AR05 Pricing Model for a Novel Protein Ingredient

Background

An innovative biotechnology company and leader in ingredients for nutraceutical, aquaculture and animal feed applications had developed a novel protein ingredient with a good organoleptic profile and advantages in specific applications. It had collected preliminary data on the potential market but wanted to develop a clearer understanding of the potential market. 

Objective

The objective of this project was to provide assistance to the client with assessing the formulation economics for its new ingredient.

Scope

The scope of the project was to develop an interactive spreadsheet model which would illustrate the value which can be obtained from the client’s novel protein ingredient in the following product types:

  • Powders
  • RTD shakes
  • Protein Drinks
  • Protein Bars

Method

CPL developed a model based on actual retail data (e.g. pricing of individual products), ingredient costing data and data from interviews. The model contained several thousand data points for the specific categories and geographies included. The model was a development of an existing proprietary pricing tool created by CPL. 

Deliverables

The spreadsheet model included a protein economics comparison tool for use by the sales team when pitching to customers. The model detailed substitution costs as well as a protein quality comparison with competing ingredients.

An interactive ingredient value model also calculated potential demand in powders, shakes, protein water and protein bars for specific markets at low and high proposed ingredient price points and estimated potential penetration of each retail category.  The model could be used to test acceptability of various price points for the ingredient. 

The information was used to inform the client’s business and marketing plans for the novel protein ingredient. 

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