December 14, 2017

Texas-based dairy-free ice cream maker NadaMoo! announced it has successfully completed a $4 million Series A led by Canadian impact and mission-based investment firm InvestEco. Other investors in the round include District Ventures Capital, Rugen St. Capital, Working Lab Capital, and other unnamed like-minded backers.

Founded in 2004 by the Nicholson family, NadaMoo! produces dairy-free, GMO-free, gluten-free, and plant-based frozen desserts made from a base of organic coconut milk that are sweetened with agave nectar. Within the company’s mission is the goal of using organic, GMO-free and Fair Trade Certified ingredients whenever possible to advance a fair, sustainable, and contaminant-free food supply chain.

This consciously-integrated stewardship for both health and the environment fits well with InvestEco’s investment thesis of investing in companies that promote health and sustainability in the food sector – a mission reflected in its previous investments in  Kuli Kuli, Maple Hill Creamery, and Vital Farms.   

“We invest in high growth expansion stage companies that promote health and sustainability in the food sector, and we think NadaMoo! hits our target in all respects,” Andrew Heintzman, CEO of InvestEco, told Project Nosh. “[It’s a] fabulous product, very credible people, fun branding, and a great market opportunity.”

Under the leadership of CEO Daniel Nicholson, who assumed the role in 2011, NadaMoo! has expanded its distribution over the past six years, both geographically and into new supply channels as the dairy alternative market has grown beyond a niche category geared toward consumers with allergies to one that is quickly gaining mainstream acceptance from more health-conscious consumers.

“The plant-based lifestyle is becoming more mainstream, in part because consumers are catching on to the various health, environmental and ethical benefits of plant-based foods,” Andre Kroecher, co-founder of Daiya Foods, told Food Dive. “If you walk down what used to be just the dairy aisle, you will notice that plant-based alternatives to dairy are occupying a significant portion of the shelf. The sustained demand for great tasting plant-based dairy alternative products made from nuts such as almonds, seeds such as hemp or sunflower, potato, tapioca, rice, oats etc. indicate they are consumed and thought of as great tasting, staple foods that happen to be plant based.”

This trend has resulted in NadaMoo! seeing a six-fold increase in revenue in the two years between 2015 and 2017 – reflecting growth that is outpacing the double digit growth for the overall plant-based frozen dessert category, according to FoodNavigator-USA.

The potential for increased sales and greater market appeal has also not been lost of some of the most iconic names in the ice cream industry such as Ben & Jerry’s and Halo Top. Meanwhile, other leaders in the dairy space have been objecting to the use of the terms “milk” or “cheese” for example, when labeling plant-based products – something that Nicholson sees as self-defeating.

“Over the long haul, unless they want to be debating with themselves, these large dairy companies are going to have to move on, as there’s no value in it,” Nicholson told FoodNavigator-USA. “It’s just a lot of fear mongering. Consumers know what they are buying and it’s for a lot of reasons, cholesterol, allergies, animal welfare, health, and I just think it’s [pushback against using dairy terms on vegan products] a bunch of rubbish. It’s a free market and consumers will decide.”

But for NadaMoo!, consumer trends are providing great opportunity for growth. In the U.S., 17 percent of all consumers eat a diet that is mostly plant-based, according to data from HealthFocus, while 60 percent state that they are reducing the amount of animal-based protein in their diet.

Drilling down, the dairy alternatives market is expected to reach a value of $14.4 billion by 2022 – good news for NadaMoo!, which is examining plans to add other plant-based product lines.

“We’ve always done a good job of launching new flavors and we have that process down as a company,” Nicholson told FoodNavigator-USA, adding, “… but next year we are going to dig deep and start working on new products even outside of the frozen dessert space, and really take the opportunity to show the industry what the NadaMoo! brand is about.”

-Lynda Kiernan