[Edaily Marketin Reporter YunJi Kim ] A British small-to-medium-sized enterprise (SME) that manufactures meal-replacement powders to be mixed with water is being sold for over 1.6 trillion won. This reflects the high growth potential of the complete nutrition market, which is expanding rapidly, as assessed by global food companies. Meanwhile, large food companies facing low growth are increasingly turning to mergers and acquisitions (M&A) to secure new business opportunities, such as high-protein and functional nutritional products.

According to industry sources on the 21st, the UK Competition and Markets Authority (CMA) recently concluded its review of the merger involving French food company Danone’s acquisition of Huel. Danone signed the final agreement to acquire Huel last March. Although the specific purchase price has not been disclosed, the market estimates the transaction value at approximately 1 billion euros (about 1.6 trillion won).

Huel is a meal-replacement company founded in the UK in 2015. Starting with powdered products mixed with water, it expanded its product lineup to include ready-to-drink beverages and protein bars. By highlighting that its products provide all the nutrients needed for a single meal—including protein, carbohydrates, fat, fiber, and vitamins—in one serving, the company expanded its market beyond the UK to Europe and the United States.

The company also rapidly expanded its scale by leveraging a loyal customer base. After securing customers primarily through direct-to-consumer (D2C) online sales, it broadened its sales network to include major retailers, driving 2024 revenue to approximately 214 million pounds (about 404 billion won). The growth was further supported by an increase in repeat customers, particularly in the UK and the U.S.

Danone’s decision to acquire Huel for over 1 trillion won is rooted in the growth potential of the functional nutrition market. As consumers increasingly prioritize nutritional components such as protein and fiber over products that merely serve as a meal replacement, this market is expanding rapidly. For established food companies, acquiring a firm that has already secured a foothold in the market is a faster way to enter the market than building a brand from scratch.

Danone also took note of the fact that Huel rapidly secured a customer base through its online presence. Unlike traditional food companies, which have grown primarily through large retail chains, Huel built its brand through direct-to-consumer (D2C) channels before expanding its sales channels to offline retail. Danone plans to combine Huel’s brand and customer base with its own production and research and development (R&D) capabilities and global distribution network to expand its business, primarily in the U.S. and Europe. Through this acquisition, Danone has strengthened its portfolio of functional nutritional products while also securing online sales capabilities.

Meanwhile, capital market analysts predict that competition to secure health and nutrition brands with proven growth potential in the global food industry will intensify. An industry official stated, “Since it takes time to develop in-house products, companies are increasingly entering the market by acquiring brands that already have a loyal customer base and established sales channels,” adding, “Food startups that have grown rapidly through online channels are emerging as key M&A targets because they allow established major food companies to simultaneously secure a young consumer base—an area where these giants are relatively weak—and digital sales capabilities.”