The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.
Will a consumer category develop where nutrition meets sleep? One microcap company is attempting to pioneer what it says could be the next great consumer category by developing ice cream pints and other snacks specifically formulated for nighttime consumption and sleep-support.
Nightfood Holdings Inc.’s NGTF sleep-friendly ice cream is available in divisions of Walmart Inc. WMT and Albertsons Companies Inc. ACI and is expected to be rolling into hotels nationwide soon through a partnership with an as-yet-unannounced international hotel chain.
An increased interest in nutrition for better sleep and mental performance has been seen in the industry recently, with food-and-beverage giant PepsiCo Inc. ((PEP) touching on the topic at the Future Food-Tech Summit in London. Pepsi Chief Medical Officer Dr. Antonio Tataranni addressed the topic, stating Pepsi researchers are currently examining how food and beverages affect neurochemical pathways.
“We are in our learning phase through that project and, if I can make a prediction, that will turn out to be a platform for us. We now recognize within our organization that sleep is an important aspect on which to concentrate if we want to be in this space of functional food and beverages,” said Dr. Tataranni.
Tataranni’s comments come on the heels of another related announcement earlier this year by Unilever PLC ((UL), which said it would conduct a year-long research study to evaluate how nutrition could affect better sleep through the gut-brain axis. In addition, the multinational food and beverage company Nestle S.A. NSRGY has stated its internal research indicates people want healthier snacks before bed.
In light of these comments and the growing conversation around nutrition and sleep, Benzinga conducted this exclusive Q&A with Nightfood CEO Sean Folkson.
You’ve been talking about sleep-friendly nutrition for years. What does it signal to you when you see companies like Unilever and Pepsi publicly announcing they’re exploring the use of nutrition to help people achieve better sleep?
It’s exciting. These are some of the largest and most influential food companies in the world — Nestle is another — that I believe are validating what I set out to pursue years ago. I think we’ve identified massive whitespace and opportunity, and I take it as a signal that the category is coming.
Why do you think these global companies haven’t yet launched products into the space?
We’re seeing a trend where the larger CPG (consumer packaged goods) companies don’t try to pioneer new categories. That’s not what they excel at. They can’t chase every lead. This leaves space for the startup universe to identify high-growth, high consumer-interest opportunities. After category validation, the big guys can enter through competition or acquisition and scale from there.
Are you concerned about a global conglomerate rushing in and stealing the category?
We’re not really concerned about that. Remember, consumer research firm Mintel, which bills itself as the world’s leading market intelligence agency, has been predicting this category for several years. Many experts in the industry seem to accept that it’s coming.
We’ve observed that companies of that size don’t typically move very early. The trend is to wait for consumer interest to be validated and then enter. Assuming we’re able to validate demand, I believe that would serve as the signal to the big players that the time for the category has now arrived, at which time we would expect a rush into the category.
This kind of wait-and-see approach would act as a buffer. If they’re not going to race in until after we prove viability, that would allow us time to strengthen our value and our position. I believe they’re less likely to attack until we’re much stronger, and that approach would help protect us.
What would you like investors to know about how you see the future of the category?
Remember, there’s over $50 billion annually spent on snacks consumed between dinner and bed, and most consumers would prefer better sleep. This can be the next billion-dollar consumer category. There’s also significant strategic value within the global snacking market. For many consumers, each time they consume a sleep-friendly or nighttime-specific snack, that’s one fewer conventional snack they’d consume.
Over 40% of all snacking happens at night, putting a significant chunk of the market share at risk for established players.
It’s not unusual for one brand to dominate a category. The big guys will have some important decisions to make if we prove to be correct. I think that’s why we’re seeing some of this current research activity from the big players.
We feel we’re well-positioned strategically. The widespread hotel distribution we’re expecting to establish between now and the spring can play an important role in accelerating consumer awareness and category acceptance while establishing Nightfood as the category king.
The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.
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