|University||Trinity College Dublin (TCD)|
ASPIRE FOOD GROUP: MARKETING A CRICKET PROTEIN BRAND
Mohammed Ashour, chief executive officer (CEO) and co-founder of Aspire Food Group (Aspire), was in Boston to attend the 2017 Forbes 30 Under 30 event and had a half-hour coffee meeting with a colleague on his calendar. He was meeting with Greg Sewitz, co-CEO, and co-founder of the protein bar company Exo, who had also made the Forbes list in 2016.
Aspire and Exo were in the same small but growing sector of the food industry: edible insects. Still, in its infancy in North America, the edible insect market involved players who were open and willing to share information. Because the idea of insects as food was not the easiest concept to sell to Western palates, those in the business knew that the category as a whole needed promotion and acceptance in order for their companies to succeed.
THE MARKET FOR INSECT PROTEIN
The global insect protein market was forecast to grow about 28 percent per year and to achieve estimated sales of $213 million by 2023 and $8 billion by 2030.2 The United Nations and other organizations were promoting entomophagy (eating insects) as a sustainable alternative to consuming traditional livestock protein and a way to feed the world’s growing population.
Among societal issues surrounding sustainability, food security posed a significant challenge as the world confronts the growing global population, inefficiencies in food production and consumption, and the influences of climate change. The consumption of edible insects offered one solution by providing a high-protein, nutritional, and safe food source with a low environmental impact. Insect protein had the advantages of aligning with consumer values that favored clean ingredients and minimal processing.
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Aspire Food Group and the Aketta Brand
In 2012, Ashour conceived the idea behind Aspire Food Group after learning of the Hult Prize, which challenged master of business administration (MBA) students “to solve the world’s toughest issues by empowering them to make money, do good and make life better for millions of people through the creation of for-good for-profit businesses.
”9 The focus of that year’s prize was food insecurity, and a conversation with a friend on the subject of edible insects prompted Ashour to work with Mott and three other McGill MBA students to compete. Along the way, they incorporated a company and traveled to Thailand for field research. The team won the $1 million Hult Prize on September 23, 2013.
The Exo Brand
With the Exo opportunity, Aspire decided that its Aketta products would be rebranded using the Exo name, and the Aketta name would be used for educational purposes. Exo’s cricket protein bars were targeted at athletes, and its marketing reflected that positioning (see Exhibit 3). Ashour added, “Exo’s target audience is predominantly a US, millennial, CrossFit, and Paleo audience.
What matters to this group is that they know their product includes clean ingredients, it is ethically sourced, and there is a very transparent supply chain. But the key benefit is ‘clean ingredients.’” Exo sold its bars primarily through e-commerce channels and through its website, and it dedicated marketing resources to maintaining a social media presence.
The US snack, nutrition, and performance bar market was worth $7.0 billion in 2018 and is forecast to grow to $7.7 billion by 2023.10 The average performance protein bar had a retail cost of $3.00. With retail margins at about 35 percent, Exo’s wholesale revenues per bar were $1.95. Exo’s cost of goods sold was about half of the wholesale selling price.
Competition in the insect protein food sector came primarily from entrepreneurs in two categories: wholesale farmers and brand manufacturers. Millennial-driven start-ups such as Aspire and Exo; family farms, including Entomo Farms in Canada; and venture capitalists had jumped on the opportunity to be involved in this nascent market.
Aspire had the advantage of vertical integration. Most other entrepreneurial food companies were reliant on insect protein suppliers, such as Aspire, Entomo Farms, or numerous overseas operations. Ingredient sourcing had been an issue for smaller brands, creating inconsistency with supply and various quality concerns.
Attitudes, Motivations, and Behaviours
Consumer attitudes and preferences in the insect market were tricky to assess, as Ashour pointed out:
The challenge is our industry, first of all, consists of a lot of first-time entrepreneurs: not just food entrepreneurs, but just entrepreneurs, period. You’re talking about people who are learning and having to come up with a food product and how to incorporate the new, novel ingredient into a new food product and then how to market that new food product with the novel ingredient to a new market.
That’s a lot of layers of challenges to ask of any seasoned entrepreneur, much less of a first-time entrepreneur.
So, there were clear gaps. There was an experience gap and a product-development gap as well as the consumer-product-market-fit gap that we saw. For example, you have companies that are making chips using cricket protein. Is there a lot of data indicating that chips are a robust protein delivery system?
Because if people aren’t buying into this concept, how can we really conclude that they are not interested in crickets? Maybe they just don’t want chips, and it is the fact that you are using protein in chips that is the wrong decision, not the crickets themselves.
Research on motivations and attitudes revealed that 67 percent of consumers in the United States were driven by flavor when choosing their snacks, followed by 33 percent who were driven by the lowest price, 30 percent were driven by calories, 27 percent by brand, 27 percent by natural ingredients, and 26 percent by protein content. A total of 66 percent of consumers wished for more healthy snack options, and 52 percent also believed taste was more important than health when eating snacks.
Research showed that the snack bar market within the United States continued to be strong, with more than two-thirds of adults reporting that they ate bars. The most popular type of bars was snack bars, which had a 48 percent penetration, followed by nutrition bars (40 percent) and performance bars (11 percent). The majority of bar eaters were under the age of 45, and both men and women were equally likely to eat bars.13 However, men made up a significantly larger share of performance bar eaters.
In considering which segments the company should go after, Ashour noted that the current Exo target was the sports individual who valued performance and nutrition, above all else. He added, “This is the endurance, CrossFit, weight lifting, weekend warrior crowd. They are willing to pay a significant premium to get an edge in their competition or in their lifestyle. There isn’t an X-factor for this group because fundamentally they are functional eaters. They’re not gourmet eaters.”
MAKING A DECISION
The Aspire team wondered which consumers to pursue. They wanted to take the next few days to analyze the segments and finalize their marketing plan. Ashour summarized their task:
Our challenge, obviously, is, how do we create a brand identity that suits all of these demographics? Well, the truth is, we can’t. Exo stylistically seems to fit the first, second, and maybe third group, but it is not really a kid-friendly looking brand. So there have been questions about, how do we reach these targets? Do we have a sub-brand that focuses on kids? Do we take a different approach?
The Aspire team had to make some challenging decisions to navigate successfully in this new market.
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