From high-tech fats to ‘non-animal’ dairy: Swedish foodtech brand Nick’s raises $30m, hires ex-siggi’s exec to drive US expansion

By Elaine Watson

- Last updated on GMT

Nick's: 'To truly disrupt the category, we needed to deliver the experience of a full-fat, full-calorie ice cream...' (picture: Nick's)
Nick's: 'To truly disrupt the category, we needed to deliver the experience of a full-fat, full-calorie ice cream...' (picture: Nick's)

Related tags Nick's Ice cream frozen desserts

Swedish brand Nick’s – which entered the US in late 2019 with a range of light ice creams and generated revenues of $10m in its first full year on the market (2020) – has hired dairy industry veteran Carlos Altschul to head up its US business after raising $30m to fuel its expansion plans.

The latest round of funding* – led by Stockholm-based Gullspång Invest (early investors in Oatly) and Capagro, a VC fund dedicated to food-tech – will help Altschul, formerly CEO at skyr brand siggi’s, to build his team and expand distribution.

While Nick’s plays in multiple categories of the store in Europe​ including bars, beverages, snacks and sweeteners, the US business – for now at least – is laser focused on the light ice cream (pints) market, which is a $500m market growing in the high single digits, Altschul told FoodNavigator-USA.

“We see a lot of opportunity in other categories, but our focus for now is ice cream. We started in November 2019 with a regional launch at ShopRite in the northeast andour goal was to become the highest velocity better-for-you ice cream in the places where we got distribution.

“We achieved that and closed the year – despite all the difficulties with the pandemic – with more than 4,000 stores. We’ve got a good presence with all northeast retailers, we’ve expanded with Albertsons on the west coast, and we’ll be in all west coast Kroger banners starting this spring.

“We have a product that is disrupting this segment and we want to get it in front of more consumers,” ​added Altschul, who said “around two thirds​” of the recent $30m capital raise would be allocated to the US market, given its size and potential.

‘To truly disrupt the category, we needed to deliver the experience of a full-fat, full-calorie ice cream, and EPG was a key enabler of that’

While light ice cream is a highly competitive segment, Nick’s stands out in part through its use of EPG​, a plant-based oil that has been restructured in such a way that virtually none of it is absorbed by the body.

The solid fat - which is listed on food labels as ‘EPG (modified plant-based oil)’ – contains just 0.7 calories per gram (fat usually contains 9 calories) and can be used to replace up to 85% of the fat in scores of applications from confectionery to nut butters and plant-based meat, enabling significant calorie reductions without compromising on taste or texture, according to its manufacturer Epogee​.

US CEO Carlos Altschul: 'I tried the ice cream and I was blown away...'

Unlike Olestra​ (which had messy side effects) or fat replacers made from sugars, gums, starches or fibers, EPG functions like fat in food products and in the human body because it’s actually made from fat, said Altschul.

To truly disrupt the category, we needed to deliver the experience of a full-fat, full-calorie ice cream, and Epogee was a key enabler of that. We also have long term exclusivity to use EPG in the ice cream category.”

He added: “I was inspired by Nick’s ​[founder Niclas ‘Nick’ Luthman] ambition and passion, but what really was the catalyst for me ​[to join the company] was the products. I sat down with my family and we tried the ice cream and I was blown away because you’re getting 30% of the calories and 100% of the joy, and I realized there was a real opportunity here.

“We’re offering the best taste and texture with the lowest calories, but we’re also committed to continuous improvement, so we’re currently in the process of renovating the formula further to deliver both the lowest calories and the lowest net carbs​ [in the segment].”

Don’t have a cow? Non-animal dairy proteins unlock new segment in vegan ice cream category

Another segment in which Nick’s is hoping to make a significant splash this year is vegan ice cream.

Right now, the category is populated by plant-based products (coconut, almond, oat etc) but Nick’s is one of a handful of brands (see Graeter’s​, Brave Robot​, Smitten​) pioneering a new ‘animal-free’ sub-category that utilizes ‘real’ milk proteins (from Perfect Day​) that are produced by microbial fermentation instead of cows.

As no animals are involved in the production of the ‘non-animal whey protein’ in Nick’s new frozen desserts - which started shipping direct to consumer in mid-December – the products are vegan (although consumers with milk protein allergies are reminded that they contain milk allergens).  

The products – which also contain EPG – deliver the sensory experience of regular dairy ice cream with no lactose (as no milk sugar is involved), and no compromise, said Altschul. “It’s better for the consumer but also better for the planet.

“We also have a subscription service for these products, which many of our consumers have signed up for. What’s unique about the line is that not only does it eat like a traditional dairy ice cream, but it has the nutritionals that Nick’s stands for - low calories and low net carbs – whereas in plant-based dairy, manufacturers often solve formulation problems by adding more sugar.”

nicks vegan ice cream
Nick’s is one of a handful of brands pioneering a new ‘animal-free’ sub-category that utilizes ‘real’ milk proteins (from Perfect Day) that are produced by microbial fermentation instead of cows.

‘We shouldn’t have to retrain consumers’ palates to enable them to eat healthier’

So how do consumers – who claim to be seeking out more simple, natural, wholesome foods with short, ‘clean,’ ingredients lists – feel about Nick’s products, which have a lengthy ingredients list featuring ingredients that may be sourced from natural ingredients, but are not found in most people’s kitchens?**

It’s a fair question, said Altschul, who previously stood at the helm of a brand (siggi’s) that made a virtue of its ultra-short ingredients lists. But consumer label expectations are category-specific (consumers accept that you can’t make an Impossible Burger or a vegan ice cream with a couple of ingredients), and shoppers are not prepared to compromise on taste and texture, especially in a category such as ice cream, he said.

We shouldn’t have to retrain consumers’ palates to enable them to eat healthier, and in order to do that we need to leverage food science, although we have very strict guidelines in terms of the natural ingredients we use, and we’re very focused on explaining our ingredients to consumers through our packaging, our website, and our DTC business.”

*The round was also supported by Khosla Ventures, DNS capital, Djursholm Investment Group, Skandrenting AB, and PeakBridge.

**Ingredients list, Nick's Strawbär Swirl: ​Skim milk, strawberry lumpy puree (strawberries, erythritol, glycerin, water, natural flavors, citric acid, locust bean gum, xanthan gum.), soluble corn fiber, allulose, EPG (modified plant-based oil), erythritol, cream, milk protein concentrate, strawberries, sorbitol, coconut oil, xylitol, whey protein isolate, acacia gum, modified starch, natural flavors, guar gum, salt, tara gum, fermented sugar cane Reb M, red color (beta-carotene, beet juice), carob bean gum, ascorbic acid.  

OWN-peanut-butter-with epogee

"We are very excited about our relationship with Nick’s and the incredible success they are having in such a short period of time. In addition to Nick’s Swedish light ice cream, we are currently in the Sweet Nothings caramel candy cluster by Health Smart Foods​ as well as a peanut spread and a chocolate hazelnut spread by Own Your Hunger​, both of which are currently available Direct to Consumer.

"We are also looking forward to more product launches driven by the EPG technology in the coming year.”

Jayme Caruso, chief commercial officer, Epogee (the maker of EPG)

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