Key insights
- Danone's acquisition of Huel signals a shift in the food industry towards health-focused nutrition, driven by changing consumer preferences and the rise of weight-loss drugs like GLP-1s. While the immediate impact is limited, the trend suggests potential headwinds for traditional food companies and opportunities for those adapting to healthier alternatives. This could lead to shifts in investment within the consumer staples sector.
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French food and beverage maker Danone said Monday it's set to buy protein drinks maker Huel as a more health-conscious younger generation and the rise of weight-loss drugs pushes companies to rethink what people want to consume.
Huel sells a range of protein shakes and drinks fortified with nutrients. It's backed by celebrities such as The Diary of a CEO podcast host Steven Bartlett and actor Idris Elba.
Combining Huel's range and digital capabilities with Danone's global reach and nutritional expertise is an opportunity in "the new and fast-growing nutritionally complete space," said Danone CEO Antoine de Saint-Affrique in a statement.
"Most people don't get enough protein, fibre, or the right nutrients," added Huel CEO James McMaster. "That's the problem Huel exists to solve."
The deal, which is subject to regulatory approvals, is about 1 billion euros ($1.15 billion), the Financial Times reported, citing a person close to the company. Danone declined to comment on the value of the transaction.
Danone CEO De Saint-Affrique told CNBC's Charlotte Reed in 2024 that its portfolio, which includes yoghurts and water, was "extremely complementary" to growing health awareness and the use of GLP-1 drugs. Danone also makes specialized nutrition and baby milk, with key brands such as Activia yoghurts, Alpro plant-based milk and infant formula Aptamil.
Food makers are already starting to adapt to emerging trends through portion control, tweaking recipes and offering more premium products, which is only likely to accelerate as adoption of GLP-1s rises, according to analysts at ING.
The impact of these drugs is still limited in Europe, with around 2% of the adult population currently using them, ING said in a note to clients on Friday, "but that number will grow."
"Food makers face a gradual demand shift, giving them time to respond by changing products and marketing and investing in markets with less GLP-1 use."
Estimates vary on the size of the future global market for GLP-1 drugs, with ING expecting the market to reach $100 billion in 2027.