New Zealand’s Little Island Creamery Goes Bust After 15 Years of Plant-Based Promise

What’s happened to New Zealand’s best-known coconut dream? And does this mark the end of the road for small-scale alt-dairy in New Zealand ?

It started with a coconut and a dream.

Source: Little Island - Non-dairy ice cream varieties

But 15 years after launching one of New Zealand’s most beloved plant-based brands, Little Island Creamery, the makers of dairy-free ice cream, “Nice Blocks,” and coconut milk so creamy it could convert a cow, has quietly entered liquidation. Appointed last Friday, June 13, joint liquidators Clive Bish and Ray Cox from Ecovis KGA are now steering the final chapters of a business that, just a few years ago, looked like a poster child for ethical, organic food innovation.

And if you’re asking: How the hell did we get here? - you’re not alone.

Little Island wasn’t a fringe player. They’d done the hard yards as early movers in non-dairy long before it was cool, funded by Snowball Effect, stocked in Woolworths, and supported by loyal customers who wanted to eat well and tread lightly. They paid a living wage, sourced Fairtrade ingredients, and built a brand with more heart than hype.

But even passion projects can’t outpace rising costs and margin pressure forever.

Behind the Instagram smiles and shelf-appeal was a slow financial freeze. Annual revenues of $7 million weren’t enough to carry a company caught in the squeeze between increasing imported raw material costs and a brutal retail environment demanding more for less. A funding round in 2023 gave them a short runway, but not enough lift.

Sure, global coconut products prices have spiked along with bad weather, logistical delays, and commodity speculation, have turned this once-cheap hero ingredient into a volatile liability. But that’s not the whole picture.

This is also about scale. About how hard it is for ethical SMEs to compete with global mega-brands now muscling into plant-based with bigger marketing budgets and deeper discounts. In 2010, Little Island was one of the few alt-dairy players in town. In 2025, the chiller aisle is crowded with multinational oat barons, soy giants, and low-carb everything.

Little Island didn’t lose its values. It lost the ability to compete on price in a category now obsessed with protein stats, TikTok buzz, and distribution muscle.

The liquidation notice is polite and procedural with creditors have until July 14 to make their claims. No bombshells. No tabloid headlines. Just the slow fizz of a once-vibrant brand being wound down.

And for the rest of the New Zealand plant-based community, this feels a little too close for comfort. If Little Island, a market leader, ethically led, well-loved, can’t make it through the storm, what does it say about the climate for alt-dairy startups trying to go mainstream?

Because, let’s be honest, the product was good. Really good. And that’s what makes this sting!

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