My part of a university group report
My part of a university group report
My part of a university group report
Applied Strategic Marketing
February 2025
Huel-YO
Calculating sales projections and market size of Huel's new market and product*
* this is just for fun- there is no affiliation to Huel
The New Market
65% of over 50+ British citizens are wellness enthusiasts (Euromonitor International, 2024), that seek convenient protein based products to maintain muscle mass and overall vitality (Brock, 2024). They seek products that fit easily into their routines, preferring:
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natural ingredients
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low sugar
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minimal processing
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with a strong preference for:
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low-sodium (78%)
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high-fiber (68%)
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omega-3-rich (61%)
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Current Product Offering Issues
The primary challenges with Huel’s current offerings revolve around digestive health and consumer fatigue.
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New customers struggle with the high-protein content, leading to digestive distress (FireMutt, 2022)
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Long-term customers report difficulty transitioning back to solid foods (Ibid).
Common side effects, as reported by Foster (2023) include:
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nausea,
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bloating
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acid reflux
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prolonged use is said to cause gut microbiome disruption (Sante, 2023)
Addressing these concerns is critical to enhance customer satisfaction and long-term retention.
New Product
Demand for plant-based yoghurts with no added sugars nor secret ingredients is increasing sharply in the UK (DairyReporter.com, 2024a). Many brands have entered the yoghurt category with products focusing on protein, gut health and breakfast replacements, but there is no clear market leader.
Huel-YO, a breakfast granola based yoghurt, is designed for older Hueligans who crave a familiar and nutritionally complete meal.
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To support energy, muscle mass and cognitive health
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it is packed with 26 essential vitamins and minerals
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it has 15 grams of plant-based protein
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includes live bio-cultures
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To combat boredom
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it will have a range of indulgent flavours
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Online orders will include only seven pots instead of Huel’s usual twelve-pack meals, due to the live bio-cultures. This adjustment is not a concern, as Huel now owns its manufacturing plant.
Sales Projections
D2C
Projected revenue and sales has been forecasted using available sales data from 2022 (Holmes, 2024; Jacobs, 2023) and its 2024 financial statement:
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75% of the business is D2C
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914,000 worldwide customers in 2022
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Average order value by customer was £73
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Average order frequency was 1.72
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Target demographic data
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39.8% is over 50
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65% are wellness enthusiasts
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The following assumptions have been taken:
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70% of worldwide customers are from the UK
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1% growth rate for over 50
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Marketing activities will increase UK's 50+ that care about wellness at a 2% rare YoY
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Growth rate of 11% on order frequency and order value in 2024
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Growth rate YoY of orders will be 28% in line with profit margin growth of FY2024
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Price increase of 15% in 2026 due to tariffs and inflation, then only 2% for inflation
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1.8% decrease in purchase power as per above only year 2026, and then 2% decrease impacting order frequency
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Box of 7 pots due to live bio-cultures and limited manufacturing capabilities
Calculations start from 2026 as 2025 is the production and test period. Sales for 2026 are the assumed total orders from 2024.
Table 1: Projected Sales and Revenue from 2026 to 2030 for its D2C model
Retail
Projected revenue and sales for its retail distribution channels have taken into account Huel's 2024 revenue as cited in its 2024 financial statement:
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£53 million in revenue for retail distribution channels (25% of total revenue)
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£3.04 RRP for a single ready-to-drink meal
The following assumption have been taken:
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40% margin on RRP
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Same target demographics growth rates
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First year sales of Huel-YO equates to 50% of ready-to-drink bottle sales
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Customers will buy Huel-YO twice a week due to competition from other brands
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£2.29 RRP for Huel-YO due to competitive pricing
Table 2: Projected Sales and Revenue from 2026 to 2030 for its Retail Distribution
Thus the total projected sales and revenue are reported in Table 3:
Table 3: Total Projected Sales and Revenue from 2026 to 2030
Market Sizing
Huel internally assesses its market share by comparing it to in-store shelf product positioning (McMaster, 2024). Depending on the retail channel Huel sits either with other yoghurts or high-protein yoghurts. Thus market sizing has been calculated using the Top down approach in the yoghurt category and the high-protein yoghurt subcategory.
The following modelling assumptions have been factored in:
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Macroeconomics factors are the same as those used for the sales projections
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Same level of marketing spend will guaranteed similar ROI expectation
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Huel spent £19M in 2022 on Facebook Ads - ( Facebook is the preferred social media of the target audience) (Jacobs, 2023)
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New manufacturing plant will help deliver the projected sales figures
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Minimal product alienation as the Huel-YO is for a new target demographic, the new formula address the target market requirements
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Customers will see the benefits and consume the product regularly
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Yoghurt Category
The yoghurt category is currently valued at £2.73bn with a CAGR of 2% (Statista, 2024). Following the market sizing, Huel can own 3.6% of the yoghurt category by 2030, as shown in Graph 1.
Graph 1 Projected Market Share of Huel-YO in the Yoghurt Category
As 75% of the business is D2C, market sizing follows the frequency and order value logic. Calculations are as depicted in Table 4.
Table 4 Top Down Approach Market Sizing for the Yoghurt Category
High-Protein Yoghurt Subcategory
High protein yoghurt subcategory has seen a CAGR of 17%, currently valued at £166m (DairyReporter.com, 2024). Graph 2, depicts the market share gain Huel will expeirnece within the subcategory.
Graph 2 Projected Market Share of Huel YO in the High Protein Yoghurt Subcategory
As expected Huel will own a higher market share in the High Protein Subcategory. Calculations are depicted in Table 5.
Table 5 Top Down Approach Market Sizing for the High Protein Yoghurt Subcategory
Business Model
Both market sizing models show a decrease in market share over time due to the assumptions applied to the forecast. Focusing on consumption and order frequency is key to increase market share. Huel-Yo's product strategy should incorporate ways to sustainably increase frequency of use, such as promoting a healthy lifestyle. Huel’s business model is primarily D2C, with 75% of sales occurring online. However, as 75% of the target demographic prefers in-store shopping (Davies, 2025), expanding the retail distribution is essential. This includes exploring new channels like para-pharmacies, gyms, and fitness events to maximise Huel-YO’s visibility.
Sources:
Brock, S. (2024) Protein needs for adults 50+. Stanford Center on Longevity The Lifestyle, 23 January. Available at: https://longevity.stanford.edu/lifestyle/2024/01/23/protein-needs-for-adults-50/ [Accessed: 5 February 2025].
cueball (2016). No one finding Huel boring?!? [online] Huel. Available at: https://discuss.huel.com/t/no-one-finding-huel-boring/1144 [Accessed 9 Feb. 2025].
DairyReporter.com (2024) How dairy majors are tapping into high-protein dairy this fall. Available at: https://www.dairyreporter.com/Article/2024/10/03/high-protein-dairy-npd/ [Accessed 11 February 2025].
DairyReporter.com. (2024a). Dairy innovation trends: From weight management to protein. [online] Available at: https://www.dairyreporter.com/Article/2024/11/15/dairy-innovation-trends-in-2025-from-weight-management-to-protein [Accessed 11 Feb. 2025].
Euromonitor International (2024) Consumer profile - United Kingdom, Euromonitor International.
Foster, A. (2023). 7 Huel Side Effects (And Why They Happen). [online] Snackfully. Available at:https://snackfully.co.uk/blogs/snackfully-snackmasters-community/7-huel-side-effects-and-why-they-happen [Accessed 9 Feb. 2025].
Holmes, H. (2024). Huel sales and profits surge as UK expansion plans revealed. [online] The Grocer. Available at: https://www.thegrocer.co.uk/news/huel-sales-and-profits-surge-as-uk-expansion-plans-revealed/697951.article [Accessed 9 Feb. 2025].
Jacob, N., 2023. Huel: What Are Their Margins? [blog] 7 June. The Business Of. Available at: https://www.thebusinessof.co/archive/huel-what-are-their-margins
McMaster, J. (2024) Huel ready-to-drink chocolate meal is activity. LinkedIn. Available at: https://www.linkedin.com/posts/jamesmcmaster_huel-ready-to-drink-chocolate-meal-is-activity-7229793053467664385-lwl6/ [Accessed 11 February 2025].
FireMutt (2024).. Reddit - Dive into anything. [online] Available at: https://www.reddit.com/r/Huel/comments/197aq4o/huel_vending_machines_spotted_in_the_wild_at/ [Accessed 9 Feb. 2025].
Sante, C. de (2023). Is Huel Bad For Gut Health. [online] Casadesante.com. Available at: https://casadesante.com/blogs/protein-powder/is-huel-bad-for-gut-health?srsltid=AfmBOoobE4Qbwr_7vg0bsXI_RNtHT2Y9Of9-io-npj6agOL9wrdW3LdU [Accessed 9 Feb. 2025].
Statista. (2025). Usage frequency of yoghurt and fromage frais in the UK. Available at: https://www-statista-com.iclibezp1.cc.ic.ac.uk/statistics/301761/yoghurt-and-fromage-frais-usage-frequency-in-the-uk/ [Accessed 9 Feb. 2025].
Statista. (2024). Revenue of the yogurt market in the United Kingdom from 2018 to 2029 (in billion British pounds) [online] Available at: https://www-statista-com.iclibezp1.cc.ic.ac.uk/statistics/1546592/yogurt-market-revenue-united-kingdom/ [Accessed 9 Feb. 2025].
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