The Natural Foods Space is Ripe for Licensing
With hundreds of brands competing for shelf space, the natural foods category is ripe for licensing.
That much was clear at the Natural Products Expo West event last week. The show took place in Anaheim, California after a three-year hiatus and while a large portion of the exhibitors promoted their own brands, there also were signs that licensing is making in-roads that could lead to long-term business.
“In this [natural foods] space, many companies believe that everyone already knows their brands but that is not the case for all of them,” said a licensing executive who attended the show. “This is a space where there aren’t a lot of licensed products and we see that as an opportunity going forward as brands seek to distinguish themselves.”
For example, Pathwater—whose investors include chef Guy Fieri and San Francisco 49ers wide receiver Mohamed Sanu—launched licensed SpongeBob purified water with electrolytes packaged in a double-walled reusable aluminum bottle. Brownie Brittle, meanwhile, branched its low-calorie snacks into licensing with Hershey Co.’s Reese’s Pieces and Heath toffee brands.
GourmetNut introduced The Incredibles, Monsters Inc., and Toy Story-licensed versions of its Power Up Kids trail mix, combining sorghum crisps with gluten-free pretzels. These offerings followed GourmetNut’s Paw Patrol product, which launched last year. And Primary Colors Corp. previously bowed licensed “better for you” breakfast bites (free from artificial ingredients and flavors) with brands like Paw Patrol, Shimmer ‘N Shine and Mickey Mouse & Friends.
It seems that everyone wants a taste of the natural foods space. Global sales of natural and organic products, including food and beverage, supplements, personal care, and household products, are forecast to surpass $300 billion by 2023 and $400 billion by 2030.
Along those lines, and largely focused on their own brands, Loma Linda unveiled the first shelf-stable canned chicken alternative while Ozo Foods debuted zero cholesterol plant-based bacon. That’s in addition to Betterland showing what it claims is the first animal-free dairy milk in a product made with the whey protein found in milk combined with genetically engineered fungi developed by Perfect Day.
As if that wasn’t enough, Natural Products Expo West was rich with one of the surest signs of a growing industry: celebrity investors. Actress Vanessa Hudgens was promoting Caliwater, which is made from cactus water and has launched on Amazon, and actor Jason Momoa made an appearance to hype his CBD pain-relief oil.
With so many companies entering the natural food fray, Johnny Ream—whose Stray Dog Capital private equity firm has invested in plant-based meat suppliers Meta Burger and Beyond Meat as well as the pea-based “chicken” supplier Meatless Farm—earlier this year urged meat-free brands to do “something different” in order to stand out in an increasingly crowded field. Ream, for one, focused on product innovation but it’s clear that “something different” also leaves significant space for licensing.