The Meal Replacement Space Stays Hot 🔥

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CPG WIRE
November 07, 2023

Welcome back to This Week in CPG, folks. Here’s what we’re covering this morning:

  • Huel gobbles up more funding 💰

  • Boucheron buys jewelry atelier 💎

  • Element Eight closes round 📈

  • PRIME hits major milestone ⚡️

  • Celsius drops new line at 7-Eleven 🆕

Shout-out to Numeral for making e-commerce sales tax a breeze.

The Big Story 📰

Huel’s RTD meal solution.

UK-based meal replacement brand Huel secured backing from Morgan Stanley Investment Management (MSIM). Terms of the investment weren’t disclosed, but the source of the funding is 1GT, a climate-focused private equity division of Morgan Stanley.

Founded in 2015 by Julian Hearn, Huel has built a large, fast-growing business by making nutritionally complete food affordable, accessible, and convenient for consumers. Though their first product was a meal replacement powder — two scoops equals 29 grams of protein, 38 grams of carbohydrates, and 27 essential vitamins and minerals — they’ve since expanded into nutrition bars, instant meals, and ready-to-drink beverages.

The CEO of Huel, James McMaster, who previously served as an operations executive at Gü and Ella’s Kitchen, joined the firm two years after it launched. Together Hearn and McMaster bootstrapped Huel to £40M in annual revenue by 2018, before raising their first round of outside funding from Highland Europe at a £220M valuation.

Now Huel is worth an impressive $560M after delivering net sales of $175M in 2022, a year-over-year increase of 41%. In total, Huel has sold over 300 million meals across more than 100 different countries. According to McMaster, Huel has been so successful due to “a magical combination of nutrition and convenience.”

The meal replacement category has been surprisingly hot lately. In April, Nestlé acquired a 49% stake in yfood, a German meal replacement startup, at a $469M valuation, while Starco Brands purchased Soylent for an undisclosed sum in February.

Germany meal replacement brand yfood

The real loser in all of this is Soylent. Soylent was no doubt the first mover in the meal replacement space — they launched in 2013 — but by focusing on the human performance optimization weirdos instead of just busy consumers looking for healthy, on-the-go nutrition, they missed an enormous opportunity.

C’est la vie.

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Deals 💰

Mergers & Acquisitions 

  • Boucheron, the luxury jewelry brand that Kering acquired in 2000, purchased a high jewelry workshop that’s based in Paris. Terms of the acquisition weren’t disclosed, but the move will enable Boucheron to increase its production capacity. Kering

  • Another luxury giant, LVMH, acquired Los Angeles-based luxury eyewear brand Barton Perreira for $80M. The brand launched in 2007 and was founded by Bill Barton and Patty Perreira. Barton Perreira operates two stores in New York City along with three others in Aspen, Bozeman, and Kansas City. LVMH purchased another eyewear brand, Vuarnet, in September. WSJ

Fundraising

  • Luxury skincare brand Element Eight closed a $6M funding round. The company was coy about who participated, but said nearly half the funding came from surgeons, dermatologists, and scientists, while the remainder came from family offices. Element Eight is known for their proprietary oxygen carrier technology which supplies more oxygen to the skin and reduces signs of aging. They currently sell 5 SKUs which range from $175 to $325 per unit. WWD

  • Dreamfarm, an Italian producer of plant-based cheese products, secured €5M in pre-seed funding from food industry entrepreneurs Giampaolo Cagnin and Francesco Mutti. The funding will be used to expand distribution and for R&D. I’m into their packaging 🔽 TechCrunch 

What’s New 🤩

Apparel, Cosmetics, and Wellness

  • Pleasing, the beauty brand founded by Harry Styles, will launch its new fragrance line on November 16th. Three scents will be available: Closeness, Rivulets, and Bright, Hot. Huge fan of the packaging 🔽 Instagram

  • The Estee Lauder Companies and Indian beauty retailer NYKAA revealed the winners of BEAUTY&YOU, an awards program that celebrates the next generation of beauty brands and founders in India. Business Wire

  • Spanish luxury fashion house LOEWE collaborated with Kyoto-based ceramic studio Suna Fujita on a gorgeous holiday collection that features handbags, sunglasses, scarves, and other pieces. So fun 🔽 LOEWE 

Food, Beverage, and Alcohol

  • PRIME, the beverage juggernaut founded by Logan Paul and KSI, is giving away two solid gold bottles worth $500K each. More interestingly, they’re doing this giveaway to celebrate selling their ONE BILLIONTH bottle. An absolutely insane milestone for a brand that launched in January of 2022. Instagram 

  • Blue Bottle Coffee collaborated with Pocket’s Chocolates to launch Oat Milk Chocolate Almonds. A fun, unexpected collab 🔽 Instagram

  • Condiment king HEINZ launched a new product, Pickle Ketchup, at select retailers in the U.K. Pickle Ketchup will make its debut in the U.S. early next year. Business Wire

Data 🖥️

  • As mentioned above, PRIME is on the cusp of selling its ONE BILLIONTH bottle. Just incomprehensible growth for a brand that launched last January. Instagram 

  • Licor 43, a Spanish liqueur brand that’s owned by Zamora, is now a one million case brand. The Spirits Business

Distribution News 🚚