A Bucks County-headquartered craft ice startup is projecting growth by a factor of 40 next year as it undergoes rapid expansion, including into Canada. Aiding that growth, Langhorne-based Lux Ice plans to open a new facility in Dallas in the first quarter of 2023 before expanding to additional locations in 2024 in a set of moves company Founder and CEO Shawn Kilcoyne hopes will one day make the brand “ubiquitous with craft cocktail ice around the world.”
Kilcoyne knows a thing or two about ice – or the frozen foods industry, anyway. He and his brother Dan founded cryogenically frozen ice cream brand Mini Melts roughly 20 years ago.
After exiting the company several years back, Kilcoyne was looking for his next endeavor. Trip after trip to grocery and convenience stores, he saw the nondescript ice coolers and thought there was a chance to create a brand. The idea was further stoked when he and his wife, Noelle, would go to a cocktail bar in New York near where she worked as a nursing analyst at the time.
There, he saw a bartender hand carving ice for a drink. The concept was cool, but inefficient. “I said, I bet I can develop a way to mass produce this product,” he recalled.
That’s what he set about doing, launching Lux Ice in 2020, the same year it went to market. His wife and their son, James, have also been involved from day one. Originally looking to focus on the food services industry, Kilcoyne made the decision to shift focus to consumers when the Covid-19 pandemic struck.
Lux Ice quickly landed at Wegmans and has rapidly expanded since. By the first quarter of 2023, Kilcoyne expects Lux Ice to be available in some 10,000 locations across the U.S. That includes a vast array of grocery stores – such as the Fresh Market, Giant, Kroger, Market Basket, Big Y, Roche Bros. and Hy-Vee, as well as independent and chain liquor retailers like Total Wine and More.
It is also available on delivery services such as Gopuff, Drizly, and Instacart. On the latter, the brand has experienced 3,500% year-over-year growth, Kilcoyne said.
Driving its retail success is brokerage and distribution partnerships including with Crossmark, Hood, RDD Associates and Arctic Glacier. To help create brand awareness, Lux Ice has also worked with TikTok influencer Johnny Drinks.
To rapidly create its ice spheres – which measure 2.36 inches, or roughly the size of a pool ball – the company developed a proprietary method using some automation. A sphere can last for up to an hour in a drink depending on room temperature.
Lux Ice comes in packages of six at present. Kilcoyne said consumers are buying multiple bags, indicating that they’re taking the spheres to a party or entertaining at home. The average purchase size is eight bags. A bag sells for $6.89 on Instacart via Wegmans, for example.
The brand differentiates itself by using water that is NSF-approved and food safe. The water is ionically filtered, removing common additives.
Lux Ice has a deep bench of talent backing it. At the onset, Kilcoyne tapped his longtime friend and IBM alum Jim Lannigan, who he attended Father Judge High School in Philadelphia with. Todd Piatnik, a former PepsiCo executive in innovation, came on as a main investor early on. Kilcoyne knew Piatnik from his time at Mini Melts. Piatnik was president of Fastcorp, which supplied their vending machines.
Through Piatnik, the doors opened for other PepsiCo alums to join, including Lux Ice CFO Mark Rogers, a former longtime vice president at Frito-Lay who came aboard as a “main angel investor,” Kilcoyne said. More recently, Vince Bush joined the team. Bush was a longtime engineer at Frito-Lay – a division of PepsiCo – where he worked on manufacturing, research and development.
Bush came on as part of Lux Ice’s recent Series A. Kilcoyne declined to disclose the amount raised but said it was oversubscribed and exceeded the “max end” – that figure is just over $2 million, according to earlier documents filed with the Securities and Exchange Commission in October – for “millions on top of that.”
Kilcoyne said the intellectual capital and industry experience is just as, if not more important, than the funding.
“They're investing and they're investing their time,” he said.
The round, Kilcoyne added, closed in under 30 days. Between it being oversubscribed and investor interest, Lux Ice is now considering another round.
The funds will be going, in part, toward a planned new facility in Dallas which will span roughly 30,000 square feet and be a general footprint for what the company’s future facilities will look like. It will add around 50 jobs to the company’s current 30 employees.
The new facility is also a massive expansion on its current 5,000 square feet of space in Morrisville. Lux Ice launched at incubator Cherry Street Kitchen in Trenton, New Jersey, before moving operations across the river, where Kilcoyne said they have outgrown the space.
The Dallas expansion – expected to come online in the first quarter of 2023 – will increase the company’s production capacity by a factor of 20. They also expect the facility to grow its run rate by about 40 times by the end of 2023 compared with this year.
Following that, Lux Ice will look to establish facilities on the East and West coasts in 2024.
The long-term goal is to expand the brand internationally through licensing. “We have plans to go into all the other major countries through licensing arrangements,” Kilcoyne said.
It’s first taste of the international market will come in Canada, where they’re working with Marsham on distribution. They expect to enter the market by the second quarter.
Lux Ice is also turning its attention back to the food services industry now that Covid restrictions are gone, with a goal of distributing to restaurants, bars and country clubs.
“That, we believe, is going to outpace the entirety of our other two channels [of grocery and liquor stores],” Kilcoyne said.
Stadiums and arenas are also on their radar.
“Stadiums present a unique and very large opportunity, because it's all experiential,” he said of consumer demand for elevated experiences when they go out, something he believes aligns with the mission of Lux Ice. “We're already talking with Aramark.”
Headquartered in Philadelphia, the Fortune 500 Aramark works with the likes of the Phillies’ Citizens Bank Park, Fenway Park in Boston, Citi Field in New York, and PNC Park in Pittsburgh.
“It just surprises me every day, quite frankly, how much this has taken off in such a short period of time," Kilcoyne said. "It really is amazing."
