Surprisingly, given that the terms 'vegan' and 'plant-based' are used largely interchangeably, consumers' perceptions of the two differ markedly, the latter seen as much more appealing. Food/drink labelled as plant-based sparks more positive associations across a variety of sought-after factors than products labelled as vegan, including nutrition, flavour, sustainability and naturalness. This illustrates the importance of terminology when marketing these products to shoppers.

Following a slowdown in 2019, sales growth in the free-from foods market accelerated again in 2020, with value sales rising by 16.9% year on year to break through the £1 billion ceiling. The market benefitted from the influx of new buyers amid the grocery stock shortages at the start of the COVID-19 outbreak, as well as from the dramatic shift from foodservice to retail driven by the pandemic.

Worsening financial wellbeing and more cautious spending habits arising from the economic disruption brought about by the pandemic will make the free-from market’s poor associations with good value for money an even greater barrier. This is likely to see ‘lifestyle’ users in particular reduce their spending or drop out of the category altogether. This points to an urgent need for brands and retailers to try to overturn these perceptions to keep their place on consumers’ shopping lists.

With the pandemic set to add more fuel to the nation’s sustainability drive, the environmental benefits of consuming less dairy will become an even more persuasive selling point for the dairy-free segment. However, for products to stand out on this front in this increasingly crowded space, they must go the extra mile in sustainability, extending this to the product’s all-important lifecycle impact.

• The impact of COVID-19 on the free-from foods market.

• The outlook for the market in the re-emergence from the COVID-19 pandemic and recovery up to 2025.

• The latest new product development (NPD) trends.

• Consumers’ habits around food/ingredients avoidance and buying free-from products.

• Consumer behaviour surrounding and attitudes towards free-from food/drink.

• The qualities consumers associate with different types of free-from products.

The first COVID-19 cases were confirmed in the UK at the end of January 2020, with a small number of cases in February. The government focused on the ‘contain’ stage of its strategy, with the country continuing to operate much as normal. As the case level rose, the government ordered the closure of non-essential stores on 20 March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March. It wasn't until 15 June that non-essential stores were allowed to re-open, followed by pubs, restaurants, hotels and hairdressers on 4 July, and many beauty businesses on 13 July.

By September 2020, it had become clear that the UK was at the start of a second wave, and social distancing measures were intensified. Continued increases in infection numbers led to Wales implementing a two-week national lockdown from 19 October, England announcing a month-long lockdown from 5 November, and Scotland introducing a new five-level system of coronavirus restrictions. 

Despite these restrictions, however, case numbers continued to increase. All four UK nations tightened restrictions in January 2021, effectively leading to a full UK-wide lockdown. On 22 February, Boris Johnson announced the roadmap to an easing of restrictions in England, starting with the re-opening of schools on 8 March, followed by easing of restrictions on outdoor gatherings on 29 March, and with a hoped end to all restrictions by 21 June. The Welsh and Scottish governments also gave more details on their plans to ease restrictions, with both nations taking a slightly more cautious approach to the one planned for England.

The UK’s vaccination programme started on 8 December 2020, and with the Pfizer-BioNTech, Moderna and Oxford-AstraZeneca vaccines licenced for use in the UK, the government aims to offer a first dose of the vaccine to 32 million people by mid-April.

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its November 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP will have fallen by 11.3% in 2020, recovering by 5.5% in 2021, and 6.6% in 2022. GDP isn’t expected to return to pre-COVID levels until the fourth quarter of 2022. The central scenario has unemployment peaking at 7.5% in Q2 2021.

The current uncertainty means that there is wide variation on the range of forecasts, however, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q4 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

The second wave of infections and subsequent lockdowns means that the short-term prospects for the country are consistent with the OBR’s negative scenario, but this needs to be balanced against the fact that the vaccine rollout is ahead of even the OBR’s central scenario. Medium- to long-term, then, we are still basing our forecasts and market analysis on the OBR’s central economic scenario.

For the purposes of this Report, Mintel has used the following definitions:

Free-from foods are defined as foods that are manufactured and targeted specifically at consumers who suffer from food intolerances and/or food allergies or who are following avoidance diets. Foods that have been specifically manufactured (eg pasta, bread) to cater for a gluten-free diet, for instance, are included within this definition.

Food targeted at intolerance and allergy sufferers includes:

• Gluten-free: Gluten is found in a range of cereals, including wheat, barley, rye and spelt. Gluten-free products can contain other allergenic proteins from wheat.

• Wheat-free: Wheat-free products can contain gluten from other cereals such as barley or rye.

Despite these exceptions, the majority of wheat-/gluten-free products are marketed as being both wheat- and gluten-free, as gluten is present in wheat.

• Dairy-free/lactose-free: This category includes all cow’s milk alternative products, including lactose-free dairy products and non-mammalian milk alternatives (eg soya-based, rice-based and others).