There are so many kinds of cereal in the supermarket, it’s hard to find the one you want.
There couldn’t possibly be any room on the dairy shelf for a new brand of Greek Yogurt.
There are at least five self-service frozen yogurt stores within a five-minute drive from my home; it would be stupid to open a sixth.
It would be completely reasonable not to create a new cereal, Greek Yogurt, or frozen yogurt store based on those fears. You’ll never succeed by producing something similar to what’s already out there. You certainly won’t be able to win a price war against established businesses.
On the other hand, if you’re fed up with what you are being offered, and you can make or do something better, the market will make room for you.
The market (for many things) is saturated, but it’s not saturated with quality.