Soy Labs axes consumer lines, returns focus to trade

Soy-based research and innovation to be at core of company's corporate vision

Soy Labs plans to stop selling finished products to consumers in order to focus on researching and developing new soy ingredients and formulaic compounds. The company, based in California, will continue to sell its CORE-branded formula to manufacturers, but will cease production and marketing of the CardioTrim consumer-facing line of supplements.

"This change in our strategic direction will help streamline our operations for faster growth within the nutraceuticals, cosmeceuticals and functional-foods segments," said Soy Labs' president Ryan Schmidt. "By shifting focus to the supply side of the business, we will be able to concentrate on our core vision, which is to research new, innovative soy ingredients, compounds and extracts."

Julian Mellentin, director of London-based research, publishing and consulting company New Nutrition Business, said Soy Labs would have found that B2C and B2B marketing called for very different skills. "Companies that try to do both often end up with corporate schizophrenia. Selling successfully into the consumer market requires a huge commitment of capital and resources, and so too do researching and marketing new and innovative compounds. If you pursue both you set up a constant tension around where to allocate investment to get the best return."

Dr Lindsay Moore, CEO of KLM, a US management consultation firm that does strategic planning within many industries, commented upon Soy Labs' new trajectory, saying, "It isn't uncommon for companies to take stock of their core competencies and to align them more closely with their corporate mission. Bundling and unbundling corporate initiatives began in the early 1990s when companies broadly embraced the concept of strategic planning and reorganization for strategic advantage. In such cases, companies of all sizes often divest themselves of nonessential businesses or discontinue activities that distract from or undermine their ability to accomplish their deepest reasons for being in business."

In November of 2005, Soy Labs received a USDA grant for $150,000 to launch the CardioTrim brand, and in 2007, the journal Lipids in Health and Disease published peer-reviewed research showing the supplement reduced weight, body fat, cholesterol, triglycerides and fasting blood-glucose levels in study participants.

Soy Labs said it was also continuing work on developing Lunasin XP, a recently discovered bioactive soy component understood to be one of the key components responsible for soy's cholesterol-lowering properties. It should be available by the second quarter of this year.

"It seems that Soy Labs, to their credit, is refocusing upon its core purpose for being in business (soy-based research and innovation), and leaving commercialization and the retail channel of trade to companies that are in business of taking health and wellness products into the consumer marketplace," said Moore. "If they were a public company, I would imagine the shareholders would reward their efforts to enhance shareholder value by bidding their stock price up."

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