UK protein-rich food specialist Muscle Food is drawing up international expansion plans after receiving GBP10m (US$13.5m) from British investment fund BGF.
BGF has taken a minority equity stake in the Nottingham-headquartered company, which said the funding will be used to establish a presence in Continental Europe and to develop its online platform to drive further growth.
Chief operating officer Steven Curran said the increased presence will involve a Continental European distribution hub, although no decision has been taken yet on its location.
Set up in 2013 by CEO Darren Beale, Muscle Food sells lean meats, high-protein food and sports supplements. After initially attracting a following of fitness enthusiasts, bodybuilders and athletes, the firm says it has been winning a broader customer base of health and cost-conscious eaters in the UK and Continental Europe.
Muscle Food own-branded foods – predominantly including meats, seafood, eggs and snacks – and ‘Live Clean’ meal boxes have been delivered to more than half a million homes across Britain.
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The company recently started exporting to Continental Europe and sales reached GBP45m (US$61m) in the year to 31 March 2017, up from GBP14m in 2015.
Late last year Muscle Food began selling its range of products – including Protein Pizza – in Sainsbury’s and will be launching in Morrisons this month.
COO Curran said he is confident other deals with the UK’s ‘big four’ supermarkets will emerge.
“We haven’t got any confirmed listings with Asda and Tesco yet but we are confident the deals with Sainsbury’s and Morrisons will lead to listings in other supermarkets as well,” he said.
“Supermarkets are coming to us because customers trust the Muscle Food name and they see the ability to translate that into stores.”
Having said that, 98% of Muscle Food’s sales are still online and Curran sees things staying that way until the retail partnerships start to kick in.
On expansion into Continental Europe, Muscle Food already has dedicated websites for France, Germany and The Netherlands but orders from those countries, and beyond, are fulfilled from the UK.
However, Curran said: “It will get to a stage when it becomes wrong to send a truck from the UK to Germany when you can send it from there.”
In terms of the sales approach for Continental Europe, Curran accepts there are some cultural differences but believes the online/retailer mix is the right one in the long term.
“If you look at what Amazon and Ocado do in the UK, is that situation the same in Germany? Absolutely not,” he said.
“There are local habits in terms of products and food delivery online.
“But things will change and we are confident in our ability to keep up with trends in the market.
“We don’t have the name in Europe yet but we will build the business online as we have in the UK and once the name is known we can attract the supermarkets.”
Speaking about the BGF investment, Muscle Food CEO Beale said in a statement: “The partnership with BGF will help us accelerate our growth and switch even more customers on to our unique proposition.”
Greg Norman at BGF said: “The Muscle Food team are talented, focused and passionate. They have successfully managed the high-growth experienced in the last three years and are ambitious about accelerating the expansion. We are pleased to be supporting the group as it continues to scale.”
BGF, formerly known as British Growth Fund, was established in 2011, in the wake of the 2008 financial crash by banks Barclays, Lloyds, RBS, HSBC and Standard Chartered to provide financial support to small and medium-sized enterprises (SMEs).
