Comment by confluence | Hacker News Reader

Comment by confluence | Hacker News Reader

The key thing that Soylent is going after is Ensure/Fortsip/Sustagen's margins. Full meal replacements are cost competitive with normal food at $5 a day. Medical suppliers currently charge a steep markup of $14 a day for their full meal replacements. At this price it is uneconomical for most people to adopt full meal replacements as a large part of their diets.

These margins must be destroyed. Soylent, and its competitors, are out to destroy them.

Full meal replacements will only hit critical mass if they cost less than the $7 a day an average American already spends on normal food, and if they are easier to prepare, eat and store. They need to taste nicer too.

The first part is the hardest bit. $6 a day is the current mean cost of full meal replacement production in small batch sizes. Large batch sizes and huge volumes can probably half this cost through economies of scale. Once we have at volume, non-regulated full meal replacements that cost $3 a day, with say a 20-50% gross margin, I expect the entire market to explode.

First one to market wins.

> These margins must be destroyed

Are those real margins, or are those the costs of sensible operation in a safety critical regulated marketplace?

> It is currently not economical for most people to adopt at the steep mark up of $14 a day that medical suppliers currently charge.

You Americans and your weird healthcare. Just checking - how do you work out that price of $14 per day? I don't doubt it, these things are expensive and something to make it cheaper is a good thing.

> Are those real margins, or are those the costs of sensible operation in a safety critical regulated marketplace?

For late stage cancer patients it sure might be the case that the margins are deserved. But for healthy adults this might not be the case.

It really isn't that hard to measure basic powders and mix them together, nor is it that expensive to QA one's methods. Cost per day should approach cost of production per day in competitive commodity markets. The fact that this is not the case is due to some kind of market distortion, whether that is unserviced market need, human diet biases, oligopoly dynamics or regulatory barriers.

> how do you work out that price of $14 per day?

People need 2,000 kcal per day. Ensure nutritionally complete powder's serving size is 250 calories. Hence you need 8 servings per day to hit 2,000 kcal. A 7 serving can costs $13.71 on Amazon, which is $1.958 per serving, or $15.66 for a full day's needs. If you buy in bulk with a 6 can pack, cost per can is $10.83, giving $1.547 per serving, or $12.377 per day.

Sources:

1 can; http://www.amazon.com/Ensure-Nutrition-Powder-Vanilla-Flavor...

6 can pack: http://www.amazon.com/Ensure-Complete-Balanced-Nutrition-Van...

Minor note: People need 2000 kcal a day, not 2 kcal. 1 kcal = 1 Calorie = 1000 calories.

I'm not sure where you're getting your numbers - but a four pack of Ensure Complete can be had for ~$9 or less. It's not the cheapest thing in the world, but I can comfortably drink three for breakfast, lunch, and midday snack and have a regular, home cooked dinner and still keep daily food intake cost below $15.

Normal at home prepared food is about half that cost.

Normal food at 5$ a day? Not sure which part of the world you live in, but if it's in North America/Europe I call b.s without evidence.

You can't run on Ensure/Fortsip/Sustagen's only without having consequences.

See here: http://www.cnpp.usda.gov/Publications/FoodPlans/2013/CostofF..., thanks to HN user fennecfoxen

Did you read the footnote?

Thrifty and low cost plan are not healthy meals whatsoever and it's highly optimized food consumption. Waste do exist. This report is disingenuous

Speaking as an Australian, I'm surprised that the average American spends as little as $7 per day on food. Do you know who compiled this statistic, and what a 'typical' $7 day's diet might look like?

I don't know who compiled that statistic, but I can show you the USDA statistics!

* http://www.cnpp.usda.gov/usdafoodcost-home.htm

* http://www.cnpp.usda.gov/USDAFoodPlansCostofFood.htm

Concurs with my calculations.

Cost of living varies greatly around the US. In Boston, $7 for a "good" lunch is pretty average, and can easily reach $10-12 if you aren't careful. If you shop anywhere except Whole Foods and cook everything yourself, $7 a day is a little more reasonable, if not limiting.

According to the Bureau of Labor Statistics (which tracks household expenditures), the average "consumer unit" in 2012 spent $6,599/year on food for 2.5 people, of which $3,921 on groceries, and $2,678 on eating out. That works out to to about $7.25/person/day, of which $4.30 groceries and $2.95 eating out.

Source: http://www.bls.gov/news.release/cesan.nr0.htm

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