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Against the grain: Gluten-free products are growing in popularity and that's good news for these businesses

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From left, Susan Hougui and Steven Leyva, co-founders, GeeFree, and Billy Procida, president, Procida Funding & Advisors.
From left, Susan Hougui and Steven Leyva, co-founders, GeeFree, and Billy Procida, president, Procida Funding & Advisors. - ()

Billy Procida was considering making a $1 million investment. He had his eye on a young company with quick and convenient product lines and segment exclusivity in a growing multibillion-dollar global industry. So, he called one of his biggest investors.

“I asked him what he thought, and he sent me a picture of his freezer at home,” Procida, founder and president of Procida Funding & Advisors in Englewood Cliffs, said. “It was stocked full with GeeFree frozen foods.

“He said, if his wife and kids were eating it, he’d invest in it.”

GeeFree, a fast-growing manufacturer of all-natural, frozen, gluten-free puff pastry foods, was co-founded in 2013 by Susan Hougui, a food consultant and bakery owner, and Steven Leyva, owner of multiple SugarFlake Bakery locations in Bergen County and a master baker with more than 30 years’ experience.

“I had stayed with a gluten-free family in Israel who made bourekas with this amazing pastry dough,” Hougui said.

“She came to me with the idea to reverse engineer the ingredients, improve upon it and figure out how to make it flakier and all-natural,” Leyva said.

Maria Carlino, manager of La Riviera Trattoria in Clifton, and her father, Franco Carlino, the owner and executive chef, worked to get the restaurant certified as gluten-free.
Maria Carlino, manager of La Riviera Trattoria in Clifton, and her father, Franco Carlino, the owner and executive chef, worked to get the restaurant certified as gluten-free.

As a two-person startup, Hougui and Leyva decided to team up with a manufacturer and co-packer in Northvale — even though it was not a gluten-free facility.

“We certified the facility by producing in a separate room on a separate day while testing for traces of gluten before, during and after production runs,” Hougui said.

The results?

The facility continuously tests well below three parts per million when the legal USDA limit is 20 parts per million.

GeeFree is the only known creator of its signature, gluten-free, all-natural, puff pastry dough.

Its products, ranging from spanakopita to franks in a blanket, are currently available in more than 500 retailers in New Jersey, New York and Pennsylvania.

And in less than four years, GeeFree already is nearly a $1.5 million company.

“You can’t get any better than where we are right now, having been in business only a few years,” Leyva said.

Welcome to the gluten-free industry, where the stakes are high and the rewards are great.

•••

Gluten is a protein found naturally in grains including wheat, barley and rye that make bread products — such as baked goods, bagels, pastas and pizzas — rich with chewy texture.  

However, those with celiac disease, a genetic autoimmune disease, cannot properly digest gluten.

While just 1 percent of the U.S. population has celiac disease, more and more people are simply choosing not to eat gluten for various perceived health benefits.

According to the Journal of the American Medical Association, the percentage of Americans practicing a gluten-free diet more than tripled between 2009 and 2014, even though the percentage of Americans diagnosed with celiac disease remained stable.

It’s often a lot for people to wrap their head around, Natalie Colledge, owner, executive chef and baker of Plum on Park and Plum Bakery in Montclair, said.

Manufacturing requirements
Lou Cooperhouse, executive director of the Rutgers Food Innovation Center, said a lot has changed since he co-founded MenuDirect, a company in the 1990s that, among other things, focused on the gluten-free foods category.
“Twenty years ago, you wouldn’t be able to find gluten-free products very easily,” he said. “Now, there are entire gluten-free sections in both the pantry and frozen aisles of
“And, once, gluten-free foods were primarily for those with celiac disease and an intolerance to wheat gluten; now, the market has expanded to include audiences who simply want to make a lifestyle choice.”
It also is not as difficult as it may seem to tap into this market, he added.
“You do not need to make gluten-free products in a gluten-free facility as long as one can demonstrate via testing that the product does not contain more than 20 parts per million, according to FDA standards,” Cooperhouse said. “The best practice then is to make gluten-free items at the beginning of the day after your production line has been heavily sanitized at night.”

“People are sometimes offended that they can’t come into our bakery with their Dunkin Donuts coffee cup, but we are strictly, entirely, gluten-free,” Colledge said. “People will see a bakery and walk in without understanding what that truly means.

“Then, when we explain it to them, sometimes they say things along the lines of, ‘So you’re jumping on the Dr. Oz bandwagon, then?’ ”

For Colledge, her leap into the gluten-free baking industry was not simply a trendy choice — it was a necessity.

After opening her eclectic American restaurant Plum on Park in 2010, Colledge found she was consistently running low on homemade gluten-free products.

“I’d make six loaves of gluten-free bread for use in the restaurant, for example, and people would come in and purchase four of them at a time,” she said. “I was working an additional five hours a day simply baking gluten-free items to keep up with the demand.”

Colledge therefore opened Plum Bakery in 2015 to exclusively serve gluten-free treats, ranging from $2 chocolate chip cookies to $150 specialty birthday cakes.

While 60 percent of her customers at the bakery follow gluten-free diets, she said, her gluten-free-friendly restaurant is another story.

“Even though most of the items at Plum on Park are naturally gluten-free — with the exception of multigrain bread and burger buns — we do not certify or market our restaurant as gluten-free,” Colledge said. “I don’t want that liability.

“I also feel like we might lose customers if we were to emphasize that aspect, as some people still have the perception that gluten-free does not taste as good — even though every dish that they currently love at Plum on Park is inherently gluten-free.”

Colledge also has had to weigh the pros and cons of the increased costs of gluten-free ingredients, which, she said, often can be three times more expensive.

“For instance, if I were to make the same thing that Udi’s is selling for $1.50, I can’t necessarily sell mine for $5 even though that’s what the cost is,” Colledge said. “My bagels, for example, are basically a loss leader. Each one is hand shaped, boiled, baked and hand rolled in seeds, but that is the thing that makes people come in and say, ‘I cannot get this bagel anywhere else.’

“While $3 may sound like a lot for a bagel, I’m basically breaking even on that to get them in the door and trying other things.”

•••

Maria Carlino, manager of La Riviera Trattoria in Clifton, said she was determined to take on both the increased costs and the massive responsibility of becoming a certified gluten-free Italian restaurant after she was diagnosed with celiac disease in 2009.

“I would estimate that 95 percent of the people that come here for gluten-free items have an autoimmune disease, an allergic reaction or an intolerance,” she said.

La Riviera Trattoria has been known for its Old World Italian home-style cooking for more than 37 years. And Carlino worked with her father, Franco Carlino, the owner and executive chef, to get the traditional 75-seat restaurant certified before creating a separate and expansive gluten-free menu, complete with everything from stuffed breaded artichokes to penne Bolognese.

“We are meticulous about avoiding cross-contamination with our gluten-free foods,” Maria Carlino said. “We use separate grills, pots, pans and strainers, and our gluten-free utensils are specifically marked in red.

“I also train our kitchen and serving staff in the special handling methods and best gluten-free practices required, in four different languages.” 

Plum jelly doughnut, glazed doughnut and cinnamon roll at Plum Bakery in Montclair. Plum is a gluten-free bakery.
Plum jelly doughnut, glazed doughnut and cinnamon roll at Plum Bakery in Montclair. Plum is a gluten-free bakery. - ()

As for the money, Carlino said, the return on investment has been worth it.

“We saw a spike in costs in the beginning because the ingredients cost more money, but, now, those costs have nearly leveled out, and I have nearly 2,000 more regular customers that come here because of our gluten-free menu,” she said.

As consumers become more educated and open to the idea that gluten-free diets are a necessary lifestyle change for many, Colledge said that presents more opportunity for expansion.

“Educated customers are my best customers,” she said. “They want to know where their food comes from, how it is made, what the ingredients are, and they are learning themselves about what the potential benefits of eating gluten-free are.”

Colledge said she would therefore consider opening another location in a similar market, such as Summit or Ridgewood, as she continues to renovate her Montclair restaurant.

As for GeeFree, Michael Getoff, chief operating officer, said he predicts it will be a $25 million company in less than five years. 

“GeeFree products will be in supermarkets in at least 20 states within the year,” he said.

That is partly due to the $1 million capital infusion from, and partnership with, Procida Funding & Advisors in March, dedicated almost entirely to marketing, advertising and e-commerce capabilities.

“This will be one of the few times, if not the first time, that a gluten-free company has advertised on national television,” Getoff said.

Hougui also envisions nothing but an upward trajectory for the market.

“As people decide to eat healthier, and the next generation grows up with hopefully better diets, gluten-free will also continue to grow,” she said. “It is not a fad that is going to go away.”

Gluten-free health trend
According to multiple reports, the choice to “go gluten-free” has largely been championed by millennials and women looking for healthier food options.
However, gluten-free does not always mean healthier, Michael Getoff, chief operating officer of GeeFree, said.
“Even if you are gluten-free, it doesn’t mean you can stop being health conscious,” he said. “You still need to read labels — see what the sugar content is, and so forth. It’s not a stamp of approval to eat as much of something as you want.”
Gluten-free foods often contain more sugar and corn byproducts than normal.
“We do not use corn, because, while it is indeed gluten-free, corn ranks very high on the glycemic index, which can help cause diabetes,” Getoff said."
However, if managed correctly, gluten-free diets can help contribute to healthier diets, Lou Cooperhouse, executive director of the Rutgers Food Innovation Center, said.
“Consumers perceive it to be healthier, cleaner, more minimally processed and more transparent,” he said. “Gluten-free is riding the wave with all of these other claims and benefits that people are now looking for from the foods that they eat.”
Perceived — and often real — benefits from a gluten-free diet include factors such as weight loss, reduced gastrointestinal distress, healthier skin, increased energy and reduced headaches.

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