It's only a month into 2021, but Nick's Ice Cream has already had a banner year.
In January, its Sweden-based parent company, LUB Foods, closed a $30 million funding round. Nick's started selling a vegan ice cream made with ingredients from animal-free dairy protein company Perfect Day. And the brand hired a new CEO: Carlos Altschul, a dairy industry veteran most recently with Siggi's Icelandic yogurt who has a track record of growing trendy new entrants to old segments.
The better-for-you ice cream brand, which launched in the United States in late 2019, is already sold in nearly 4,000 stores here. Nick's closed 2020 with more than $10 million in sales, with the United States supplying about 40% of the company's total business, Altschul said. And it has ambitious plans for even more U.S. growth as 2021 continues. The brand hopes to triple or quadruple sales this year, and expects more than half of total company sales to come from the United States, Altschul said.
He sees 2021 as a banner year for expansion — and winning over new customers. And he is betting that by this time next year, the efforts will have paid off.
"Hopefully, we've done our job and we've gotten consumers across the country to try Nick's Ice Cream or to try a product from Nick's and to realize that they can get a healthier option without compromising on the taste and experience that they're used to," Altschul said. "That is helping us fuel more innovation and continue to bring even more offerings."
The story of Nick's Ice Cream begins in 2014, when a Swedish mechanical engineer named Niclas Luthman was diagnosed as pre-diabetic. Luthman changed his diet and started Lub Foods to create indulgent better-for-you products. The company started in Luthman's home country of Sweden, but its products have expanded to more than 15 European markets and the U.S.
Each pint of Nick's in the United States is branded as "Swedish Style Ice Cream." But this is not a defined ice cream style, like Greek or Icelandic yogurt. Rather, the company leaves it to consumers to define "Swedish style" themselves, based on their impressions of Nick's ice cream.
"Swedish style is more than just the product attribute," Altschul said. "It's tied to the fabric and to the values and to the culture that we are as an organization. If you think about something like Swedish furniture, it's something that delivers not just great functionality, but great design. If you think about Swedish cars, [it] is not just great design, but they have the best safety features out there. For us, 'Swedish' is not only how we think positively behind the brand, but also it's the ability to deliver great-tasting snacks that are better for you and better for the planet."
That attitude led to Nick's unique product formulations. Its ice creams feature Epogee Foods' fat-replacing ingredient EPG, which is a rapeseed oil-based fat substitute that can reduce fat calories by 92% because the oil cannot be absorbed by the body. Altschul said Nick's has an exclusive agreement with Epogee, so no competitors can formulate in quite the same way.
Nick's flavors also don't use regular sugar. Instead, the pints are sweetened with natural substitutes, including stevia, monk fruit, erythritol and xylitol. Put together, this means a pint of Nick's can have only a few hundred calories — close to the same calorie count as a scoop of conventional ice cream. The company says each serving of Nick's has between four and seven grams of net carbohydrates, and the different varieties are keto-friendly.
Altschul said that Nick's strives to give a better overall experience and health profile than other brands of better-for-you ice cream. In fact, he decided to take the job helming Nick's after he compared the taste of its product with the other options on the market.
"We put the consumer experience and we put delivering great-tasting ice cream as our No. 1 priority. And then we leverage our food tech to get to the best nutritionals possible," Altschul said. "By doing that, we are showing that we're capitalizing not just on the potential for trial — which I think other brands have shown. There is a consumer demand for better nutritionals out there."
Because Nick's uses ingredients that are uncommon in ice cream, Altschul said transparency is important. The company's website has a detailed FAQs section that explains the ingredients the company uses and their functions.
"But we do get some questions about specific ingredients that we address, of course, right away," he said. "And that helps [consumers] understand ... some of the magic that allows us to deliver this great-tasting product."
A new vegan option
Nick's primary focus is to over-deliver on the ice cream experience, Altschul said. In business, this translates to looking for the ideas and ingredients that can improve on better-for-you treats.
This led to the company forming a partnership with Perfect Day, which makes dairy proteins through fermentation — essentially creating real milk without cows. Currently, Nick's has three vegan flavors available on its website made with Perfect Day's dairy ingredients: Swedish Mint Chip, Karamell Swirl and Choklad Choklad. According to a press release from the company, seven more flavors made with Perfect Day will be available later this month. The vegan flavors will also debut at some grocery stores in the spring.
In the past few years, Perfect Day has been forging partnerships with different manufacturers of traditional dairy, as well as ingredients companies including Archer Daniels Midland. Perfect Day has created some buzz in the food world for its authentic dairy products made without cows, which it has first tested in ice cream. The company created its own line of Perfect Day brand ice cream, and has since partnered with premium ice cream makers Smitten and Graeter's, as well as the Brave Robot brand from The Urgent Company, which develops Perfect Day's dairy-free proteins into CPG products.
Altschul said Perfect Day's dairy protein fits into the whole package Nick's is trying to deliver.
"Hopefully, we've done our job and we've gotten consumers across the country to try Nick's Ice Cream or to try a product from Nick and to realize that they can get a healthier option without compromising on the taste and experience that they're used to."
"For us, Perfect Day was extremely appealing, not only because of the better-for-you attribute, but also for the fact that it's better for the planet as well," Altschul said. "It's what we're looking to do, and what we know is resonating with consumers in terms of the future of dairy and the sustainability that consumers are looking for."
When Perfect Day's proteins first debuted in its self-named ice cream, the product was priced at a premium, or $20 per pint. Likewise, Smitten and Graeter's brand ice creams both appeal to higher-end consumers. While there are no individual pint prices on Nick's website, those made with Perfect Day's proteins seem to cost the same as the regular versions: about $59 for a box of six.
A future of more
In the U.S., Nick's is an ice cream brand. But it has the potential to be much more.
In Sweden, consumers can buy Nick's brand ice cream — as well as Nick's candy bars, protein bars, chocolate drink powder and branded non-sugar sweeteners. All of these products are sugar-free and lower in calories than comparable products.
Altschul wouldn't give a direct answer about whether some of these products would be sold in the United States in the near future. But he said new products from Nick's would be much like its ice cream: able to stand out in a category, even one that is crowded.
"We think you can truly deliver something unique, even where better-for-you segments exist," and "close the gap between better-for-you and fully indulgent items in those categories," Altschul said.
"So, for us, any of these lines will be big and game-changing and providing offerings for consumers that they can't find today."
Nick's will devote about two-thirds of the recent funding round to the U.S. market, spending it on new innovations, product renovations and expansions.
Altschul said the single greatest way to win over consumers is to let them taste the product. And as COVID-19 vaccinations become more widespread, Nick's will have the opportunity to try more direct marketing approaches, such as sampling. It had to put promotions and tasting activities on the back burner during the pandemic, and instead rely on buzz, social channels and a quickly built direct-to-consumer site to give consumers an opportunity to try the ice cream.
Nick's is also working on adding more flavors with Perfect Day's dairy proteins, and reformulating and reducing carbohydrates in its existing ice cream. Altschul predicts Nick's will continue to define the better-for-you frozen treat space. After all, he said, there has been a significant amount of repeat buys for the brand.
"That's what makes us reiterate that we're focused on the right things, and that by continuing to lead, we can continue to make a difference for both better-for-you, but the whole ice cream category overall," Altschul said.