Which Undervalued Food Companies Should be on Your Radar?

Take a look at Nightfood Holdings (OTCQB: NGTF)

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An article published by US News and World Report recently took a look at nine stocks with the high upside that investors should seriously consider.  Not surprising, food and beverage stocks were powerfully represented on the list.

The article, titled simply 9 Undervalued Stocks to Buy, identified these nine stocks:

— Stellantis NV (NYSE: STLA)
— Hanesbrands Inc. (NYSE: HBI)
— Delta Air Lines Inc. (NYSE: DAL)
— Anheuser-Busch InBev (NYSE: BUD)
— Compass Minerals International Inc. (NYSE: CMP)
— ConocoPhillips (NYSE: COP)
— Kellogg Co. (NYSE: K)
— Wells Fargo & Co. (NYSE: WFC)
— Kraft Heinz Co. (NASDAQ: KHC)

Another food company investors may want to look at is Nightfood (OTCQB: NGTF), the better-for-you night snack company addressing America’s $50B+ annual nighttime snack spend.  With over 100 million snacks consumed across the United States every night, Nightfood’s sleep-friendly line of snacks is solving an important and widespread consumer problem. 

NGTF is up significantly after opening the year at $.08 on January 1, 2021.

– Have you ever heard of “Sleep-Friendly” Snacks”? 

If you haven’t, you will soon.

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With revenues up more than 60% compared to last fiscal year-to-date, Nightfood has their sleep-friendly ice cream in almost 2,000 stores including major divisions of the largest supermarket chains in the country such as Kroger (NYSE: KR), H-E-B, Albertsons (NYSE: ACI).  

In addition, it was announced on April 20 that Nightfood had been introduced in over 1,000 Walmart (NYSE:WMT) stores from coast-to-coast.  That’s big news for an up and coming snack brand pioneering a new category.

Also, on March 3, the company announced that an unnamed global hotel brand has begun testing sales of Nightfood’s ice cream pints in their lobby shops for guests.  Management indicated that a successful test is expected to lead to rapid hotel rollout across the US into thousands of hotel properties.

Global food & beverage giant Unilever (NYSE: UL), the world’s largest ice cream company, announced in March 2021 that they are launching a year-long study to identify how sleep can be improved through diet and nutrition.  While Unilever and the other major food & beverage players are researching and exploring the concept of sleep-friendly nutrition, Nightfood is now establishing a national brand presence in leading supermarkets and hotels.

Over 85% of Americans snack regularly at night, and approximately 80% of consumers want better sleep.  Yet the most popular nighttime snack choices have long been cookies, chips, candy, and ice cream.  All of these are both unhealthy AND disruptive to sleep quality.

Over 200 million Americans combine to spend over a billion dollars a week on snacks consumed between dinner and bed, and experts project “sleep-friendly” nutrition to be a billion-dollar category in the making.

Launched in 2019, Nightfood is now available in over 1,800 stores.  The ice cream has been prominently featured on The Today Show, Rachael Ray, The Wall Street Journal, USA Today, Oprah Magazine, The Washington Post, The New York Times, Fox Business, and more.

Nightfood was recently endorsed as the Official Ice Cream of the American Pregnancy Association because of its healthier nutritional profile.  Ice cream is the first sleep-friendly snack format for Nightfood, but the company has stated they envision adding offerings in other popular nighttime snack formats, such as cookies, chips, and more.

Top executives from the world’s largest food and beverage companies including Kellogg’s (NYSE: K), Mondelez (NASDAQ: MDLZ), and Nestle (OTCMKTS: NSRGY) have publicly commented on the importance of nighttime snacking.  Doug Munk, director of new business ventures for Nestle USA recently stated “…people are looking to replace some of their junk foods before they go to sleep with something that is a little better.”

PepsiCo (NASDAQ: PEP) recently announced it was accelerating the launch of Driftwell, their new beverage designed to help consumers relax at night and get better sleep, now set to hit shelves in just a few weeks. Pepsi VP of innovation & capabilities Emily Silver stated, “We started this project before COVID, but especially now with all the stress, we’re juggling a lot of things and need sleep. “The concentration around sleep wellness or sleep hygiene has massively increased in the last few years.”

Nightfood CEO and founder Sean Folkson remarked publicly, “With over 200 million adults snacking regularly at night, Pepsi’s hard work and marketing dollars will complement our efforts and help bring the spotlight to Nightfood as the leader in the sleep-friendly nutrition category.  With Pepsi on the beverage side, and Nightfood on the snack side, their efforts can help drive our growth.”

Amid all the interest in night snacking from global food and beverage giants, Nightfood remains the leader in this nascent category that many believe has billion-dollar potential.  Dr. Oz stated in October, 2020, “The single most underappreciated problem in America, in fact, the world, is sleep.”

CEO Folkson, NGTF’s single-largest shareholder, is incentivized to grow the company and maximize shareholder value.  His current agreement with the company went into effect on January 1, 2021 and contains significant bonuses in the form of warrants with strike prices of $.50 and $1.  Trigger events include revenue targets as well as entry into strategic partnership with a multi-national food and beverage company during calendar 2021.

In addition to the national rollout in supermarkets and other mass retail, Folkson has previously identified the hotel market as representing a great opportunity for Nightfood’s sleep-friendly ice cream.  Ice cream is one of the top-selling items in hotel lobby shops. Before COVID disrupted the hotel industry, Nightfood had secured distribution in select Marriott (NYSE: MAR), Hilton (NYSE: HLT) and InterContinental (NYSE: IHT), properties.

On March 3, Nightfood announced a global hotel giant is testing Nightfood for national rollout in their hotel lobby shops.  Management believes this could rapidly lead to thousands of hotel points of distribution.  

And in April, the company raised growth capital and eliminated all convertible debt and fixed the balance sheet with a $4.5 million equity round.

NGTF is a company to keep an eye on.  

Category creators are often awarded a significant valuation premium in the consumer goods space, and the category Nightfood is pioneering shows major growth potential.  As distribution and gross sales increase, Nightfood can benefit from the consumer quest for better sleep as projected by Pepsi and other global snack players.   

With Americans combining to spend over $50 billion annually on nighttime snacks, and most consumers wanting better sleep, the Nightfood opportunity is not one to sleep on.

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