Replacing 1g of protein with 1g of taurine/glycine saves you around .70 per 4-5lb tub. Ive seen spiking as high as 12g from testing products. We know due to eu labels some companies are doing 6-8g. I can say we make no money on protein, but margin is likely 15 points. Given the cash flow impact, thats whats meant by making no money. Eats up space and cash for a minimal margin. If someone is priced matched to me, but spiking, they are making 5-9 dollars more per unit. Thats massive. Ever notice companies do huge super sales on protein 1-2x per year? For simple math, lets say it cost 30 dollars to make a 72 serve/22g protein product (this is very accurate). By spiking, I can give away anywhere between 18-33% of my run and make the same margin as a legit company. The giveaway sales allow products to climb into the top sales of bb, impacting overall demand. Essentially, they have a free marketing budget because they can give away one out of ever 3-6 units they sell. This makes it impossible for me to compete because any marketing money is coming from profit, not from lying to consumers. This is why I can blow a gasket when people dont care about this issue. The comments often being about a product tasting good so who cares. When consumers know of deceit from a company and continue to support it, dont be pissed when there is lack of innovation from other companies. This is much harder to do in the bcaa market, which is why we have done well, its a fair playing field. Companies have adjusted to this by under dosing and then doubling the serving. A product will say its 30 servings, on front of label claim 10g of bcaas and in small print it says per 2 servings. Our industry is in a race to the bottom on all fronts. If consumers dont hold them accountable it will only get worse. Out industry is especially susceptible to this as most companies are not owned by business men. Its a guy that was working out that start a company with 10k out of his garage. It makes for a great story and a lot of unprofessional behavior along the way. The level of business ignorance in this industry is mind numbing. Thats why for an industry that turns so much money, there are so few transactions. As soon as the real business world looks at this space under a microscope, they run. - Mike McCandless
Posted on: Tue, 08 Jul 2014 15:04:24 +0000
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