Keto-friendly Nick’s Ice Cream raises $100m, expands further into snacking segment

28-Oct-2021 - Last updated on 28-Oct-2021 at 15:44 GMT

'We can’t wait to use this funding to bring more new N!CK’S products consumers love across more snacking categories...' Image credit: Nick's Ice Cream

Related tags Nick's keto Ice cream animal-free dairy

Swedish keto-friendly brand Nick’s – which entered the US in late 2019 with low carb light ice cream pints and has since expanded into ice cream sandwiches and keto snack bars – has raised $100m in a Series C round led by Kinnevik, Ambrosia Investments and Temasek, to support its rapid growth.

The round - which was also backed by Gullspang, Peak Bridge, Capagro and Nicoya - will support new product development, retail expansion, new hires, and “significant investments in R&D” at the company, which was launched by founder Niclas Luthman in Stockholm in 2017, and has since expanded into 16 international markets.

“Consumers can’t get enough of our ice cream pints, protein bars and most recently our Cookie Kräms,” said Carlos Altschul, CEO North America, where Nick’s products are now available in 6,700 stores.

“We can’t wait to use this funding to bring more new N!CK’S products consumers love across more snacking categories.”

The Nick’s brand - which claims it is now the #1 direct-to-consumer pint ice cream delivery brand in the US - has also seen surging sales on Amazon for its new keto snack bars, said the firm, which has taken off like a rocket ship in the US as consumers seek permissible indulgences - products with fewer calories and low carbs, that still deliver on taste and texture.

“We generated over $9m in gross sales [in the US] last year - slightly less in net sales - and we are on track to triple that number for 2021," said Altschul, a dairy industry veteran who took the helm at Nick’s USA in January 2021.

While Nick’s plays in multiple categories of the store in Europe, including beverages, snacks and sweeteners, the US business initially focused on light ice cream, said Altschul. However, its keto-friendly bars (“they have the nutrition of a protein bar but taste like candy”) – which launched direct to consumer at Nicks.com and are now rolling out to select retail outlets – have been a big hit, while new ice cream sandwiches ‘Cookie Kräms’ have just hit the market.

"The bars are now available in brick & mortar. They are confirmed on shelf at Wakefern (Shoprite) and Big Y. They will be on shelf at Stop & Shop, The Giant Company, Harris Teeter and more in the coming months.

"Kräms launched direct to in August and have been N!CK’s most successful launch yet."

Direct to consumer

The bricks and mortar business is growing strongly, with the vast majority of retail partners increasing their SKU count during category reviews, said Altschul.

However, the direct-to-consumer business, which has only been up and running for a few months, has been a runaway success story, he said, with distribution partner e-Tailer Inc – which handles ice cream distribution for multiple brands - claiming Nick’s notched up higher direct to consumer sales than brands such as Ben & Jerry’s and Häagen-Dazs over the summer.

The Nick's brand resonates with shoppers at many levels, with buckets of consumers attracted to a range of attributes, from low calories to low net carbs or keto to particular flavors, said Altschul in a recent interview with FoodNavigator-USA.

“It’s all about getting the right messaging in front of the right consumer, so we are continuously optimizing our messaging for the right audience. So in some cases, we are testing 30,40, even 50 types of messaging per week, as what is relevant or resonating one week might not be resonating two or three weeks later. So it's an ongoing process.”

EPG: Same taste, texture, a fraction of the calories

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 - listed on food labels as ‘EPG (modified plant-based oil)’ – contains 0.7 calories per gram (fat usually contains 9 calories), enabling significant calorie reductions (Nick's pints have 220-360 calories) without compromising on taste or texture, said Altschul.

Nick’s – which sweetens its products with a combination of allulose, erythritol, and steviol glycoside Reb M – has recently renovated its core range to further reduce net carbs, said Altschul, who said the brand’s keto-friendly credentials are attracting consumers, although it doesn’t reference keto on the front of pack.

Animal-free dairy...

For its 7-strong vegan* range, Nick’s is also 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.

As no animals are involved in the production of the ‘non-animal whey protein’ in Nick’s frozen desserts - which started shipping direct to consumer in mid-December 2020 – it describes the products as vegan, although consumers with milk protein allergies are reminded that they contain milk allergens on the front of the pack, said Altschul.

While the notion of a vegan product that contains dairy proteins is challenging for shoppers, consumers will get used to animal-free dairy as a concept as these ingredients become more widely used in the food industry, predicted Altschul.

* There is no legal definition of 'vegan' enshrined in US food law, so manufacturers make their own judgments or rely on 3rd party certifying agencies if they wish to adhere to a specific standard. Nick’s says its products are vegan because the whey proteins it uses from partner Perfect Day are made “without the use of animals.”

That is, although its whey proteins are identical to whey protein from cow’s milk, they are not derived from cow’s milk, but made via microbial fermentation in a tank.