Meet Our Frozen Cocktails
for Summer 2016
N1CE was launched last Summer in one country. By 2017 we plan to be in 20.
Sebastian Ingrosso and celebrity bartender Jimmy Dymott hatch the idea for frozen cocktails perfect for live music events.
Found ice cream manufacturing partners to help produce our frozen cocktails. They’ve been critical partners to develop our unique production technology.
We launched at home in Sweden. It was mayhem as we sold 250,000 units in the first three months!
We’ve expanded into nine countries this year. In the first quarter we sold 250,000 cocktails around the world.
We just closed nearly $100k which will help us open one more country. We’re raising more to accelerate growth and solidify our lead in the frozen cocktail market.
By early 2017 we plan N1CE distribution to cover 20 countries. Given our technological lead and hold on the crucial ‘frozen’ production facility we’re confident we won’t have significant competitors for at least 3 years.
Taking the World by Storm
Supposedly invented by an American mining engineer who was in Cuba at the time of the Spanish-American War and popularized by a congressman back in 1902.
Three Puerto Rican bartenders contest the founding of their national drink. One claims he made it at the Hilton Beachcomber Bar in San Juan 1952.
It's been traced to British sea captain Francis Drake, who heard South American Indians used the drink to cure dysentery and scurvy while at sea.
Early stories of the margarita come from 1938 Mexico where it was crafted for dancer Majorie King who was allergic to many spirits, but not tequila.
We Want You to Join the Party
May 15, 2016
Our fans believed in our product and drove our expansion. The people who've helped us spread the word should have the opportunity to invest in us. We want you to be by our side, enjoying the success you're helping to create.
Thanks to everyone for their support and for following us this past year. This has been the wildest ride a business could ever be. We've really hit on something special with the taste, packaging, convenience and concept, and a brand name that goes the distance.
We've cracked the code on how to bring mixed drinks to the public in a ready-to-serve frozen cocktail. This summer, we're contracted into festivals that have over 2,5 million attendees, which is the push we need to go global with our brand. The overall market potential for this is huge, not just in festivals and in the music scene, but in hotels, restaurants, beach clubs, retailers, groceries, convenience stores --you name it and we're going there.
We're going to be into eleven countries by the end of the year, and more in the coming years after that. It’s all attainable, all in reach.
We’re inviting you to join us. Be an investor. Help us go global with N1CE Cocktails.
Sebastian Ingrosso, Jimmy Dymott, Mikael Drené
Meet the Founders
and the rest of the team
From 386 Investors
We’re building an innovative lifestyle brand company. Our flagship product is “N1CE Frozen Cocktails”: great tasting, ready-to-serve, frozen mixed drinks with 5% alcohol content, served in paper cones. With our partners, we’re getting the brand into restaurants, clubs, bars, festivals and events, and eventually into retail and grocery stores.
We established our business first in Scandinavia, where we test marketed our products last year to great success. We saw very high brand awareness and a lot of support from customers. They loved the taste and convenience of having a frozen cocktail, served in a grab-and-go paper cone.
We were just a few guys, including EDM music star Sebastian Ingrosso and celebrity bartender Jimmy Dymott, discussing how to sell frozen cocktails. From the beginning we wanted to bring ready-to-serve, frozen mixed drinks to the public. We started with concerts and festivals because right now, you can only get beer, wine, and hard cider there. We’re bringing mixed drinks into those venues, because there is a real demand.
When we started talking to concert venues, using Sebastian’s contacts in the festival business, they confirmed what we’d noticed: there’d been very little innovations in the drinks they carry, and the options have been limited. They said they were looking for new products to sell, but couldn’t find viable options. They had tried to sell mixed cocktails before, but couldn’t sell as many as they wanted because good cocktails are handcrafted and customer expectations are high. They simply couldn't make them fast enough to meet demand, and they didn't have consistency in quality and taste.
We started in on this idea back in 2014. Right away, we knew even our early trials would need to have thousands, if not tens of thousands, of frozen cocktails at once. We realized that we needed a really strong production partner we could rely on to produce our products with the right quality, at a good price. We found a good production partner in the ice cream industry, then developed the actual product.
We knew how we wanted it to taste, but making the recipe for mass production is really different from making them one at a time. We had to adjust our recipe over and over so the taste was right and the quality was still there, despite it being produced in the hundreds of thousands and later in the millions. We knew that quality would be the key to success and we vowed never to shortcut on ingredients or on the effort to produce the best product, no matter what.
At the end of April 2015, we did our first big market test where we were selling them and measuring sales volumes for each flavor. That first market test was selling in the VIP area at a major EDM concert – Alesso was playing. At the concert, there were 450 people in the VIP area of the famed Swedish venue called Globen in Stockholm. We sold 700 N1CE Cocktails. That allowed us to also get a sense that our pricing – around $6 each at events – was in the right range, which proved to be right on target.
Next, we aimed for a bigger outdoor event. We saw the same success when we offered them to 28,000 concert goers – the consumers loved them, the festival organizers loved them, and everyone benefited.
We’ve also been testing the product in nightclubs and outdoor venues, as well as individually at convenience stores. In Sweden and Cyprus, we set up a full-on market trial during the summer to get some sales volume going. This served as a field test outside of concerts and festivals, to see how they can sell on an everyday basis. We had to validate the market beyond the limited, specialty venues of the festival scene - and, again, we did very well. We sold over 250,000, just in a few months. That showed us that our product was going to be successful in Scandinavia, and that we could take it global, expanding throughout Europe, the USA, and even to countries in Asia.
Many of the festivals in Europe have been around for fifteen or twenty years. They have really high-priced bars, but, even when they try to make mixed drinks on demand, they can’t get the volume up to where it’s profitable. We saw that as a gap in the market. If we could offer a quality product that met that demand for mixed drinks while still being easy and quick to serve, we could sell a lot of them. When we introduced N1CE Cocktails at the first trial events, we saw that we were right; customers loved the product. And, based on the credit card receipts, we saw 26% actually came back a second time to buy another round, which is really high.
The festival organizers loved the products too, because they were fast, ready-to-serve – no pouring, no prep time, no mixing, and no clean up. N1CE Cocktails were a “cash on the bar and go” item – and they sold a lot of them.
In Sweden, we have a very short summer season, ending in late August. The music festival scene and the summer basically ends and for the festivals and events, we are a seasonal product. It’s no or little demand of the product in winter time, here in Sweden for festivals – it is minus 12 degrees. The product is better suited for California, Florida, Ibiza, Spain, Italy, and other sunny destinations. That’s where we want to expand – wherever it’s Spring Break, we're there too: Daytona. Miami Beach. Bari in Italy. Alicante and Barcelona in Spain. Ibiza.
We’re aiming to launch this Spring in the U.S., starting out small in Miami and Miami Beach and expanding from there. We’ve already set up production for the U.S. market, using a production partner in Canada. To serve our expansion into southern Europe and the Mediterranean, we also have a production and distribution partner in Spain now. They have 350 ice cream trucks and 20 distribution hubs covering all of Spain. Their distribution network also extends into Italy, France, Portugal and the UK. In all those countries, combined, they have 50,000 retailer accounts, ranging from hotels, restaurants, bars, beach clubs, and grocery stores.
N1CE owns its own recipes. We manufacture our own compound and we own the recipe of our compound. The basic syrup for each flavor is always made in Sweden – for that, we have centralized production and quality control, so even the US-made product has Scandinavian quality through and through. We send the recipe compound to our production partners, but the exact mix and content of the compound is kept secret. This is part of our company's intellectual property and matching the quality and taste of the flavors we have is a tall order. It took us many months to get there.
By using the same compound from our Scandinavian production facility, we also know that we get the same results and same high quality product wherever we make it. Production factories in Spain, North America or Sweden will all use the same compound, the same procedure, and have the same results. They don’t know the recipe of the compound and even with careful analysis, it would be very difficult to match it.
Our three production partners are exclusive with us, so they cannot make a product for any other brand under those contracts. Also, they have no interest in doing that – we offer them exactly what they are looking for: hundreds of thousands of units as the manufacturing requirement with a growth curve that they know will exceed 5 million units this year, and be at least triple that a year later. Within just a few short years, they expect to be closing in on if not exceeding 100 million units produced. We're good business for them.
There’s also a non-compete in place that seals the deal and explicitly disallows that in our manufacturers. So, it would only be other ice cream companies that aren’t contracted with us that might consider that, but even then, alcoholic products aren’t their focus. For an ice cream manufacturer, their target demographic is 70% kids, so going into an alcoholic beverage market space would be incompatible with their core brand values, and they wouldn’t know the market. They know ice cream sales and distribution, and they know how to market to kids, but it’s a big leap for them to get into an alcoholic product set. There’d be a lot of risk in that leap.
It’d be better for them to partner with us, because we already have the brand. They don't face any risk that way – they don’t have to go out and try to establish their own distribution, establish a new brand on the market, and build market buzz. The easiest way into the market for any of these companies is to contact us and offer to serve as an additional production house once our demand grows – it is a lot less costly, a lot less risky and a very obvious solution.
Presently, we have no direct competition – there are no ready-to-serve frozen cocktails on the market except N1CE. Looking ahead, we might see new competition emerge, probably from the big alcohol companies, but this would be a major shift in their business. It’s not just a matter of producing a different type of drink; it would be a major shift in their whole production cycle. Currently, their products aren’t frozen, so they don’t have any frozen products distribution or warehousing at all. Even if they go into a full effort to compete with this product, it will take them at least a year or more to test, refine, develop recipes, and then deploy or contract the necessary “frozen products logistics train” to compete. We don’t think we’ll see any reasonable competition for at least 2-3 years, so we’ll have the strength of being there 2 or 3 years before the next company hits the market to compete. In that time, we'll reasonably be closing in on a 100 million annual turnover in units sold.
That begs the question as to whether they would want to try to compete or rather just buy us out. These larger companies aren’t traditionally pioneering new spaces themselves; instead, they’ll buy the companies that were the original pioneers. Most likely, we’d likely be an acquisition target rather than actual competitive play for most of them.
We have the “first mover” opportunity. If anyone else wanted to jump into this market, even a big brand like Bacardi or Smirnoff, they just don’t have the frozen distribution infrastructure to do it. They’d have to pioneer a new brand, do recipe mixes, and more; it takes a lot of time and a lot of money.
We’ve seen one company in Sweden try to do something similar with frozen cider, but they don’t have the frozen distribution, so they sell the room temperature product that the customer buys and then freezes themselves. It’s not ready-to-serve, and most of the market, from bars to hotels to convenience stores, is looking for ready-to-serve. Moreover, when you serve the products at room-temperature, you have a shelf life, and you have to pasteurize it. You lose a lot of taste and flavor in that process. But, because we’re frozen from the start, we don’t have to add any preservatives so our frozen drinks taste just like the original: a Pina Colada tastes like any other Pina Colada you’ve had, if not better.
That's where you see the hand of Jimmy Dymott, our mixologist and world famous bartender, at work – it makes a real difference when you have someone like as one of the owners of the company. He's the real deal – you don't get to Bartender of the Year by just hacking around experiment a bit behind the bar. He really knows how to balance flavors, acidity, the right touch of lime, how much water and so forth to bring the product alive and make it taste really great.
The compound is very fresh and with no preservatives. We have real strawberry juice, real lime juice and so on. We don’t need any preservatives because there is high concentration of alcohol in it when we ship it, and the alcohol keeps it fresh. Then, we freeze the product to keep everything just as fresh through the whole production process.
When we started thinking of flavors, we chose to go classic because it’s a brand new product. If we made like a chili margarita, or a mango daiquiri, then people would have no reference to how that should taste. We chose to go classic because people try the Mojito and have that reference point, and they can say, “This really tastes like a Mojito!” It was the same logic for our other current flavors: Pina Colada, Margarita, and Strawberry Daiquiri.
We have other recipes in our bank, and we’ve already developed them, but that’s for the future. Right now, we’re focused on getting the brand out there, with the four flavors we’re producing right now.
When we go into new markets, we attend festivals and other outdoor venues where we can sell them. When we’re at these events, the packaging itself is branding you can use. When you’re standing at the bar with something as novel as a an ice pop, people will come up and ask about it, and get pulled in by the novelty of a frozen cocktail.
And, a lot of the time, people will recognize it already from our social media presence. With every market entry, we’ll have a big social media push beforehand. Our ownership team – Ingrosso, Alesso, Axwell – each have a vast social media reach that we can work with, and we also work with intermediaries and groups like bloggers and artists to push the product. Through all our partners, we have a network of over 7 million people exposed to our product.
We also benefit from the reputation of Jimmy Dymott. He’s famous as an award-winning bartender, and his recipes and his bartending skills are well-known throughout Sweden and around the world. All of this combines to make for a very powerful brand vehicle for us.
The taste experience has been proven to be extraordinary. We see a lot of recurrent buyers, and a lot of people tell their friends. We’ve seen huge recurrent buyer rates, and this huge brand loyalty around that.
We measure this through our points of sale at festivals. Customers usually only pay by credit card, so we can get good data on our customer. We see that at festivals, between 23% and 27% are recurring customers, with people going back to buy more of the product. That’s a very high rate, and attests to a taste and popularity of our product that extends beyond the initial novelty.
We sold at a couple of big festivals in Sweden, up in Stockholm and Gothenburg, We found that we outnumbered the beer and cider sales, selling 5.5 times more N1CE Cocktails than beer.
With that said, it’s important to recognize that we didn’t cannibalize the beer and wine sales to get to that multiple. The beer and wine sales were stable, and actually even improved a bit from previous festivals in prior years. The vendors reported making far more money than in previous years, with the usual profit from beer and wine sales, and then a huge increase from carrying N1CE Cocktails.
At Summerburst Stockholm, there was about 38,000 people present, and we sold, in total, 18,400 products from the bars. About 27% of those sales were from repeat buyers.
It varies a little bit, market to market, depending on what the cost is to produce and what we can sell at, but we’re seeing, basically, a gross margin of 76%. In the future, as we expand, there will be economies of scale at every level, which will improve that even more. Every tier does well with this product – from manufacturing to the consumer point of sale.
In bars and hotels it might be 5 to 7 Euros, or $6 to $8 in the U.S. In retail, the price is not that high, but those outlets don’t look for the same margins as the bars; they price for volume. Because we have a lot of brand loyalty and recurrent sales, they’re able to get that volume in sales.
Final retail rates generally match perceived consumer value for the product. It has a taste and quality that warrants the cost, and customers like it and feel it is priced well.
Last year, 95% of our sales were in Sweden and 5% were in Denmark, and Cyprus. We sold around 250,000 products, but it was only in 60 points of sales – 2015 was our product and market testing year. Ultimately, we called that a successful launch for Sweden and Denmark because the volumes were pretty high for what was really only supposed to be a market test.
We're building on those numbers this year, expanding to new shops, bars and venues and we're seeing the volumes going up accordingly – very rapidly through the first months of 2016. This year, we’ll likely hit over 5 million sales, and I think we’ll probably exceed even that. In just the past couple of months, we’ve added seven more countries. The deal we just signed in Spain will be huge and indicative of future success: we’re reaching potentially 50,000 retail doors in one fell swoop. We’ll be able to sell for longer because the summer season is longer, and the weather is better. The distribution contracts we’ve signed now add up to millions of products sold by year end, and next year that will go up even higher.
Our priority is to look for strong partners whenever we enter into a new market. We’re partnering with the best of the best, because you always do better at the local level working with the guy who’s already in the country. Our expansion strategy is not to set up offices in every country, which would carry a high overhead cost, but rather to partner up with distribution companies that already have the relationships we need to achieve big numbers. We’re expanding on existing networks who have the local knowledge and presence we need, as well as thousands of retail doors already established in their networks.
This is hugely beneficial for us. Take our recent partnership in Spain, for example. Even if it's just half of their 50,000-strong network sells N1CE Cocktails, and even if each of those only sells 5 per week, we’re looking at over 6 million product sales per year in Spain along. Our experience has been much higher than that, and we’ve seen bars and restaurants sell a lot more than 5 N1CE Cocktails a week; that’s probably closer to the figure per hour on an average Friday night.
It isn’t hard to find good distribution agents like this; in fact, they’re reaching out to us based on consumer demand. A lot of our growth is demand-driven. We have to keep up with the demand, not fight to create it.
We cannot enter, immediately, into every region at the same time. We have to build a success story in each region within each country, so we’ll choose a key market and then launch the product there. In Spain, we’ve chosen 4 major cities like Barcelona and Madrid to launch. Once we’re in these major cities, we’ll be established because there’s a lot of tourism around the country. People go on holiday in Spain and then return to the USA and look for the product at the store – and then we'll be in New York too in short order. We are aiming to have quite high penetration and be successful in those first target areas, and then move to next area and achieve distribution in the whole of Spain by next year. It goes very fast.
The partnerships work so well because we work to bring these companies tremendous success as well. The distribution agents get territories on an exclusive basis, which they maintain as long as they meet the sales targets we’re expecting. It helps a lot that we're a fresh new product and not just another brand of beer or wine. They’ve still got their usual orders for their beer or wine, but now we’ve given them something new and interesting to sell alongside. There's a lot of interest from retailers, so distributors play to that and build sales and markets quickly as a result.
With our distributors, 80% of them found us, not the other way around. They were reaching out to us because of consumer demand. We build that demand because we place our products first in the festivals, so you develop a following right away. Because there’s such high demand, we’re able to be very careful in choosing the right partners. Our sales director, Jim Nyberg, does a lot of this. He used to work for one of the biggest Swedish beer brands, so he has the knowledge and ability to see and pick the right kind of distributors, how to measure if they have what it takes to not just buy the product, but to invest in the plan to build demand. Of course, they already want to do this, because then they make money, too.
A large challenge so far has been bootstrapping it. Despite the strong sales and our rapid growth, we are very much a lean, entrepreneurial group of people. We have bootstrapped this entire business, from idea to actual consumer sales.
Bootstrapping like this is challenging, but it’s also very efficient. This isn’t our first rodeo, as the Texans like to say. I’ve been through previous ventures, and if you have too much money at the beginning, you do things that don’t make as much sense. At the beginning, it’s inevitable that you’re going to play the wrong horses sometimes and do the wrong things. If you have a lot of money at hand, you tend to play more wrong horses than right ones. We believe that we should be very focused on what we invest our money in.
The biggest challenge will probably be timing: not having sufficient funds to tap this market as quickly as we need before competitors enter it. We’re going to grow, pretty much no matter what, but having enough money to enter all the markets we want to enter is key – the faster we grow, the faster we grow faster. With another $1 million on hand, we could launch in a lot more countries and territories. With every new market, we enjoy a boost in revenue, which accelerates entering into the next market after that and so forth.
We project about a 3-year-window where we’ll have no significant competitors, because it takes a lot of time to do all the things you have to do to develop a new product. With every passing year, however, the risk of potential competitors entering the market grows, so our biggest challenge is having financing now to attain the market dominant position that will carry us beyond that point. In 3 years, we don’t want to look back and say, “Gosh, we wish we’d done more when we had no competition.”
A good analogy for our strategy is Red Bull. They established the energy drink market. By the time that competitors emerged, like Monster and others, those competitors didn’t so much steal their marketshare as they just expanded the demand for everyone in the market. If we can get these next couple years right, we have every potential of being the next Red Bull – I'm not overstating that.
We could be profitable, but we’re re-investing all of our current profits back into marketing and opening new territories. Sure, we could take our 76% gross margin and pocket it, earn a nice living. Ongoing product sales are stable and growing. Of course, the point is not just to be stable and growing; we want to go global and turn this into what it should be. We don’t doubt that we have the potential to become a global business with several hundred million dollars of valuation within a very short time. It is happening already.
Our partners and investors are also invested in this expansion, and aren’t looking for dividends and returns right now. Everyone is plugging every dollar we earn back into marketing and sales and the expansion of our distribution right now, adding countries and new territories. They’re willing to make the sacrifices now because they believe in the product and have seen how fast we’re entering new products. It really shows their faith in what we’re doing.
We want to raise our next investment round through Regulation Crowdfunding through Wefunder. The new JOBS Act presents a great market shift, and we want to be there for that, be one of the first companies to use Regulation Crowdfunding. We're all about transforming markets with new products, we're about breakthrough ideas – Regulation Crowdfunding is who we are.
However, that’s only one part of our overall financing plan for the next two years. We are going to need more over the next few years if we’re going to fully capitalize this planned market and territorial expansion. It can come in different investment rounds, as well as through the profitability of our market penetration. We expect to raise between $1 million and $2 million dollars through Regulation Crowdfunding and from some accredited investors. Then, we plan on going into Regulation A+ investment round early next year- in others words, a mini IPO.
All of these numbers are well within reach – these are not investment figures that are improbable or difficult to achieve, particularly based on our product and successes so far. We have a financing plan, but we also know that we can be successful without that. We know that the sooner we can get financing in, the faster we can grow into each of the new markets.
Loyalty goes both ways – they've believed in our product, they've driven our expansion. Those fans who are helping us spread the word out there should have the opportunity to invest in us – and Regulation Crowdfunding gives them that chance. We want them to be there along with us, enjoying the success that they are helping to create.
Crowdfunding is an ideal match for the social media reach we have, as well. Most companies don’t have the social media that we have. On Day One of a crowdfunding effort, we can reach millions of people who are potential investors, many of whom have already expressed an interest in investing. And we will use that to support our product sales and marketing worldwide as every investor is also a brand ambassador.
And, in many cases, the very people who want to invest in us are the people who own and run the venues where our products are being sold. They’re our ideal brand ambassadors, because there’s no better way to get their allegiance and their support for your product distribution than to have them on your team – so it works both ways. If they're investors into N1CE, they're going to push the product in the bars and venues they own.
We have a kind of three-tier structure for our main team right now. The first piece of that is our three part ownership team, which include EDM stars Sebastian Ingrosso, Axwell, and Alesso, who use their social media reach to really push the company forward. The second tier is the bartender of the year, Jimmy Dymott, who’s also a partner and makes all the recipes for our product.
Then, backing them is the third tier of the company: a professional team of skilled food and beverage product managers, marketing professionals, advertising sales and logistics experts and so on. All in all, we have not only the social reach and celebrity status, but also an unparalleled recipe quality, coming from one of the best in the business. Then, backing that, we have a full management team to get the job done.