Meal replacement brand Huel has bounced back into profitability as its deepening push into retail bolstered the DTC pioneer’s customer base.

The plant-based specialist saw overall revenues for its year to 31 July 2023 jump 28% to £184.5m, helped by a growing presence in grocery retail and continued growth of its core DTC operation.

Huel first launched retail products in the UK in 2019 and has grown to approximately 50% of its business on a weighted distribution basis, with its products now in 11,250 stores worldwide.

“A couple of years ago, we didn’t really consider retail to be a proper channel for us, but now we’re really flying from a retail point of view,” CEO James McMaster told The Grocer. “We’re easily the market leader by any definition of the ready-to-drink meal category and we’ve got more retailers coming on board giving us more space for more flavours in more stores, including the convenience channel.”

The brand’s core DTC operations have also continued to grow despite the wider post-Covid slowdown in the online food subscription space, with active online customers up by 8% to 988k.

“Unlike some other companies who jumped on the tailwinds of Covid, we have a model that’s structurally sound for direct to consumer, with big basket sizes that allows us to offer them free delivery,” McMaster said. “We’re in a really great place with the omnichannel model.”

UK revenues were up 30% to £93.8m, but the brand has also seen rapid international growth, particularly in the US which was also up 30% to £58.1m, with ambitions for further growth via expansion into retail.

Strong top line growth helped bolster the bottom line, to move to a positive adjusted EBITDA of £9.8m from a loss of £1.1m last year, while pre-tax profits hit £4.7m from a £10.6m loss.

McMaster said the previous year’s loss reflecting sharply elevated costs, while Huel had not raised prices to mitigate these inputs since December 2021.

“We had a harder time in 2021 and 2022 with all those costs increases that everyone experienced, but freight costs normalising more recently coupled with the scale that we now have has helped us flip back into profit mode,” he said.

Huel had previously discussed moving towards a potential IPO, but McMaster played down the likelihood of any imminent funding event.

“Obviously the public markets aren’t the best for any IPO at the moment, but we’re much more focused on growing internationally and widening our range.”

“From a financial point of view, we’re in a place now where we don’t actually need to be raising any money to fulfil our next stage in the in the growth process. So at the moment it’s not a big focus for us.”

In November the group announced a £20m investment round led by existing investor Highland Europe and brought on board Grace Beverley and Idris and Sabrina Elba as investors and advisors.

The investment will fund greater efficiency and flexibility in its manufacturing process with its first factory, based in Milton Keynes, set to open Summer 2024.

In total the brand has sold over 300 million cumulative meals sold to customers in over 80 countries around the world since launch in 2015.