Ambro's aim is to reach out to around 1-2% of the total available consumers. These market prospects are usually not enough to gain sustainable profitability. For example, in Finland, 1-2% of the population equals around 60 000 potential customers. Thus, Ambro needs to find a large enough market. Also, the market needs to be accessible as well as profitable.
US: Country of choice
According to Ambro's founders, their priority market choice for the launch of the product is the US. We decided to take a closer look at this potential market. Firstly, the market size is large enough; 1-2% of the American population (317 million) already equals 3000000-6000000 people - 63x the amount of potential Finnish consumers (US and World population clock). Also, there are multiple trends that would support the choice of the American market. These are:
- Soylent - the product behind the idea of Ambro - has reached a lot of attention in the US
- Healthy food substitute / supplement products are increasing their popularity in the US all the time
- Organic food consumption is increasing in the US; 81% of people purchase organic foods sometimes as the concern for chemicals in food is growing
- Organic food market is forecasted to grow at the CAGR 14% during 2013-2018
- Consumer distaste for artificial ingredients is growing in the US
- Americans are more likely to order food online
- Americans are more likely to be curious of new trends in the nutrition area
- Americans have an increased trend towards simple food solutions
- Americans are shying away from food containing gluten
- Americans have relatively high purchasing power (2012 index 149 compared to Euro area 108)
- Single language for a relatively large area
Thus, it can be derived that secondly, the US market is also profitable, since consumers have purchasing power and a need for an organic product can be identified. There are no similar products in the market, but similar kinds of products exists (we'll discuss the competitive environment in the later posts). Thirdly, the US market is accessible; there is the correct infrastructure for Ambro (internet purchasing for food), and consumers are open for such products (government regulations will be looked upon in the later posts).
Therefore, we agree with Ambro's founders that the US is the best market for them to enter at the time of their launch. However, the whole of US would not be a relevant market; the extremely busy people interested in healthy lifestyle often live in large cities, and thus Ambro should focus on them. The western states are the most prominent markets for organic foods, but on the other hand, Ambro is not only an organic food - but a fast meal substitute as well.
Therefore, we agree with Ambro's founders that the US is the best market for them to enter at the time of their launch. However, the whole of US would not be a relevant market; the extremely busy people interested in healthy lifestyle often live in large cities, and thus Ambro should focus on them. The western states are the most prominent markets for organic foods, but on the other hand, Ambro is not only an organic food - but a fast meal substitute as well.
Other possible markets?
Instead of being content with the US market right away, we wanted to take a look at other possible markets as well. Germany and Northern European countries could be considered as well. However, Germany pales in comparison to the pure quantity of inhabitants to the US. Southern Europe is out of question though; too high of a cultural hurdle exists in that area, as the dinner and rich food culture is too predominant. Food substitutes are not likely to succeed. A detailed analysis of the other international entry possibilities for Ambro will continue in one of our next posts. Also stay tuned for our plans for distributing Ambro through the major US cities. Besides that, we might shed some light on our secrets of getting funds. USA, Ambro is coming for you!To be continued!!
Consumer Trends: Online Grocery Shopping http://www.foodmanufacturing.com/news/2013/02/consumer-trends-online-grocery-shopping
Eurostat: GDP per capita in PPS: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=tec00114
Euromonitor: Meal Replacement in the US http://www.euromonitor.com/meal-replacement-in-the-us/report
Food Additives. The U.S. Market http://www.marketresearch.com/Packaged-Facts-v768/Food-Additives-7815259/
Gluten-free 2.0: Where is the gluten-free trend going next? http://www.foodnavigator-usa.com/Markets/Gluten-free-2.0-Where-is-the-gluten-free-trend-going-next
Key Consumer trends in the $28bn US supplement business http://www.nutraingredients-usa.com/Markets/Key-consumer-trends-in-the-28bn-US-supplement-business
US and World Population Clock: http://www.census.gov/popclock/
United States Organic Food Market Forecast & Opportunities, 2018 http://www.marketresearch.com/TechSci-Research-v3895/United-States-Organic-Food-Forecast-7900026/
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