Beyonce, Katy Perry and 7 other celebs join Oprah in food industry investments

Dalvin Brown | USA TODAY

Investing in liquor companies has been lucrative for a long list of celebs, but Oprah Winfrey's recent decision to back the rising True Food Kitchen restaurant chain reflects a slightly different A-list trend: Chomping into the food and dining businesses.

The media mogul said in a statement that she took a stake because she wanted to "be part of the company's future." She will serve as a collaborator and consultant to expand the health-oriented restaurant chain across the U.S., the company announced.

Winfrey joins a long list of household names, from Beyonce to Ashton Kutcher, who have put their money where their celebrity mouths are in recent years, backing everything from protein substitute companies to online grocery stores and “healthy” beverage manufacturers.

They follow in the footsteps of past Hollywood stars such as Paul Newman, the late actor whose pasta sauces and other products still grace supermarket shelves with profits going to charity, or country crooner Jimmy Dean, whose sausage brand outlives him.

Flush with income from their starring roles, celebrities invest in the food or restaurant trade to leverage their fame and hedge against upheaval in the entertainment business that is making their big salaries less dependable. Consider that U.S. box office revenue dropped 2.7 percent from 2016 to 2017 as fans continued to shun theaters and gravitate to streaming services at home such as Netflix.

Though U.S. music industry revenue has edged up slightly in recent years, total album sales have been on the decline since 2007. The drop is attributed mostly to the rise in streaming services, but apps such as YouTube, Apple Music and Spotify pay musicians as little as a penny per stream.

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"In the past, celebrities could make enough money by securing a movie or a record deal," said Jeetendr Sehdev, celebrity branding authority and author of "The Kim Kardashian Principle." "Now it’s harder to make money that way. So, they might seek back-end endorsements and investments in business."

Plus, they often score sweet deals from developers or business partners who know how celebrity cache will elevate their otherwise forgettable brands.

"It's very likely that these companies give better deals to celebrities," said Bruce Turkel, brand consultant and author of "All about Them: Grow Your Business by Focusing on Others."

In addition to perks, experts say some celebrities will invest in food to keep up with the "in" crowd.

"People tend to spend time with people who are like them. It's very likely that these celebrities hang out with other celebrities. They see what one another is doing, and they do it," Turkel said.

While it's common for people to fund companies they suspect will produce a return, there are other drivers that can motivate stars to invest, such as branding opportunities.

"It is critical for celebrities to invest in their brands," Sehdev said. "Whether it's Madonna and Vita CoCo or (Beyonce) and Jay Z going vegan, taking an equity stake allows them to come across as being authentic."

Others might hop on the food industry bandwagon to stay in-tune with today’s health-conscious consumers.

“Celebrities want to be part of a value system,” said Erich Joachimsthaler, founder of brand-building firm Vivaldi. "If health and wellness is important ... use it to connect with ordinary consumers and make a larger impact globally."

“Look at what Oprah did for Weight Watchers,” he said. “It’s success was enormous after she invested.”

Known as the "Oprah effect," the billionaire raised overall awareness of the weight loss company. The company's stock price doubled following the announcement that she had become an investor.

Turkel warns, "Just because a celebrity does it does not mean it's a good investment. Remember their area of expertise. Often, it’s probably not investing.”

Here's a sampling of celebrities who have recently invested in the food or beverage business:

Beyonce

The 36-year-old songstress invested in WTRMLN, a pressed juice company, in 2016. The company uses "discarded" watermelons that farmers would otherwise toss out because of blemishes to make some of its products. Other celebrity investors in the company include NBA players Chris Paul and Kevin Durant.

Bill Gates

The billionaire is an investor in the startup Beyond Meat, a plant-based food company. The protein alternative products can be found in the meat section of 10,000 retailers in the U.S.

Sofia Vergara

Vergara joins a long list of celebrities who back Suja, a company that uses organic, non-GMO fruits and vegetables to make pressed juices. Others include Leonardo DiCaprio and Jared Leto.

Lebron James

The NBA star investor often uses his social media accounts to promote Blaze Pizza, a fast-dining pizza restaurant that started in 2012.

John Legend

Legend invested in Thrive Market, an American e-commerce retailer that sells natural and organic food products. Other celebs who have invested in the membership-based grocer include Jillian Michaels, Will Smith, Deepak Chopra and Tony Robbins.

Gwyneth Paltrow

The American actress invested in Daily Harvest, a 3-year-old company that sells frozen, single-serving organic smoothies. Serena Williams also is an investor.

Justin Timberlake

Timberlake was an investor in antioxidant drink maker Bai prior to its sale in 2016. However, he is still actively involved in the company. Zac Brown also was an investor presale.

Katy Perry

The American pop star invested in Core Premium Bottled Water in 2015. The company says the water is balanced with electrolytes and minerals to aid in achieving "the body's Perfect pH of 7.4." Other high-profile investors include Diplo, Juicy J and Max Martin.

Ashton Kutcher

Backed by Kutcher, GrubMarket is an online delivery service that offers a discounted variety of organic and locally sourced food and produce nationwide.

Follow Dalvin Brown on Twitter @Dalvin_Brown