This morning I went, perhaps for the last time, to my local Starbucks (Nasdaq: SBUX ) to have coffee and a treat and spend a couple of hours working. I ordered what has become my usual pairing in recent weeks -- a latte and a Valencia orange cake.
"I'm sorry," said the barista, "but we aren't carrying the Valencia orange cakes anymore. Would you like something else instead?"
Um, for me, you don't have "something else."
See, I recently found out that I have celiac disease. It's a lifelong inability to properly digest gluten -- a gluey protein found in wheat and barley and a few other grains. This was once thought to be an extremely rare condition, but recent studies have shown that it's quite common -- but many of those affected don't (yet) know it. And left untreated, it can cause all sorts of nasty health problems.
At the moment, there's only one treatment: Don't eat gluten. No bread, no cookies, no oatmeal, no cereal, no soy sauce, no beer, no to all sorts of things that you probably enjoy every day without realizing that there are gluten molecules floating around in them. Things that I enjoyed, too, until recently. Though right now, after a few weeks on this diet, I'm enjoying something else -- the best health I've had in my adult life, by a long shot. It really is amazing.
But I digress -- this is, after all, an article about Starbucks.
What does Starbucks have to do with this?
Earlier this year, responding to the increasing number of people who are being diagnosed with this thing, Starbucks introduced a tasty gluten-free treat -- the Valencia orange cake. It was magical -- and the celiac community reacted with delight. Why magical? Because it had just a short list of natural ingredients, it wasn't overly expensive, and -- unlike most gluten-free pastries, which tend to taste somewhat like pastry-flavored sawdust -- it was delicious. It had the texture of actual cake. As we celiacs say, it was something we would have eaten anyway. What a treat!
But now I can't get it. Apparently it has a short shelf life, and although it supposedly freezes well, most Starbucks stores don't have freezers, which meant a lot of dumped inventory and not a lot of profit.
But this is much bigger than my missing a little cake I didn't really need to be eating anyway. I think this gluten-free thing is on the verge of becoming really big business. And it looks to me as if Starbucks is jumping off a new trend just as it's picking up steam, and that seems like a really bad move.
Why "gluten-free" is about to become big business
As I mentioned, celiac disease was long thought to be very rare, but research done in the past few years has determined that more than 2 million Americans have it. It can be the root cause of many disorders, ranging from various autoimmune diseases and gastrointestinal cancers to depression and, recent case studies suggest, autism.
Many more folks may have some level of allergy or sensitivity to gluten. Most don't even know it. But there are some new, inexpensive tests available, and awareness is spreading quickly, so many will be finding out in coming years.
Do you sense a huge business opportunity there? A lot of big companies do. Until relatively recently, gluten-free food was the province of a few small companies that were cross-marketing to other markets -- natural foodies and those allergic to things like soy and eggs. For a while, it was hard to find outside upscale grocery stores like Whole Foods (Nasdaq: WFMI ) , expensive, and for the most part, not very tasty.
But now, some heavy hitters are jumping in. General Mills (NYSE: GIS ) recently launched gluten-free Betty Crocker cake and brownie mixes, and modified the recipes for Corn Chex and Rice Chex to eliminate gluten. Restaurant chains like P.F. Chang's (Nasdaq: PFCB ) and Brinker International's (NYSE: EAT ) Chili's have developed gluten-free menus. Anheuser-Busch recently launched a gluten-free beer: Redbridge (it's not bad).
On the other side of the equation, Shire (Nasdaq: SHPGY ) and GlaxoSmithKline (NYSE: GSK ) are funding efforts to develop medications that can mitigate the dangers of gluten or stop the harmful reaction altogether. The first of those meds could hit the market in a year or two.
All of those companies -- and many others -- are in a great position to profit from the coming explosion of interest in gluten-free and therapeutic options.
But apparently, not Starbucks.
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