Dive Brief:
- Sugar reduction company DouxMatok closed a $30 million Series C funding round and is rebranding to Incredo LTD. The Israeli company makes Incredo Sugar, a sugar-based sweetener that allows for 30% to 50% sugar reduction.
- The investment round was led by DSM Venturing and Sienna Venture Capital. Other investors include Teseo Capital — an investment fund managed by the Ferrero family. Unrelated to the investment, Incredo announced a joint development agreement with Ferrero to create products with the sweetener.
- As more consumers are looking to cut down on their sugar intake, companies like Incredo see many opportunities. Unlike other sweeteners, Incredo is made from sugar, so the taste, sweetness profile, mouthfeel and browning performance are what consumers expect.
Dive Insight:
The company now known as Incredo LTD has spent years working toward bringing its sugar replacement to manufacturers. The company plans to use this latest round of funding to spread the sweetener’s use to a wider global audience.
The Series C round nearly doubles Incredo’s funding to date, bringing its lifetime total to just above $60 million, according to figures on Crunchbase. The company says it will use the funds to invest in R&D and accelerate commercial partnerships.
The partnership with Ferrero announced along with this fundraising could be the company’s most transformative. Not many details were provided on the agreement between the two companies, but Ferrero is a global behemoth.
According to 2021 statistics from Candy Industry, Ferrero is the world’s second largest confectionery company, with $13.6 billion in global sales. While the company and its brands have been European sweets staples for generations, it’s made a huge push into the United States in recent years — both with legacy items and new acquisitions. Ferrero bought the U.S. candy brands formerly owned by Nestlé and the cookie brands formerly owned by Kellogg. It’s also announced an agreement to buy ice cream maker Wells Enterprises.
A joint development agreement with Ferrero will give Incredo a chance to show off what its sweetener can do in a wide variety of applications. The company says Incredo Sugar works in most applications, but not liquid. The company adds a carrier compound to ordinary sugar, which creates a cluster of the sweetener. The sugar clusters linger on the tongue, optimizing flavor — and ensuring the consumer tastes all of the sugar they eat, Incredo says.
It may not be too much of a stretch to formulate Ferrero’s well known products using Incredo Sugar. Incredo’s first U.S. product, Incredo Spreads, included a low-sugar hazelnut cocoa spread — much like Ferrero’s signature Nutella. This 2021 limited launch, intended more to show the U.S. market what Incredo Sugar could do, had a similar taste profile to Ferrero’s classic — but about half of the sugar and seven times the fiber.
Ferrero isn’t the only big partnership Incredo has so far. Last year, Incredo announced a partnership with Blommer Chocolate Company, which makes chocolate and confectionery ingredients using the sugar-reducing sweetener. Incredo also partnered with ingredient company Batory Foods, which made Incredo Sugar available to manufacturers last year. In 2021, Incredo partnered with Italy’s Hi-Food to create a suite of sugar reduction solutions.
