In technical applications of composites, there exists a need to analyze composite strength in terms of stress gradients such as cracks, cutouts, and concentrated loads. Traditional continuum stress analysis cannot fully reconcile the interaction of the stress gradient and the local heteroeneity of fiber matrix and lamination. We present an adaptation of the statistical strength theory to analyze the effect of stress gradients by explicit relation to the intrinsic strength variability of the composite. This method is suitable for failure analysis of composites under a general state of stress without employing an arbitrary averaging parameter