Saturday, 30 November 2013

Market Analysis - Meso level: The closest substitute

Next we want to take a look at the most potential future competitor - Soylent

Soylent is the closest substitute for Ambro – and also behind the idea of Ambro itself. Soylent provides a full food substitute, just like our case company – but differs from Ambro in such a way that it is not organic. Otherwise the idea is quite similar: one mixes the powder with water (or other liquids) and the drink (meal substitute) is ready. However, unlike Ambro, Soylent advertises that one could give up all food if only using Soylent. On their website, it is even said: “What if you never had to worry about food again?” Ambro’s founders are making a clear distinction in this by stating that they do not intend people to live solely on Ambro (even though it is nutritionally possible) – they value the social atmosphere of eating too much.

Soylent is actually quite a new product as well. At the moment a customer needs to wait for over a month for the mailing (“order now and receive early 2014”). Also, the product is only available in the US and intends to go international in mid-2014. The company has been successful in collecting capital; they currently have raised over $3 million through crowdfunding and private investors.1

Positive aspects of Soylent are 
  • Relatively cheap price; “a week’s worth” (21 meals) package costs $65, making one meal cost $3.10. 2
  • Full feeling afterwords 3
  • Noble side-idea: Soylent has also been praised for tackling environmental problems by providing a solution to the global food crisis. It is nutritional, inexpensive and can easily be transported to countries with food shortages. However, $3.10 for a meal isn’t particularly cheap in the poor countries. 3

Negative aspects of Soylent 
  • Contains lots of chemicals (oat flour, maltodextrin, rice protein, canola oil, potassium gluconate, sodium, iron, zinc, chloride) 3
  • Taste raises mostly negative reactions (“tastes like medicine”) – however some like it 3
  • Bad smell 3

In an experiment, Soylent was used for 30 days in a row without eating anything else in addition. In that project, also other negative aspects were brought up. First, the test user’s jaw started aching because of not having used the muscles. Second, the test user experienced depressed feelings. Food often serves other purposes than its core as well, and one of the most important is the social side of eating; the test user found it hard to join friends who met for eating. Third, the test use actually lost weight during the experiment so that a doctor recommended no exercising during the diet. Losing weight would of course be good for obesity problems, but there are also a lot of people who should not lose any weight.3

Soylent is marketed as the food of future – replacing the need to cook. However, the experiment shows – which can be backed up also by most people – that food serves a social purpose which should not be totally abandoned. Therefore, if Soylent would position itself more similarly to Ambro – being a substitute for busy times instead of a full-time diet – it could provide a great threat of substitute or even a direct competitor, should it decide to enter the organic market. Still, one question prevails:

Would Soylent really enter the organic market?

Their core product is quite different; if made organic, the product would become more expensive as well, losing the image of inexpensive meal substitute that could even help the hunger. The core difference is summarized quite well in the article on Wired: "Soylent's goal is to be synthetic and affordable," "Ambro is organic and premium". We believe Ambro should definitely keep on following Soylent, but at the moment the product does not offer a direct competitor. However, such as Ambro followed Soylent, it is likely that new competitors will come. 







Sources: 
  1. Soylent Funding Announcement http://blog.soylent.me/post/64789154918/soylent-funding-announcement
  2. Soylent Website https://campaign.soylent.me/soylent-free-your-body
  3. Blackmore, W. 2013. The Soylent Experiment: Living off "Liquid Goop" for 30 Days. Takepart [online]13 November. Available at: http://www.takepart.com/article/2013/11/13/soylent-experiment-living-liquid-goop-30-days
  4. Kelly, G. 2013. Premium Soylent rival fuels the drink revolution. Wired [online] 14 November. Available at: http://www.wired.co.uk/news/archive/2013-11/14/commercial-soylent-variant 

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