Lub Foods Invented Ice Cream With Fat You Can’t Absorb

Imagine feasting on a creamy dessert, chocolate chip cookie, or pizza – without gaining weight, biting your teeth, or spiking and dropping blood sugar.

Venture funds are now betting that this is the future of food with $ 30 million invested in Swedish food technology start-up Lub Foods, owner of the sugar-free brand Nick’s which has won a license for a new type of ice cream containing a special fat. that the body cannot absorb.

This is part of a growing trend for investors to invest money in food Technology, with companies making lab-grown meats, plant-based meat, and 3D printed cheese, all generating significant sums against a backdrop of changing consumer habits.

Other recent examples are the Spanish startup Cubiq Foods, which won an investment of 5m to continue developing their so-called Smart Fat, a vegetable oil and water emulsion that can replace fatty components in processed foods. In November, candy giant Mars announced it would acquire healthy snack maker Kind North America, valuing the company at around $ 5 billion according to the New York Times.

Lub Foods fat is a vegetable oil called Epogee Fat, or EPG, which is not absorbed by the body due to its molecular structure which resists the action of digestive enzymes. EPG can reduce up to 92% of calories for each unit of fat in products like ice cream, frying oil or baked goods, depending on the company.

So when will it be available in stores across Europe? And what’s the next step for innovation and food?

Niclas Luthman & Erik Lennartsson

The backstory

Lub Foods was founded just seven years ago after co-founder Niclas Luthman (hence Nick’s) was unable to find suitable substitutes for chocolate after being diagnosed with prediabetes.

The catalog now consists of snacks, protein bars, ice cream, powdered drink mixes and sweeteners and are more or less available in 16 markets.

“I realized that it was possible to change my condition through self-treatment and I changed my diet. That was the start of it all, ”he tells Sifted from his home in California, where he moved to focus on new product development and continued expansion in the United States.

This personal experience was testament to a broader trend towards low calorie foods that has only accelerated in recent years as consumers become more health conscious. The market is now worth $ 10 billion a year, according to a Business Wire report, and is expected to grow an additional $ 3 billion in seven years. As a result, big players like Nestlé have developed a range of sugar-free alternatives, one of which is already competing with Nick’s in the ice cream market. Niche brands like Halo Top and Rebel are also fighting for a similar space.

Secret weapon

Nick says he has a secret weapon, being the only company to use Epogee Fat, which he describes as the “holy grail” of making delicious, low-calorie foods.

However, the company has worked hard to achieve the right taste to appeal to consumers.

“We’ve failed hundreds of times trying to make a good recipe base,” says Erik Lennartsson, global innovation director and the mastermind behind ice cream.

“In a sense, it’s a ingredient to use because it has special characteristics. Much of our work has been devoted to maneuvering them, in part being smart with the flavor choices. We worked closely with a team of flavorists in the United States, and today it’s 99.5% perfect, ”he says.

Lennartsson has a passion for ice cream and describes the texture of Nick’s pints as creamy, which he believes is a key success factor.

“You have to have both texture and taste. Most brands that work in the no sugar added segment fail on their texture, which is often icy and too hard.

With the exception of Epogee Fat, Nick’s also has a second selling point for the brand which is that they don’t use the maltitol sweetener like many of their competitors, according to Lennartsson.

Maltitol has an effect on blood sugar and is therefore not the best alternative for diabetics. Nick’s strategy is to use only natural sweeteners like xylitol, made from birch sugar, erythritol, which is found in pears, and allulose, which can be found in pears. dried fruits such as figs.

Startups in the lead

We are having a huge time in foodtech with companies reinventing what food is and how we make it. Much of this is extremely technical and done in the lab.

“If you want to be successful in this market today, you have to master your food innovation process, you have to approach it from a scientific point of view. Right now there is a huge global race going on. And overall, we’re going through a massive turnaround in the way we produce food, ”Luthman says.

Luthman says much of this science is done by startups, rather than the big multinational producers.

“Today, innovation in food tech is driven almost 100% by startups. While it would make sense for large companies to do this, there are simply too many levels of decision making to develop these products, ”he says.

A catch

Lub Foods launched ice cream in the US market in 2019. The reception was so good that they even sold ice cream online during the pandemic, distributing it on dry ice. Last year, the US subsidiary sold products for around $ 10 million, all of which came from ice cream.

However, one obstacle to its success in Europe remains: EPG has not yet been approved by the European Food Safety Authority, EFSA.

“I probably would have stayed longer in Europe if these innovations had been approved earlier,” says Niclas Luthman. “The toolbox that we can use to prepare new recipes is much more important here. This could even risk that European companies with global potential are handicapped in the race for food innovation, ”he continues.

“While we are taking baby steps, the Americans have already walked for miles,” Lennartsson says.

Lub Foods expects EFSA to give its approval within two to three years. In the meantime, the chief innovation officer will focus on improving revenue from their existing portfolio and expanding their new manufacturing facility in Macedonia, which will increase their production capacity seven-fold.

The new $ 30 million investment round was led by Stockholm-based Agtech and food tech fund Cap Agro, Gullspång Invest, based in Stockholm (first investors in Oatly), the investment firm of the heirs H&M Dig Investment as well as DNS Capital, based in Chicago.

“But we’ll need another $ 30 million in a few years. Continuing our launch in the United States, we will need a lot of fuel to build our distribution. After that we could be profitable, ”Luthman says.

Luthman adds that they are starting to become profitable in Europe, however, and the focus will be on growth over the next few years.

“What we are seeing now is leading to an explosion in consumer demand for food innovation. Companies like Beyond Meat and Impossible Foods have driven this development, which I really love to be a part of. Soon they will have to rename Silicon Valley to Food Valley, ”says Luthman.

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