Huel profits surge as meal replacement maker broadens fan base

Meal replacement company Huel has reported a surge in profits as its customer base grows beyond the time-pressed tech bros of the UK brand’s early years and expands its product range into chewable food.

Huel’s pre-tax profit for the year to July 31 almost tripled compared with the year before, rising 194 per cent to £13.8mn on the back of its rapid rollout into supermarkets and the move into new categories. Revenues grew 16 per cent to £214mn.

The company, which makes “complete food” powders and now snack bars and meals out of a blend of plant-based ingredients fortified with vitamins, first sold its powder online to its cult-like following of mainly men looking to nourish themselves as efficiently as possible.

“Nutrition, unfortunately, is actually quite complicated. We try to make it simple for people,” said chief executive James McMaster.

Bombarded with information about what they should and should not eat, consumers are becoming increasingly health-conscious. McMaster said people chose Huel so they did not have to worry.

Today’s Huel consumers, known on social media as “Hueligans”, include a broader constituency of urban professionals, parents with young children and GLP-1 weight-loss drug users, McMaster said, thanks to the brand’s pivot from selling only from its website to distributing in supermarkets.

Huel first launched products in supermarkets in the UK in 2019, and is now available in 25,650 stores globally, more than double the 11,250 last year.

The company has also opened its own manufacturing site in Milton Keynes. Floor-to-ceiling storage units are draped with giant posters of Huel products, and even the warehouse carts are in Huel’s black and white brand colours.

“Around 70 per cent of all UK supermarkets have a Huel product in them,” said McMaster. UK shoppers can now even pick up a Huel drink as part of their Sainsbury’s meal deal, at a premium, he said.

Huel has extended its range to include “hot and savoury” meals, such as pasta bolognese and curries that are prepared by consumers using boiling water, through its direct-to-consumer channels. It also sells snack bars.

“It widens our ability in the future to go into more markets . . . where maybe it’s less about the pace of life and more about a need for great nutrition,” McMaster said.

While people in convenience-driven markets such as the UK and US spend half as much time preparing food as the previous generation, he said, other markets might prefer a hot meal.

Once consumed almost exclusively by men, Huel is growing in popularity among women, McMaster said, thanks to the more accessible, ready-to-drink bottles. Huel’s original form, a powder that needs to be mixed with water, holds similar associations to protein powders popular with weightlifters, he said, and was less popular with women.

The growing use of anti-obesity drugs has also driven demand as doctors advise users of GLP-1 drugs such as Ozempic to ensure they eat enough protein, vitamins and minerals. “We get people increasingly coming to us saying, ‘I need Huel in my diet after GLP-1’ . . . generally you want to eat less, and what you do eat needs to be more nutritious,” he said of patients.

The Financial Times reported in 2021 that Huel was exploring an initial public offering but the company has since shelved the plans.

“We’re in a different phase now, we’re cash generative, self-funding, so [an IPO is] not on our radar in the same way . . . we don’t need to do anything from a fundraising point of view,” McMaster said, adding that the company had “long-term committed shareholders”.

Huel’s largest shareholders are founder Julian Hearn, venture capital firm Highland Europe and Morgan Stanley, which invested in November 2023 through its climate-focused private equity fund 1GT.

Other backers include actor Idris Elba and his wife, presenter Jonathan Ross and entrepreneur Steven Bartlett, who is also a board member. In August the Advertising Standards Authority banned a number of Huel ads featuring Bartlett for not disclosing their commercial relationship.

McMaster would not confirm if the company, which was valued at £440mn in 2022, was open to an approach from a multinational group, saying he was focused on expanding the business. “At some stage there’ll be some kind of change but I see that as quite far into the future,” he said.

Earnings before interest, tax, depreciation and amortisation grew 86 per cent in the year to July to £18.2mn, as gross margins rose 2 percentage points to 59 per cent.

One consultant who has worked with Huel said multinational consumer goods companies were looking for brands they could scale internationally. “The fact that it has expanded in several countries does increase the appeal to a major player,” they said.

Huel was not a natural fit for food companies with a focus on taste and experience, the consultant added, whereas groups with vitamins and supplements brands, or with medical nutrition businesses, may be interested.

McMaster said he starts his day with the Black Edition powder, which has extra protein, blended with water, followed by a Huel bar mid-morning, a Huel meal pot or two at lunchtime, and a Black Edition ready-to-drink bottle and another bar in the afternoon. In the evening he eats a “traditional” meal.