Why Many Expect Nightfood to Be King of the Night Snack Category

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CEO Sean Folkson details sales and distribution, growth and the company’s secret weapon: hotel distribution

New York, New York–(Newsfile Corp. – November 2, 2021) – PCG Digital — Nightfood (OTCQB: NGTF) is pioneering a new snack category and the biggest companies in the world-including Pepsi, Unilever and Nestle-are already paying attention. Why? The next 12 to 18 months are expected to propel the multi-billion-dollar category opportunity that exists at the intersection of nutrition and sleep.

Recently, Nightfood CEO Sean Folkson presented at LD Micro to provide more insight into the company’s latest developments and upcoming catalysts.

More than 100 million snacks are consumed every night, totaling over 36 billion nighttime snacks a year. Unfortunately for most people, according to industry data, consumers make less-than-healthy choices when it comes to nighttime snacking. Interestingly, cravings for foods with extra calories, extra fat and extra sugar late in the day are part of our pre-wired human survival programming, according to the latest research.

Folkson explained, “Over 80 percent of us snack regularly at night, resulting in over a billion dollars spent every week on snacks just consumed between dinner and bed. The most popular night snacks are cookies, chips, candy and, of course, ice cream, and these are not only unhealthy but they can disrupt and impair sleep quality. That’s not a trend. That’s not a fad. It’s our human hardwired biological programming, and we know these cravings for calorie-dense foods and our appetite are both peaking at the same time while willpower is at its lowest.”

With $50 billion spent annually in the night snack category, Nightfood aims to become the category king. Folkson knows there will eventually be competition in the space, and welcomes it.

“Many investors ask what makes us think that one of the big guys won’t step up and crush us, and that’s just not the way it works in consumer goods. The big guys don’t rush into categories. Dannon wasn’t able to crush Chobani. Red Bull, Monster, Coke and everybody else weren’t able to crush 5-hour Energy,” he said. “Big CPG has moved into an acquisition model rather than a competition model. That’s why Kellogg’s spent $600 million to acquire RX Bar even though they already owned Special K, Nutri Grain and Kashi brands. It’s why Hormel paid $300 million for Justin’s Nut Butter even though they had just acquired Skippy a couple of years earlier. And it’s why Unilever attempted to acquire Halo Top for a reported $2 billion even though Unilever already owned Ben & Jerry’s, Breyers, Talenti and more, and why Wells, the second largest ice cream manufacturer in the United States that already owned Blue Bunny, actually did go through with the Halo Top acquisition.”

Nightfood ice cream doesn’t contain drugs or sleep medications and is formulated to be lower in fat, sugar and calories, but higher in tryptophan, casein protein and prebiotic fiber as well as calcium, magnesium, and Vitamin B6 to assist with digestion, blood sugar and production of serotonin and melatonin.

“It is important to remember, however, Nightfood is not simply an ice cream company. Its goal is to be able to offer people a variety of sleep-friendly versions of snack formats including cookies, chip and candy,” Folkson noted

The company’s secret weapon? Nightfood is rolling into hotels.

The next catalyst for Nightfood is expected to be announced in the coming weeks. The company completed a successful test with one of the leading global hotel players and they’ve confirmed Nightfood will launch nationally into the lobby shops of a major hotel chain, with the timing and the logistics being finalized.

“An estimated 20,000 hotels across the country sell ice cream in their lobby shops. The reason we can expect hotels to roll Nightfood out aggressively is because hotels have an obligation to their guests to support and promote better sleep quality. Supermarkets don’t have that; hotels do. They’ve invested billions to support better sleep. They’ve upgraded bedding in their rooms and pillows and blackout shades and white noise machines. And now they can also support better sleep nutritionally,” Folkson said.

Nightfood’s goal is to be in over 7,500 hotel locations by next summer, which would clearly result in significant revenue growth and projected profit.

But there’s more: “Compared to the supermarket vertical, the hotel business is higher margin with less competition. There are a lot of expenses at supermarkets that we don’t have in hotels, such as slotting fees, consumer promotions and advertising. And there’s so much less competition, we can sell as many pints in an individual hotel location as we would in an individual supermarket location. We also believe widespread hotel distribution will provide important signals to consumers helping advance the category in communicating the key point behind our brand, which is what you eat before bed matters,” he noted. “We believe it will also serve as a de facto endorsement of the Nightfood brand by these leading global hotels in the eyes of the consumer. Hotel placement can be expected to drive valuation through ownership and dominance in this curated vertical.”

The average American now snacks nearly three times a day and 46 percent of North Americans have reported that their sleep quality has declined in the past years. With the additional stresses of the pandemic, growth in the night snack category seems to be inevitable. Likewise, consumers are more aware of the importance of sleep and how sleep impacts things like weight management, energy levels, physical appearance and overall health, and they are seeking more functionality from snacks. “It’s not enough to taste good. It’s not enough to satisfy hunger. They’re looking for things that deliver additional levels of functionality,” said Folkson.

Folkson reminds investors, “If you think back to the first time you ever heard of Greek yogurt or coconut water or kombucha or plant-based meat, think back and now they’re everywhere. And it happens just like that, seemingly overnight. We believe that 2022 will be the year for the night snack category.”

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