08/12/2011 11:20 am ET | Updated Oct 11, 2011

Nice Cream, Kris Swanberg's Handmade Ice Cream Company, In Peril Over Dairy Regulations

In many ways, Nice Cream is the quintessential small-business success story. Laid off from her job with the Chicago Public Schools, Kris Swanberg decided to try her hand at artisanal ice-cream making. Using hand-picked fruits, organic local milk, and a certain culinary genius, Swanberg started making tiny batches of inspired flavors, which she started selling at the small, independently-owned Green Grocer on Chicago’s Near West Side in October of 2008.

Less than three years later, at the beginning of this summer, she was selling flavors like chocolate basil and blueberry pie (with local handmade pies, crust and all, smashed into vanilla ice cream) at a number of independent grocers, and three Whole Foods locations around the city.

And she was preparing to scale it up, too: Swanberg had ordered all-new packaging, complete with nutritional information and bar codes, so her flavors could be sold at more Whole Foods and other, bigger groceries.

But as she took her ice cream to the new Whole Foods stores, she started seeing a problem. The stores were ready to buy her product, but something in the computer system was keeping them from making the order.

That something turned out to be a state-created bureaucratic nightmare that has put the company’s entire future in jeopardy.

The state of Illinois had red-flagged the company with Whole Foods because, as it turns out, the company didn’t have a “dairy license.”

According to a story in the Chicago Tribune, “Swanberg and others in her field had operated for years now without ever hearing of such a thing and, indeed, they say, the City’s Department of Business Affairs and Consumer Protection, to whom they applied for business licenses, never informed them they would need one to operate.”

The license, which is intended to regulate mega-dairy producers, would require vast changes from Nice Cream. For one, it would have to leave the Logan Square Kitchen, the pioneering collective-kitchen space run by Zina Murray, which itself had to fight for years against city red-tape just to stay open.

It'd probably have to stop using ingredients like fresh strawberries, which can’t pass state-level bacteria tests unless they’re scrubbed so vigorously as to fall apart. The Illinois Department of Public Health suggested strawberry syrup instead.

And perhaps most onerous is the requirement that the company use a mechanical pasteurizer, a device that Swanberg says might cost up to $40,000.

“We already pasteurize our ice cream,” an exasperated Swanberg told The Huffington Post. In fact, it’s essentially pasteurized twice: the milk and cream from Organic Valley, a co-op of small, Midwestern organic dairies, sells its products already pasteurized. Then, in the ice cream-making process, the dairy is raised to the requisite temperatures and held at that heat for long enough to kill off any harmful bacteria — exactly how ice cream was pasteurized before the advent of big expensive machines.

“The state has not done any tests, there are no reports,” Swanberg said. “We’ve been making this ice cream for three years. No one’s gotten sick. There’s no way of saying our product is in any way unsafe.”

Illinois won’t recognize their process, though, which could necessitate that Swanberg buy the pasteurization device.

At the moment, she’s reeling, and understandably so. Her first priority, she says, is to keep the company afloat: they’ve been forced to completely stop producing ice cream, so they’re selling through the last of their inventory to keep paying rent and salaries. Swanberg’s holding an event to raise some money for the cause later in the month.

She’s also "already working full-time” on trying to get the regulations changed. One possible model is that of SB840, the Illinois Local Food Entrepreneur and Cottage Food Operation Act. That law loosened regulations on small-scale food producers to allow entrepreneurs to operate free of some of the restrictions designed for Big Food. It doesn’t cover dairy, but similar legislation could go through for that industry.

One possible ally in the legislature is Representative Deb Mell, who posted a link on her Facebook page to the company's website. “Help a local company stay alive,” she wrote on her page after seeing the Tribune article.

When The Huffington Post spoke with her about it, she revealed a little-known biographical fact. “I have a little background in making ice cream myself,” Mell said. “I was a pastry chef in San Francisco, and Ice cream was my specialty, so it’s near and dear to my heart.

“But also, I was thinking about how we get in the way of small businesses,” Mell said. “In this economy, we should make it easier for people to operate, not harder.”

She hadn’t thoroughly looked into the legislative options, she said, but she was hoping to “send people their way” in the meantime to help keep Nice Cream afloat.

The one problem with legislative changes: they take time. SB840 took six months to get through the legislature. And with ice cream season ending soon, and production still grounded, time may not be on Swanberg’s side.

Nice Cream is hosting a fundraiser to stay in business at Revolution Brewing, 2323 N. Milwaukee, on Sunday, August 28. For more details, and to buy tickets to the event, click here.