Sugar-Free Brand Good Good Closes Funding Round, Expands Into Baking

Icelandic sugar-free food brand Good Good last week closed a $2 million funding round which the company said will support a planned expansion beyond alternative sweeteners and into a number of new food categories, starting with a pancake and waffle mix launching this month.

The round was led by previous investors Icepharma, K2B Investments and Aton.JL. Good Good’s most recent fundraise prior to this was a $3 million round in spring 2020, which the brand used to support the launch of its products in the U.S. market.

“The company’s management has clearly demonstrated the high demand for its products,” said Svanhildur Vigfusdottir of K2B Investments. “This share capital increase will further boost the company’s capacity, enabling it to respond to the extra demand that is evident in new orders received, and to reinforce its operations with an expanded product line and entry into new markets.”

Created in Iceland in 2015, Good Good’s founding team of CEO Gardar Stefansson, Agnar Lemacks and Johann Kristjansson originally sought to create food products suitable for their relatives with Type 2 diabetes. The company started with sugar alternatives, launching Sweet Like Sugar, a blend of stevia and erythritol. Later, the company expanded to flavored stevia drops and eventually into ready-to-eat products such as jams, a chocolate hazelnut spread and a maple syrup that utilize alternative sweeteners like stevia, erythritol, maltitol and isomalto-oligosaccharide.

Last year the company made its first move outside of sweeteners and spreads, moving into snacks with the launch of a three-SKU Krunchy Keto bar line sweetened with inulin, stevia and erythritol.

According to Stefansson, a “surge in demand” for its products over the past year meant Good Good needed to raise more money. The company reported a 171% increase in year-over-year sales growth in 2020, and the upward sales trajectory has continued in 2021, according to the company. The capital will be used to both scale production of existing lines as well as to launch new flavors and products in new categories, Stefansson said, taking advantage of its ability to leverage its “global network” of co-packers to bring new products to market quickly, Stefansson said. This approach also ensures the “highest production quality and smallest environmental footprint,” with products able to be produced closer to the countries where they are sold.

The brand’s latest category expansion is a keto-friendly Pancake & Waffle mix debuting this month. Made with almond flour and egg white powder and sweetened with erythritol, the mix is sold on the brand’s website for $11.99 per 9.3 oz. bag. Stefansson said that while the launch takes the company into a new category, it’s complementary to its existing lineup and is designed to add incremental sales.

“For us, it all starts with the customer: ‘What do our customers want and need? What solutions are we in a unique position to provide?’” he said. “Our Pancake & Waffle mix was a natural addition to our line of jams, syrups, and chocolate spreads, offering customers an easy way to complete their low-carb, no added sugar breakfast or brunch meal.”

With its new funding, Good Good also plans to expand across all sales channels, allowing its products to be “as accessible as possible to our customers,” Stefansson said. The brand’s products are currently sold at 8,500 locations across 36 countries. In the U.S, it’s sold in 6,000 doors including Publix, Albertsons, Meijer and Giant, as well as on Walmart.com, Amazon and the brand’s own ecommerce site.

Stefansson’s company has faced notable competition as it pushes deeper in the U.S., especially as it enters into already crowded markets. He said that while Krunchy Keto bars have seen strong sales in Scandinavia and the United Kingdom, and have picked up distribution in Canada at 7-Eleven and Loblaws, the product haven’t yet been embraced in the U.S., where the category is saturated with an increasingly wide array of low sugar offerings.

“As a result, we are working to better market our bars and to highlight their unique product attributes,” he said.

As it moves into the baking category, Good Good will face off against similar pancake and waffle mix offerings in the U.S. from keto-friendly brands like HighKey and Keto and Co., along with better-for-you and plant-based offerings from Purely Elizabeth, Birch Benders, Bushwick Kitchen and Simple Mills.

Recognizing the differences in trends and cultures between the U.S. and Europe, Stefansson said going forward, Good Good is innovating “for a global market, while strategically launching products in each region that we believe can be successful there.”

“Our strategy has been to launch no added sugar products that people want and need, and our goal is to become a sort of sugar-free platform for great-tasting products,” he said.