Huel: No rush for IPO as meal replacement drinks biz passes £100m revenue
The CEO of start-up Huel has said its £1.50 meal replacement drinks offer struggling households affordable nutrition as inflation skyrockets.
“We feel we can support [people in the cost of living crunch,] given our products start at £1.50 a meal,” CEO James McMaster told CityA.M.
Households are facing sharp grocery bill increases this spring, as major retailers hike prices in order to offset their own spiralling costs.
The former Gü and Ella’s Kitchen executive explained: “We see food as two choices, entertainment food and healthy meals. Most people are having too much entertainment food with poor health choices, which is why [in the UK] we have the highest level of obesity ever.
“People are happy to go out to restaurants and get takeaway delivered which is relatively expensive, but people will need to think about more affordable choices that give better nutrition.”
McMaster said the country’s food system was “unsustainable,” with high food waste levels and widespread rates of undernourishment.
While the company has only hiked its prices twice in six and a half years, McMaster said the firm was reviewing pricing “on a daily basis.”
The company, which launched its first powdered drink in 2015, has hit £103m revenue, it said in results for the 12 months to 31 July 2021.
Although the company has hired Goldman Sachs and JP Morgan to advise on a potential London listing, McMaster said there was “no rush” on an IPO.
“We don’t have a specific course on where to head,” he added, pointing to past offers from potential buyers and investors.
UK sales were up 45 per cent as the easing of Covid measures led to more shoppers searching for convenient meals to fit into their busy schedules, the company said on Wednesday.
“We did see an initial dip in lockdown, but we did see it come back [when measures were eased,” McMaster added.
“If anything, consumer behaviour [during the pandemic] has given us more confidence,” he said.
The company had seen strong customer retention in lockdowns and consumers switching to plant-based lifestyles due to a renewed focus on health after the pandemic, the CEO added.