Has Nightfood Found a Brilliant Growth Strategy? The California Milk Advisory Board Thinks So

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.

Snacking at night is a guilty habit the vast majority of Americans can relate to. When the end of the day rolls around, humans are evolutionarily predisposed to crave higher-calorie foods. You can thank your hunter-gatherer ancestors for that. Many people reach for a tub of ice cream, a stack of cookies, or a bag of chips before hitting the sack.

The problem is that eating the wrong thing before bed can impair and disrupt sleep quality, leaving you unproductive and groggy the next day.

Nightfood Holdings Inc NGTF wants to help. The company creates snacks formulated for better nighttime snacking by supporting better sleep, allowing you to have your cake and eat it too, so to speak.

Recently, the company was awarded 1st prize at the 2021 Real California Milk Excelerator Program, securing the $150,000 top prize. The competition is organized by the California Milk Advisory Board (CMAB) and highlights  innovation in dairy products that use California milk. The judges are looking for companies they believe can achieve significant scale, increasing the demand for California milk products. 

The judges included Russell Barnett, managing director and chief marketing officer of My/Mochi Ice Cream; Heather Boyd, managing director of ready-to-drinks (RTDs) of Beam Suntory; Chad Coester, senior vice president of Own Brands at Albertsons Cos. Inc. ACI; Julia Bello, principal of Whole Foods Market’s local producer loan program; John Talbot, CEO of the California Milk Advisory Board; and Adriano Torres, senior director of global marketing, dairy and plant-based beverages at Coca-Cola Co. KO.

They were impressed with Nightfood’s innovative products, the size of the market being addressed (anybody snacking at night who would prefer better sleep), and the distribution and marketing strategy which Nightfood believes will lead to category dominance within nighttime snacking. The strategy is centered around having Nightfood sleep-friendly snacks in hotel lobby snack shops. The company has announced that one of the world’s largest hotel brands is scheduled to introduce Nightfood snacks into their lobby shops during Q1 of 2022, opening the door to national hotel expansion.

Hotel distribution would expose consumers to the brand in a context that seems to just fit. Many consumers and hospitality industry insiders believe hotels have an obligation to support  the best sleep possible, and hotels have already invested heavily in supporting better sleep  with amenities like blackout curtains and upgraded beds.

Customers have limited snack options in a hotel setting and are much more likely to try something new when in an unfamiliar environment. Limited space and selection in hotel shops, along with their first-mover advantage can create a moat around Nightfood if snack giants like Mondelez International Inc. MDLZ, Unilever N.V. UL, or PepsiCo, Inc. PEP  decided to enter the sleep-friendly snack space.

The judges agreed that this is a powerful move for the brand. “Targeting hotels as a channel is a brilliant strategy,” said Bob Carroll, vice president of business development for CMAB, creator of the competition. “Hotel distribution would deliver paid consumer trial for and awareness of the Nightfood brand, supporting the company in multiple ways beyond revenue growth.”

Nightfood hopes to be in 7,500 hotels by July 31, 2022, and believes they can have snack products in 20,000 hotels by the end of 2023 with a stated revenue target of $10 per hotel per day.

If you’re interested in learning more, check out Nightfood’s website here.

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.