Perth-based sugar-free ice cream business Denada grows into massive success

When an ex-pastry chef got together with a former Hockeyroos pro-athlete and a friend who worked in brand marketing, a curious new product was born.

When pastry chef Charlotte Haygarth went sugar-free for a few months, she couldn’t turn back after seeing the positive effects.

Curious to figure out how she could continue making treats sans sugar, she got experimenting in the kitchen which led to an invention that was nowhere to be seen on the market.

She created a sugar-free ice cream from all natural ingredients that still tasted like ice cream, going beyond the high protein, low calorie ice creams that had recently hit supermarket freezers.

“As a pastry chef, I was curious about coming up with products and started exploring new recipes,” she said. “Halo Top had just entered the market but funnily enough there were no sugar-free options. There was low cal, high protein, but none were sugar free.”

The sugar-free ice cream creation came from experimentation in the kitchen after doing a sugar-free diet. Picture: Supplied

Denada was born in late 2017 when Charlotte shared her new recipe with her friend Jayde Taylor, a former Hockeyroos pro-athlete who had recently retired from professional hockey and was curious about the keto diet – and her next career move.

When Jayde was all in, Charlotte asked her old school friend Sophie Lawrence, who worked in brand communications, if she could come up with a way to market the ice cream.

Soon enough, the three realised they had an innovative product that could fill a gap in the market.

The Denada team were friends who came up with an innovative idea after experimentation in the kitchen. Picturre: Supplied

FROM $0 TO MILLIONS

In under three years, the trio have flipped the sugar-free ice cream category on its head, being the only all-natural sugar-free ice cream on the market.

In early 2018, Denada launched in a few local stores in Perth – starting with Peaches in South Fremantle – with a small manufacturer and “doing all the leg work” including running the distribution themselves.

With no business experience, Jayde said it was a learning process and confessed they “had no idea what we were doing”.

The business grew rapidly in the first year, despite investing $0 in marketing. “We went from eight stores in Feb in WA to 450 by September 2018 nationally,” Jayde said.

In the first year alone, they saw growth of more than 850 per cent, relying only on word-of-mouth and social media.

“It got to the point where it was too big,” Jayde said.

The trio bring it down to being “the right product at the right time” with a demand for sugar-free foods growing as Australians look for low-sugar options at the supermarket.

“The keto movement was taking off in Australia and the keto community are so active online,” Charlotte said.

“We’ve only just started going into the influencer marketing space – it’s another way to generate word-of-mouth and social sharing.”

They launched two new products at the end of 2020. Picture: Supplied

COLES CAME ‘OUT OF THE BLUE’

The Coles contract then landed “completely out of the blue” when they got a call from the major retailer during a business trip to Melbourne after picking up some independent stores in New South Wales and Victoria.

“Soph and I were in Melboure and we got a call from the buyer if we wanted to come in for a meeting. We thought, well we’re in Melbourne, we’ll come into the meeting. We thought they would roll us out in 20 select stores or something but they said, no, we want to roll you out in 95 per cent of stores – that’s 826 stores,” Charlotte explained.

“We said no problem!” the three laughed.

“We jumped on the phone to our manufacturer. It was quite good timing. It just so happened the timing worked really well.”

Denada launched in Coles with three flavours and then came out with two dairy-free vegan tubs. Since October 2020, there are now six flavours available in almost all of Coles supermarkets, including two new flavours launched at the end of 2020.

Charlotte said getting the packaging and branding right was crucial.

“I knew it was a matter of looking at packaging and seeing what we needed to do to stand out,” she said.

“The packaging worked its butt off for us,” she added.

“It takes a lot for someone to pick up a new product on the shelf. If the packaging is right, you’ve done half the job.”

When thinking up the brand name, they first landed on the Spanish word “nada” which means “nothing”, but the trademark was already taken. “We decided to change it to “denada” which was a blessing in disguise,” she said. The word means “you’re welcome” or “it’s nothing” in Spanish.

‘OVERWHELMED’ AND ‘SELLING OUT’

Just a couple of years into business, Denada had a 350 per cent increase in sales after the inital 850 per cent surge and then a 70 per cent year-on-year jump the following year.

“We have been overwhelmed with the feedback from our customers with many stockists selling out straight away,” Jayde said.

“The 2019-20 financial year was our strongest year yet with well over $3 million in sales and we’re on track to double sales in the next financial year,” Sophie told news.com.au.

In the nine months during COVID, from March to December 2020, the brand experienced an almost 200 per cent increase in sales, while sales growth year on year increased by 364 per cent.

“COVID boosted sales, not surprisingly as it is such an emotional food that is prime for the at home on the couch moment. In fact the whole ice cream category grew this year thanks to COVID,” she said.

“But despite contributing to strong sales, COVID did put a pause on some conversations and growth opportunities. So there was some negative impact to the business.”

Denada has played with global expansion, launching in the United Arab Emirites where they managed to sell out within weeks.

“It was a great test market for us to see how our product flew internationally. It’s been performing really well. We were sold out in three weeks with zero brand awareness with the packaging standing out on shelf and the gap in the market for low sugar product,” Sophie said.

“COVID has made it a bit hard with more international expansion in 2020 so we would like to expand in 2021,” she added.

ON TRACK TO SELL A MILLION TUBS

From October 2020, when the brand launched two new flavours, Denada is selling roughly 95,000 tubs a month. Prior to the new flavour launch it was roughly 43,000 a month.

“We’re on track to sell a million tubs by the end of February,” they said.

Coles sales alone are about to tick over $4 million, with the two new flavours supporting the sales across the country.

“Running a relatively lean business we have managed to achieve a healthy profit in year three of the business, considering we have a premium-priced but low-margin product,” she said.

While the tub of ice cream can go for around $12 or $13 – unless they’re on special at Coles – Sophie added that “all natural sugar-free ice cream is expensive to make”.

“People don’t understand how expensive it is to make,” she said. “It’s at a premium price because to make a delicious sugar-free ice cream it is really expensive. We’ve managed to get it at the same price as a tub of Ben and Jerry’s of the same size.”

But the pricepoint isn’t stopping customers from paying good money for the sugar-free product.

Launching with three flavours, they’ve expanded the range to six different varieties of sugar-free ice cream, including two plant-based, dairy-free options, after careful and innovative experimentation.

One of the coveted new flavours, Caramel Choc Flake – which took Charlotte months to perfect – sold out immediately.

Charlotte added that “ice cream is not the easiest product to make sugar-free“.

“It takes us months and months to develop new flavours and make sure they taste amazing but also stick to our core principles,” Charlotte said.

“Caramel is typically made from just one ingredient, sugar. We found it nearly impossible to make a sugar-free caramel flavour that actually tastes good so we are super proud of this release.”

Denada uses a natural sugar alcohol – xylitol – as a sweetener instead of blood-sugar spiking sugar.

“I landed on using xylitol. With ice cream, xylitol, we think, is the only option, whereas erythritol and stevia makes ice cream going icy.”

PLANS TO EXPAND

Denada is also in 450 independent stores as well as Coles nationally and they plan to keep expanding.

“We would love to expand because our growth will come from more people being able to access it,” Sophie said. “We would welcome the opportunity to go into another major national retailer but the timing has to be right.”

There are more Denada products in the pipeline as Charlotte experiments beyond ice cream.

“We would like to go into other distribution channels, like better-for-you snacks and treats,” she added.

“We’ve got two new product launches in 2021 planned and one of those will be out of the frozen space,” they revealed.

“We are excited about the potential that new products and expanding into different markets will have in 2021,” Sophie added.

With around 70 per cent of packaged foods in Australian supermarkets containing sugar, Denada’s mission is to create a sugar-free taste that’s delicious so that no added sugar becomes the new normal.

“We want to make people feel great by providing healthier, all natural sugar-free sweet treats and snacks. We truly believe we can help decrease sugar consumption without compromising on taste and texture, or going without,” Jayde said.