Soup-To-Nut Podcast: Building a new category requires a new playbook, NightFood founder says

24-Jan-2022 - Last updated on 24-Jan-2022 at 17:06 GMT

Source: NightFood

Related tags Soup-To-Nuts Podcast Ice cream

When it comes to building a new category, the founder of the better-for-you, late-night snacking company NightFood found after years of struggling to explain his value proposition to consumers that a new playbook was in order – one that focuses more on high-quality shopper engagement through channels with a more curated approach and less on high-traffic channels crowded with competitors.

When NightFood launched in 2010 with a mission to help nighttime snackers satisfy their cravings with healthier, sleep-friendly options, it took the same path to market as many food startups by securing distribution through traditional supermarkets. And while this is invaluable for its broad-reach and straight-forward consumer relationships, NightFood CEO Sean Folkson says a new partnership with a hotel chain in the often-overlooked hospitality industry is emerging as an unexpected, but much-needed key in driving consumer awareness, scaling the business and spearheading the creation of a healthy late-night snack subcategory.

In this episode of FoodNavigator-USA’s Soup-To-Nuts podcast, Folkson shares his vision for a sleep-friendly snack segment and what it takes to build a new category, including the impact – positive and negative – different channels and strategic partnerships bring to the table. As the recent winner of the Real California Milk Excelerator, he also shares how participating in the Shark Tank-esque competition helped crystalize his plans for growth and where he sees NightFood going. Finally, Folkson takes a step back to look at the macro-trends driving the frozen dessert space, and what he says about the future of plant-based in the segment may surprise many.

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An evolving dream

The idea for NightFood came to Folkson long before he launched the business, and – like many startups – the concept has taken many forms before settling on its current iteration, but the mission has always remained the same: to help people understand what they eat – especially before bed – can impact their sleep, and to help them make healthier choices.

“We’re not a sleep aid company, and we didn’t set out to solve the sleep problem. We set out to solve the night snack problem. And the way we do that is by giving people snacks that can satisfy those nighttime cravings in a better, healthier and more sleep-friendly way,” Folkson said.

With that in mind he formulates his products ingredients that encourage sleep and skips those that hinder it. For example, caffeine is obviously out, and given that an excessive amount of calories before bed can make it difficult to sleep, he also keeps energy in check. But he also adds helpful ingredients, like magnesium, calcium, zinc, some B vitamins and others.

The first product that NightFood created to check these nutritional boxes and meet its mission was a lower calorie nutrition bar with 5 grams of fiber, slow-digesting carbs that help keep snackers full and satisfied through the night and hefty dose of sleep-friendly calcium and magnesium as well as the branded cocoa-based ingredient Chacamine, which is touted for calming the mind.

Fast-forward to mid-2019 and NightFood had dropped the nutrition bar in favor of better-for-you pints of ice cream with low-lactose dairy that the company says is easier on the stomach and digestion, decaffeinated coffee beans (for its cold brew coffee flavor) and special cherry that is higher in naturally occurring melatonin in the cherry eclipse variety. The pints also have higher amounts of calcium and magnesium, which again, studies have linked to improve sleep quality.

While the pints have been the central focus for NightFood in recent years, Folkson stresses that his company isn’t a one-hit or one ingredient wonder. Rather, it is creating options across popular late-night snack categories, including an upcoming ice cream sandwich, and has plans to innovate around chips, candy and other popular options. In each case, Folkson said, different sleep-friendly ingredients will shine.

For each innovative product that NightFood brings to market, Folkson stresses the goal is not to coax more people to eat midnight snacks or to serve as a sleep aid, like many beverages and supplements on the market. Rather, he simply wants to provide better-for-you options that are easy replacements for the high-calorie products people already reach for late at night

A natural fit: Hotels and NightFood share a common goal

Finding the right formats and right ingredients to best help late-night snackers satisfy their cravings and still enjoy a good night’s rest is only one of many challenges that Folkson has tackled while at the helm of NightFood – another is educating consumers about what sets his products apart and building a new category, which as Folkson notes is a “tremendously heavy lift.”

But, he adds, he is hopeful that a new partnership with a hotel chain will shift this burden and help the nascent healthy late-night snack category take off first by restricting the competition so NightFood stands out, second by aligning the hotel’s and brand’s values of enhancing sleep to better communicate the company’s benefits, and third by driving brand recognition, which ultimately will drive traffic and sales across channels.

Folkson says that NightFood will be in 7,500 hotels by next summer and aims to be in 20,000 by the end of 2023 – a fast surge that he plans to support with his earnings from the Real California Milk Excelerator last fall.

Acknowledging that marketing in hotels and grocery stores are very different, Folkson is brainstorming ways to raise awareness for NightFood in hotels – including signs in the elevator or clings for the floor that direct people to the lobby market, or even sponsoring do not disturb doorhangers.

Dairy still dominates frozen desserts

Folkson’s participation in The Real California Milk Excelerator also solidified for him the marketing potential for NightFood’s ice cream beyond just late night snackers to the better-for-you ice cream category more generally, where he see significant opportunity – especially for dairy based options.

He explained that many industry leaders and retail buyers believe that plant-based frozen desserts currently are over-SKUed In stores and there will be soon a pullback and reduction of those brands – opening space for other innovative options in dairy.

Early candidates to fill those slots are better-for-you brands, like his, or others that use A2 milk for easier digestion or swap conventional sugar for lower-calorie options, he said.