Dive Brief:
- Plant-based meal replacement company Huel closed a $24 million investment round led by previous investor Highland Europe. Actor Idris Elba and his wife Sabrina, as well as British TV host Jonathan Ross and CEO of activewear brand TALA Grace Beverley, also participated.
- Huel plans to use the funds to continue innovation and further its expansion into the United States — the U.K.-based brand’s second largest market — and other countries. The investment boosts Huel’s total valuation to $560 million.
- The funding comes as consumers are turning to Huel and similar brands for convenient, high-nutrition meal solutions, seeing them more as options for regular people.
Dive Insight:
This funding round caps off a year of growth for Huel. The company says it had $170 million in revenues in the fiscal year ending in July — 40% more than the previous year. Growth came from new customers, new product launches and further expansion into retail stores.
According to Huel, the brand has sold more than 270 million meals worldwide since its founding in 2015. Half of that is outside of its home country.
Huel always has positioned itself as an inexpensive, convenient and healthy alternative to food. In the last year, the company has dug into all those qualities. Lee Boakes, Huel’s head of new product development and innovation, told NutraIngredients this summer that the company is working to discover where consumers’ convenient nutritional needs are unmet, and is working to bolster its products’ nutritional credentials. And as pandemic-related shutdowns have ended and people are getting back to more active lifestyles, some consumers have found swapping meals for Huel saves time.
As sustainability concerns have increased, Huel also raised its profile as a planet-friendly option. The company has committed to 100% recyclable packaging by 2025 — and its current bottles have 51% recycled material. Huel also has worked to decrease its total carbon footprint through its supply chain, using renewable energy and strategically placing its distribution centers to reach more consumers with less travel.
Idris and Sabrina Elba will use their star power to further Huel’s sustainability message and commitment, the company said in a statement about the funding round. The brand will partner with the couple “to support healthy, low-carbon footprint diets, as well as agricultural development in Sierra Leone – Idris’ father’s native country,” the release said.
The expansion of Huel — both through this funding round and increased valuation, as well as its rise in year-over-year revenues — is a direct result of a softening of consumer perception of the category. As meal replacement brands were first introduced about a decade ago, they often positioned themselves as the end of food as society knew it. Many consumers were not willing to consider replacing everything they ate with a beverage or a bar.
As time passed, more consumers saw the category as Huel presents it — convenient and nutritious products to fill the gaps of a busy lifestyle. Celebrity backing and more expansions can help the category continue to grow.
