We go to Kristina's (Natural Ranch Market), shop online for gluten-free ingredients," Perez said. "In order to keep our family healthy, we go to whatever lengths it takes."

Opening markets

By tailoring products to special needs, Valley companies can get into new markets. When Debi Franklin of Fresno launched Deb's Gourmet, Whole Foods never would have considered carrying her sweet and smoky chipotle pickled jalapeños because they contained artificial preservatives. So Franklin switched to a natural preservative that allows her to call her jalapeños preservative free and all natural. After that change, she signed a deal with Whole Foods and her jalapeños will be on the shelves at four Whole Foods stores in the coming months.

"All natural" can seem like a marketing gimmick, but Franklin said she appreciates how much some customers care about it.

"That is a big selling point," she said. "I've been amazed. I've had people buy it simply because it says preservative free."

Flavia Takahashi-Flores, the Fresno maker of P• DE• Qs, is taking her business to the next level, too. In addition to selling her gluten-free Brazilian cheese bread to the public, she also sells her gluten-free bread to local bakeries and pizza dough to local pizzerias.

She's gearing up to mass produce Cheesy Qs -- like gluten-free Cheez-It crackers -- that she will launch at the July 24 Fresno Food Expo with hopes of getting them on retailer shelves.

At last year's food expo, Bella Viva Pure & Natural dried fruit slices won the new product award. But it was the fact that they were sulfite free that immediately attracted representatives of Trader Joe's and Whole Foods to the company, which is based near Modesto, Fuentes said.

Employees at Modesto-based Cold House Vodka are used to customers emailing to ask what goes into their vodka, since liquor bottles aren't required to list ingredients.

"People will ask us, 'What is your vodka sweetened with? I'm allergic to aspartame. Is it made with gluten?' " said director of marketing Ashley Cherry.

The vodka is gluten free -- it's made from corn, not wheat like some vodka -- and uses natural flavors. The company is adding "gluten free" stickers to its bottles and may add "all natural" to its label as it prepares to woo buyers from Trader Joe's and Whole Foods, Cherry said.

"We're hoping that does open the door," Cherry said. People are "trying to be healthy and we think that there's a market for it."

The reporter can be reached at (559) 441-6431, bclough@fresnobee.com or @BethanyClough on Twitter.

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