Nick’s CEO on $100M Raise: ‘We Choose to Focus on Growth’
Late last month, Swedish better-for-you snacking and ice cream brand Nick’s announced it had raised $100 million, bringing the company’s total capital raised to $160 million.
Speaking to NOSH last week about the raise, Carlos Altschul, Nick’s USA CEO, said the funding will allow the four-year-old company to take advantage of its current momentum and accelerate its rapid global growth overseas and in the U.S.
The large capital raise is “evenly matched” to the opportunity that the company, and investors, see in the marketplace, according to Altschul. Raising the funds now offers the company the ability to aggressively pursue new retailers and launch new products, without having to simultaneously also worry about the next raise.
“We have partnered with investors who share a long term horizon in mind,” Altschul said. “[They] realize that if we want to make an impact on a global scale, really change the way people eat and deliver solutions across multiple categories in multiple markets, that we should think about our plans, think about our growth, and think about how we accelerate that growth with a longer term mindset.”
Entering the U.S. market in 2019, Nick’s currently sells low-sugar, low-carb ice cream (including novelties) and protein bars. In Sweden the company’s portfolio includes more commodity products (such as sweeteners) as well as baking mixes and confection. Some of the projected growth, Altschul said, will come from bringing European products to other markets, but the brand also plans to launch region-specific products as well.
To fuel that growth, Nick’s next task will be expanding its reach. The company is seeking to double its U.S. store count in the next year to over 13,000 retail locations, along with exploring opportunities to expand beyond its existing global footprint of 16 countries. Connecting with shoppers online will also be top of mind. Nick’s ice cream is available on delivery services such as Doordash and Uber Eats in urban markets such as Austin, Miami, New York, Atlanta and Minneapolis, while last month the company debuted direct-to-consumer shipping across Europe
Despite seeming to be on an expansion tear, Altschul said the company is determined to be financially smart about how it approaches its goals.
“We see the potential to accelerate [our] growth. And we see the potential to accelerate the momentum that we have,” he said. “We are not only focused on how fast we can grow, but making sure that that growth is sustainable….[we’re putting] in place the right structure to make sure that as we are scaling, we are doing it in a responsible and profitable way.”
Nick’s had roughly $10 million in gross sales last year and is on track to more than triple that number this year, he said. The US currently accounts for about half of the company’s sales, a figure that is expected to remain high because of the U.S. larger population size as well as a distribution system that makes growth easier then other markets.
While the company isn’t profitable yet, Altschul expressed that this is more of a strategic “choice” than a burden, with the company opting to invest heavily in marketing, distribution and innovation. More developed markets, he said, are already hitting profitability.
“We choose to focus on growth, because growth allows us to make an impact and because we have momentum now that we see an opportunity to accelerate,” Altschul said, adding that scale will eventually help drive Nick’s premium prices down.
But for now, the company is reinvesting into the products themselves to improve taste and “the customer experience.” Rather than focusing on cost, the company has elected to invest in delivering better “value.” Along with a forthcoming branding makeover, Nick’s is set to release a reformulated version of its ice cream with more inclusions later this year, A large portion of capital is also being invested back into marketing efforts to drive trial and brand awareness, Altschul said.
“What we are trying to build here is a trust, a trust with consumers that every time they pick up a Nick’s product, it’s gonna deliver on their expectations and it’s going to have the best nutritionals possible,” Altschul said. ”We know that the repeat will follow once consumers try our products.”
