The gluten-free market is experiencing huge growth with global sales expected to reach more than $4.3 billion within the next five years, according to recent Data monitor analysis (food product design, 2010). The U.S. market is expected to grow by more than $500 million by 2014, which would make the United States 53 percent of the global market (food product design, 2010). The U.S. market for gluten-free products is expected to grow from $1.6 billion in sales in 2008 to $2.6 billion by 2012. More than 225 marketers introduced new gluten-free products in 2008.A growing number of consumers today are interested in gluten-free diets because of the inflammatory disorder known as celiac disease, which according to National Institutes of Health estimates, may affect three million or about 1 in every 100 Americans (USA rice, n.d). However, the gluten-free market, which is still in its early growth, is expected to achieve higher growth rates (31%) from 2011 to 2014(Agriculture and Argi-Food Canada, July 2011).
According to sources of gluten-free products the number of companies operating in the gluten free industry in the United sates alone is 201 companies. Canada has 23 companies and there are 280 companies in total in countries like Sweden, Israel, Italy, United Kingdom, Germany, Hong Kong, Malta, Switzerland and this number also include vendors that manufacture gluten free beer (Michael Jones and Bill Elkus (1995-2012).
Barriers to Enter Industry
• Government regulation:
An industry like the food industry has to follow strict government rules and regulations. These could be at varying levels such as local, regional, national and international rules and regulation for food production and sale. This also means the quality of food, safety of food and all other activities. This could restrict new entrants to enter the market because it takes up a lot of time and resources to follow all the government rules and regulation.
• Start-up Costs
Acquiring the financial services to start-up a business into an industry can be very challenging. Thus, entering and industry can be very costly.
The most important factor in the start-up of a business is the cost of acquiring capital. The food industry you need a lot of large amount of expensive capital and the most important being factory; to make the food products and store them we need to have the facility. Also, if the new entrant wants to be competitive with already existing firms they need this capital. The more capital that is needed and the more expensive the capital is, the higher the entry to barrier (BARRIERS TO ENTRY, n.d).
Marketing is very essential in order to get consumer’s attention. Advertisement, brand name recognition and promotions of products cost a great deal to business owners and an industry with several well-established brand-names…