May 26, 2011--Susan O'Brien, founder of a Dallas-based company that makes gluten-free snacks and desserts, led an impromptu tour through her 13,000-square-foot operation to a production room where the air was heavy with the scent of cinnamon.

A small clutch of hair-netted workers, including her former nanny, busily turned lemons and buckwheat groats into tarts and granola.

These days, roughly 90 percent of the raw, vegan and gluten-free treats produced by Hail Merry LLC end up in shopping baskets at grocers including Whole Foods and Central Market.

But that's changing.

Launched in 2006 in a poolside cabana at O'Brien's home, Hail Merry today is finding an increased appetite for gluten-free products among restaurant and hotel operators, including Subway and Irving-based Omni Hotels & Resorts.

"We believe restaurants are a vital part of the market; they influence early adoption," said Sarah Palisi Chapin, an investor who is also the chief executive of Hail Merry. "That helps us gain market share and makes it easier for restaurants and hotels to meet guests' needs."

Gluten is a protein found in grains such as wheat, rye and barley. For the estimated 250,000 Americans who've been diagnosed with an inherited autoimmune disorder called celiac disease, eating even small amounts of food with gluten damages part of the small intestine.

Beyond those diagnosed with the disorder, the California-based Celiac Disease Foundation estimates that up to 18 percent of the U.S. population, or more than 50 million Americans, is sensitive or intolerant to gluten.

Some consumers use a diet with no gluten or casein (most often found in milk) as part of autism therapy, though its effectiveness is still under debate.

Other consumers feel gluten-free foods are "generally healthier ... because they are subjected to rigorous manufacturing protocols," said Larry Finkel, research director at Packaged Facts, a research company.

"It's not just a few of us anymore," said Betty Barfield, president of the Gluten Intolerance Group of North Texas. "It's a very big part of the population."

And for restaurants and hotels, it represents a big opportunity.

Growing market

Americans bought an estimated $2.64 billion in gluten-free products from retailers last year, up from $935 million in 2006, according to Packaged Facts, which said retail sales could hit $5.5 billion by 2015.

Those figures do not include food service, which Finkel describes as "the final frontier."

"In the past couple of years, the food service industry has heeded the gluten-free call," he said, though he did not have an estimate for restaurant sales.

The growth in gluten-free entrees and desserts is expected to draw in consumers who'd been effectively banished from restaurant dining rooms.

In 1989, when Barfield was diagnosed with celiac disease, "there was almost nothing to eat," she said, and the gluten-free foods she found "tasted like sawdust. I could have used it for a doorstop."

Now she gets calls from restaurants seeking taste-testers for an array of dishes, including one of the most challenging to make -- gluten-free pasta.

Barfield said she recently dined at Olivas in Fort Worth on chicken cacciatore served on gluten-free pasta.

"It was wonderful," she said. "To be able to go to an Italian restaurant, to feel like a real person, is the tip of the iceberg."

Subway subscribes

By far the biggest restaurant chain to test gluten-free is Subway. In January, the nation's largest restaurant chain launched a test in 750 North Texas stores of gluten-free sandwich buns and brownies.

"For a person who has never been able to have a sandwich roll in Subway, the reaction is absolutely unbelievable," said Mark Christiano, Subway's worldwide baking specialist. "They can go in with their friends and they can all order sandwiches."

The baked goods are made for Subway by a certified gluten-free bakery in Minnesota, packaged and shipped to Texas. Subway workers are trained to use fresh gloves and a one-time-use knife to avoid cross contamination, Christiano said.

In July, Subway will expand the test to Portland.

Christiano said he'd like to see the baked goods available nationwide, "though I don't know if it will be in every single location.

"We're getting a lot of [franchisees] lining up to do the test," he said. "It's definitely going to be part of our future."

Steven Pidgley, vice president of food and beverage at the Gaylord Texan in Grapevine, also has celiac disease.

About a year ago he lobbied to have the resort's restaurants work toward "gluten-free food service accreditation" from the Gluten Intolerance Group of North America. That means the restaurants ensure there is no risk of cross contamination, a process that meant changing everything from cooking procedures to storage.

The gluten-free push has since expanded to all Gaylord properties, he said.

In the hotel's Italian restaurant, Zeppole, about 20 percent of the orders are for gluten-free products, up from 1 percent in November, when the restaurant opened, said Ty Thoren, executive resort chef.

Eight of Hail Merry's products are sold at the resort's 24-hour coffee shop.

In July, some of Hail Merry's snacks, such as granola and macaroons, will be available by request for members of Omni's guest loyalty program.

This year, at its Park West, Las Colinas and Fort Worth hotels, Omni launched a gluten-free section in its breakfast buffet, including English muffins and granola, and adding "toaster mittens" for bread.

"A lot of breakfastgoers are partaking in the products, whether they have these allergies or not," said Stephen Rosenstock, senior vice president of food and beverage at Omni.

Forty-five of the company's executive chefs will be trained this year in gluten-free cooking, he said. "We do take this very seriously."

Certified kitchens

Because of the rigid standards required for gluten-free kitchen certification, many eateries will look to buy products from companies such as Hail Merry, said O'Brien, the founder.

Attracting some of those restaurants as customers "is something that we are definitely going after," said O'Brien, who made about $80,000 in her first year.

For now, natural grocers account for 90 percent of the company's sales, which this year are estimated to be $3 million, Hail Merry executives said.

"It is our wish to add even more natural grocers," Palisi Chapin said. "Yet with the hotel rollouts in place and our attention on food service, especially at airports, colleges and offices, we forecast they will be 80 [percent] by year-end and 70 in two years."

With a full-time staff of 18, Hail Merry is tiny by food service standards. And the executive team is well aware that growing markets always attract the big boys.

If large producers "get into the market, they will be competitive," said Alison Brushaber, chief operating officer. "In some ways, it's great. There will be more products for people who want to eat this way, and the consumer will decide."

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