Selenium, the major component of Sel-Plex, is an antioxidant mineral that Alltech has been proven to have extremely positive effects on the health of both animals and humans. What is so beneficial about selenium is that studies show an association between increased selenium levels and improvements in reproduction, growth and meat quality in animals. In humans, selenium has been associated with the prevention of cancer, heart disease, neurological diseases, and infections. In the past, selenium was brought into the food chain naturally as soil was abundant in the mineral. As animals grazed it was stored in their muscle tissue and then passed to humans. Overtime, soil has become selenium depleted. Alltech developed Sel-Plex to fill that nutritional need both in animals and in humans.
There are several strengths that Alltech can take advantage of should they decide to pursue the “human” market with Sel-Plex. Depending on the medium used to distribute Sel-Plex to humans, Alltech has relationships that they can take advantage of. For no additional cost, Alltech could decide to continue market Sel-Plex to producers as a feed supplement. Should Alltech decide to partner with animal producers, they could take advantage of their expertise in marketing (e.g. graphical design, press relationship, and education). Alltech could also distribute Sel-Plex directly to human consumers as a supplement in tablet form. This takes advantage of the fact that Alltech already has food-grade manufacturing facilities.
One major weakness that Alltech faces is their position in the feed industry. Should Alltech decide to move forward in introducing Sel-Plex to human consumers, they would no doubt be stepping on a customer’s toes somewhere along the way. If they choose to distribute Sel-Plex as a feed supplement, Alltech cannot force the producer to market the product as selenium enriched. If they choose to distribute Sel-Plex in food by partnering with a food producer, odds are they will partner with a customer that is a competitor of another Alltech customer. Should they decide to produce direct for human consumption Sel-Plex tablets, they would steal some of the allure of buying selenium enriched meats.
What makes Sel-Plex such a unique product opportunity for Alltech is that it is the only selenium supplement that is in the same for as is found in plants. Alltech has already invested a large amount of capital in getting Sel-Plex through the complicated review and approval processes of the FDA and the EU. This gives Alltech a level of protection from competitors, especially in Europe. Also, there are few selenium-enriched products in the United States. This is an opportunity because Americans are increasingly choosing foods for their health benefits.
An opportunity that also has elements of threat in it is the FDA approval. This is not a great form of protection, because it is not strain specific like the European approval. Any competitor can produce a selenium product using a different strain and compete directly with Alltech. Another opportunity that contains elements of threat is the reason why there are not more selenium enriched products in the United States. It was discovered that selenium was a toxic substance before the health benefits where known. This is a problem because it would take a tremendous amount of effort to reverse the understanding of the average consumer in the United States.
Upon reviewing Alltech’s strengths, weaknesses, opportunities, and threats I would recommend that Alltech pursue producing Sel-Plex tablets for human consumption. Of all the options, producing tablets has the greatest profit potential. The barriers to entry are not in production, but in marketing. As stated, Alltech already has food-grade production facilities and it would be very inexpensive to partner with a pharmaceutical company to produce the tablet.
The most difficult aspect of this approach would involve entering into unfamiliar distribution channels. Alltech is very good at educating is consumers, and has fantastic marketing people. It would not be very difficult for them to adapt their current model used to educate food producers toward educating health professionals. Also, I believe their marketing department could be put to good use in developing brand recognition.
