Idris Elba and Huel CEO James McMaster

Plant-based meal replacement brand Huel has raised a further $24m (£19.9m) to underpin its global growth plans, counting some high-profile celebrities among its new financial backers.

The funding round, its second having raised £20m back in 2018, was led by existing major investor Highland Europe and values the brand at $560m (£464m) up from $260m in its last fundraising four years ago.

The latest round has also seen the brand backed by actor and UN goodwill ambassador Idris Elba and his wife Sabrina Dhowre Elba, TV host Jonathan Ross and sustainable activewear brand Tala’s CEO Grace Beverley.

Idris and Sabrina Elba will partner with the brand to bolster its existing commitment to tackling poor nutrition and sustainable farming. They will also work with the supplier on its climate change initiative ‘eat for 1.5 degrees’ to promote diets aligned with limiting global warming to 1.5°C.

The funding itself will be used to support global expansion, with a particular focus on the US market, which has become its second-largest since launching in the country in 2017. More than 50% of group sales are now international.

CEO James McMaster said the group currently had a team of 25 based in New York and was planning to launch new US-specific products in February to capitalise on its growth there, as well as increased consumer focus on health and wellness post-Covid.

The investment will also underpin new product innovation, and its continued expansion into retail stores in addition to its core online DTC channel.

Latest sales figures from the brand show it has grown revenues 40% in the year to the end of July 2022 to $170m (£140m).

Huel said growth had been driven by new customer acquisition, product launches and expansion into physical retailers.

“Widening our range from initially just doing powdered products has definitely attracted a wider group of people who are more interested in healthy eating in general,” McMaster said.

“So we’ll keep launching new ranges to make the brand more accessible to lots of people as well as widening our channel penetration where we can.”

Although the brand has no current plans to expand its physical retail category presence beyond its current focus on its ready-to-drink range, McMaster said he saw significant expansion opportunities in UK grocery.

“Our RTD retail sales were probably hindered during Covid, but being available in a more impulse-type environment and where the majority of food and drink is bought makes sense for us,” he says.

“Looking at the data in the last year, we’re back to flying in UK retail so we see a big future for the brand as an omnichannel brand rather than just online.”

The brand has sold over 270 million meals worldwide since its inception in 2015.

Notably, Huel has resisted raising its prices this year, despite soaring wider inflation – with its entry price-point for meals remaining at £1.50.

“It’s been really challenging over the past one or two years dealing with rapidly increasing ingredients, packaging, logistics costs and we’ve been fighting hard to find ways to avoid passing those costs on to our customers,” he explained.

“You have to balance keeping prices low against being a sustainable long-term business, so we’re trying hard to be more thoughtful about how we think about margins and costs and how to limit increases where we can.”

He said the group had, to some extent, mitigated input cost increases through efficiencies in logistics and freight, manufacturing and how the group buys its ingredients, but acknowledged this “ongoing battle” meant it could not rule out having to take action on price.

On its future expansion plans he noted: “One of the challenges we’ve got as brand is actually deciding what not to do – for us, we’ve got international expansion, product expansion and channel expansion, so there are massive global opportunities out there, but currently we’ll keep focusing on our core UK and US markets and building the product range and growing our customer bases in those places.”

Commenting on his investment into the brand, Idris Elba said: “I’ve been a Hueligan for several years now, starting my journey while preparing for my role in Thor, so to come on board with Huel was an easy decision. I believe in their mission to deliver nutritionally complete food, sustainably.

“We have some exciting projects coming up and I look forward to spreading the message and raising awareness around healthy, low-carbon food.”

McMaster added: “Highland Europe have been a strong backer for our business in the last four years and we’re delighted about the extra support from Idris, Sabrina, Grace and Jonathan. Our investors have all expressed their belief for what we are trying to achieve at Huel – making nutritionally complete, convenient, affordable food, with minimal impact on animals and the environment.

“We are trying to change the way the world thinks about food and Huel offers a solution to help people make easy changes to their food choices. We’re excited to have the opportunity to work with Idris and Sabrina to raise awareness of the role of food in climate change, and to encourage individuals and the industry in general to move towards a food system based on sustainable nutrition”

Last year the brand, which welcomed Dragons’ Den’s Steven Bartlett to its board in early 2021, hired investment banks Goldman Sachs and JP Morgan to explore a possible float or other external investment.

However, McMaster said there were no plans to pursue more external funding at the current time and an IPO was “not something on the cards”.