Innovation, Startups and Venture Capital in Iceland

Building a Food Startup from Iceland: Interview with Garðar Stefánsson, CEO of GoodGood

In the last several weeks, there’s been some interesting developments in the food startup scene. Not food-tech, but good ol’ product development, based on new ideas, branding, and lifestyle trends. GoodGood, a producer of non-sugar added sweet products, like chocolate spreads, raised $3m, and healthy snack company Responsible foods raised a seed round. In addition, last week, as part of the Covid response, the minister for agriculture and fisheries, announced plans for a 500m ISK Food Fund, to increase innovation in food production in Iceland. To dive deeper into the food-startup concept in Iceland, and discuss GoodGood, Northstack interviewed Garðar Stefánsson, the CEO of Good Good.

As usual, my questions are in bold, answers in italic in a box.

An interview við Garðar Stefánsson, CEO of Good Good

Let’s start with some context, a little bit about you. You’ve been in the food space for quite some time. Where were you previously, and how did you end up in this sector?

What can I say? I love food, I love the experience behind it, the story. Basically, I like everything about food. So, some time ago, when I was studying in Aarhus, Denmark, I started to develop a business idea and plan for a company I later founded, called Saltverk. Based on an idea from the 17th century of using geothermal heat as an energy source to evaporate sea water and turn it into salt. Later on I founded another salt company, Nordursalt, that is making light salt flakes, easier to break and doesn’t need a grinder to use.

I learned basically everything in those salt ventures.. How to start a company, market, sell, and it was absolutely one of the most valuable experiences and education I could ever have. These two companies are doing well today and I am happy to see how much impact they have had on the idea of salt and how consumers are embracing quality sustainable salt made in Iceland.

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Tell me about GoodGood. Where did the idea come from? What is GoodGood’s value proposition?

When I exited the salt business I was approached by GoodGood, then known as Via health. They asked me to assist them with restructuring the company and rebranding their concept. At that time Via Health was a small stevia drops production in Hafnarfjordur and was producing and selling natural sugar substitutes like stevia drops and erythritol tabletop sweeteners.

What fascinated me about their operations was the approach to eliminate sugar as a fixed ingredient and to become a part of the solution in finding ways to diminish sugar consumption by creating no-added sugar products.

Soon after I started I was offered to become the CEO of the company, which I gladly accepted. From that point onward, we decided to rebrand the company and future products as GoodGood – good taste & good for you.We decided to expand our no-added sugar free product portfolio. We sold the stevia drops production equipment to a co-packer in the Netherlands and started to create no-added sugar jams, chocolate spreads, syrups and just recently keto bars. Our focus is to brand, develop recipes and product ideas, and work with the best certified producers to produce our recipes and products.

Our value proposition is to offer a wide variety of sugar substitute products that are delicious and sweet, to for people to make the switch from sugary products to non-added sugar products easier. GoodGood, as a better-for-you-brand, is a stepping stone towards a healthier lifestyle.

What really makes the difference for a startup company like ours is that consumers are much more aware of what they eat and also much more informed about ingredients and nutritional labels. Lifestyles like the Keto-diet and the keto community, especially in the USA, has really made a difference and generated demand for Good Good products.

And how are you operating, as in, what is in Iceland and why, and what is elsewhere?

As the idea was born in Iceland we are headquartered here in Reykjavik. Iceland is a well situated country with great health aware consumers, so selling products in Iceland has been a great pilot on whether we should launch the product on bigger markets. In addition, at least pre-Covid19, Iceland is very well placed between our two biggest markets – North America and Europe, offering great flight routes to most major cities enabling us to take meetings.

Interesting. I’ve been somewhat skeptical of the whole food-startup concept originating from Iceland, due to the inherent disadvantages we have with regards to costs and location, and I don’t really see us scaling up production of fast moving consumer goods to support a real market with consumers in the millions. Sounds like this setup and approach is designed to overcome that? 

To be honest, Iceland is a food country. Since the country was first immigrated, one of our main exports has been food. Icelanders are exceptional in creating seafood and specialized agricultural products. However, as you clearly point out, we are a costly nation and located quite far from the main markets. That is why at Good Good we are working with manufacturers closer to the markets, to save on cost and lead time, while still developing and designing the products in Iceland with highly skilled personnel and product designers. Our business model is not too dissimilar from what many clothing companies, design furniture or tech hardware companies are doing. We design, develop, source and bring to market a great sugar free alternative, but we outsource our manufacturing, logistics and warehousing.

If we zoom out a little bit, and highlight the actual functions that you say are happening for GoodGood in Iceland, it might be applied to other industries as well. As you mentioned, tech,  hardware and furniture design, and possibly pharma and game development, for example. With more concept, research, development, and design functions happening here, fabrication and sales & marketing focused elsewhere. What do you think of that comparison?

I embrace that comparison. We choose to live in an open world. A world open for ideas and design, whereas focus should be on specialization, and cooperation between different cultures. We at Good Good are proud of our business set up, and our international network of both suppliers, service provides and clients. Already other industries have been building up similar systems as we have adopted. However, this is new in the food business and I believe we will see much more of similar business models as we have surface in the coming years.

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But let’s get back to the food business. I’m very interested to hear about the distribution deal. How does one get a distribution deal with a big distributor in the US?

First, it is about the product and the consumer experience. We at Good Good, make great products. Products that taste amazing, and do not have any added sugars. In addition, we are actually offering one small solution in trying to halt the spread of diabetes II and other lifestyle diseases. Second, you will need to have all the infrastructure already set up to be able to handle the orders from a big distributor, and third, a little bit of luck.

Also, it helped that from the beginning we bet on that food would become bigger in the online world, so we started to sell our brand on Amazon very early in the process.

That whole area fascinates me; the logistics and operations around fulfilling orders across multiple states or countries. And from my outsider view sounds like that is the way in? The distribution companies?

That is why we outsource that process. Just like we find the best chocolate spread producer, and the best jam producer, we only work with the best logistic brokers to make sure our shipments are received on time, without costing us a fortune.

What about marketing? GoodGood is focused on healthy but still sweet, what is your marketing focus? How do you cut through the noise and get to your consumers?

We work with great people, and part of our success is that from the beginning we have put loads of hours and design in creating our brand – GOOD GOOD. We’re working with a great agency called AtonJL who are also shareholders of Good Good.

In the noise of the market, we focus on working with communities, e.g. kKeto communities, people with diabetes and health and fitness enthusiasts. It is an ever-changing world and there are always new challenges that emerge. However, we have found that creating a product people love is the key of becoming noticed and talked about.

You can find more info on Good Good on their website or Amazon page.

Do you like Northstack?

Our coverage is made possible by the support of people who like you, through small monthly donations. Supporting Northstack will help us keep up the discussion, news, and analysis of Icelandic startups, tech, and venture capital.

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