Danone acquiring Huel. Lactalis acquiring Protein Works. Nestlé moving to full ownership of yfood. Individually, each deal makes sense. Together, they tell us something more interesting about where the food and drink industry is heading. Functional nutrition has moved from the edges of the market into the strategic plans of some of the world’s biggest […]
Danone acquiring Huel. Lactalis acquiring Protein Works. Nestlé moving to full ownership of yfood.
Individually, each deal makes sense. Together, they tell us something more interesting about where the food and drink industry is heading.
Functional nutrition has moved from the edges of the market into the strategic plans of some of the world’s biggest food businesses.
For years, brands such as Huel, Protein Works and yfood grew by serving consumers who wanted food to do more than simply fill a gap. They built propositions around protein, convenience, complete nutrition, active lifestyles, weight management and better-for-you alternatives to traditional meals and snacks.
That used to feel like challenger-brand territory.
It was a space where smaller, sharper brands could thrive because they understood the consumer before the mainstream did. They were digitally native, community-led, fast-moving and fluent in the language of younger, health-conscious shoppers.
What has changed is that Big Food now wants in.
This is not happening in isolation either. Nestlé’s acquisition of Vital Proteins, Unilever’s acquisition of Liquid I.V. and Simply Good Foods’ move for OWYN all point in a similar direction. Large consumer goods businesses are investing in brands that sit at the intersection of nutrition, health, convenience and lifestyle.
The common thread is clear: functional nutrition is becoming mainstream.
A more intentional consumer
The modern food consumer is becoming more intentional.
That does not mean everyone is suddenly becoming highly health-focused. It does not mean indulgence is disappearing either. People still want taste, enjoyment and convenience. But more consumers are asking different questions of the products they buy.
Does it contain enough protein? Will it keep me full? Does it fit around my day? Is it better than the snack, drink or meal I would otherwise have chosen? Does it support a specific health or lifestyle goal?
That is where functional nutrition has found its momentum.
It sits at the intersection of health, convenience and performance. It gives consumers a reason to trade up. It also gives retailers a category that can stretch across several missions: breakfast, lunch, gym, work, travel, snacking, meal replacement and weight management.
The brands being acquired are not just selling products. They are selling a solution to a changing lifestyle.
Huel made complete nutrition feel accessible to time-poor consumers. Protein Works built credibility in active nutrition and high-protein products. yfood helped normalise ready-to-drink meal solutions across Europe. Vital Proteins brought collagen into the mainstream wellness conversation. Liquid I.V. helped turn hydration into a more functional and lifestyle-led category.
Each of these brands has benefited from a consumer who increasingly expects food and drink to do a job.
For some people, that job is energy. For others, it is satiety, muscle maintenance, convenience, gut health, weight management, beauty, hydration or recovery.
The point is not that every consumer is thinking about nutrition in a clinical way. They are not. The point is that more eating and drinking occasions are becoming needs-led.
That creates a significant opportunity for brands that can combine credibility, convenience and a clear reason to exist.
Where GLP-1s fit in
It is tempting to frame this entire trend around GLP-1 weight-loss drugs. They are certainly part of the picture, but they are not the whole story.
GLP-1s have sharpened a question that was already becoming important for food and drink businesses:
If consumers eat less, what will they choose when they do eat?
That question matters.
If appetite is reduced, every eating occasion becomes more valuable. Consumers may become more selective. Empty calories may face more scrutiny. Products that provide protein, satiety, fibre, vitamins, minerals, convenience or functional benefits may become more attractive.
That does not mean GLP-1s will suddenly transform every aisle of the supermarket. Adoption, access, cost and long-term behaviour change will all shape the pace of impact. It would be too simplistic to suggest that these acquisitions are only happening because of weight-loss medication.
But it would also be naive to ignore the signal.
Food businesses are not waiting for the market to fully change before acting. They are positioning themselves now.
Functional nutrition brands give major food groups exposure to categories that could benefit from several overlapping trends: higher protein diets, weight management, meal replacement, active ageing, muscle maintenance, convenience, lower sugar, gut health and personalised nutrition.
GLP-1s are not the only reason these acquisitions are happening. But they may be increasing the urgency.
Why Big Food wants these brands
The appeal of businesses like Huel, Protein Works and yfood goes beyond the product range.
Yes, they bring access to attractive categories. But they also bring capabilities that many large food businesses have historically found difficult to build quickly.
They understand digital communities. They have direct consumer relationships. They know how to launch quickly. They have strong data on consumer behaviour. They have distinctive brand identities. They have credibility with younger, health-conscious consumers.
That combination is powerful.
For a multinational, acquiring a brand like this can be faster and more effective than trying to build one from scratch. It provides immediate relevance, an existing customer base, a tested proposition and a platform for international expansion.
The strategic logic is particularly clear for dairy and nutrition-led groups.
Protein is one of the most important ingredients in the current consumer health conversation. Dairy businesses have deep expertise in protein, formulation, manufacturing, supply chain and nutrition. Challenger brands often have stronger consumer energy, sharper positioning and greater digital capability.
Bring those together well, and there is a significant opportunity.
But that final point matters: bring those together well.
Because buying the brand is only the first step.
The integration question
The real challenge is what happens next.
Many successful functional nutrition brands have grown precisely because they do not feel like traditional FMCG brands. They are often founder-led, community-driven, fast-moving and close to their consumers. Their tone of voice is sharper. Their innovation cycles are quicker. Their audiences often feel a sense of ownership or loyalty that is difficult for large corporates to replicate.
That creates a risk.
If a multinational scales the brand too aggressively, changes the proposition too quickly or over-corporatises the identity, it can dilute the qualities that made the brand valuable in the first place.
The winners will be the businesses that can add scale without removing edge.
That means improving distribution, manufacturing, R&D, quality, compliance and international reach, while still protecting the brand’s distinctiveness. It means knowing when to integrate, when to support and when to leave the brand alone.
This is where some acquisitions work better than others.
There is a big difference between giving a challenger brand the infrastructure to grow and absorbing it so fully that it loses its original advantage.
Innocent’s relationship with Coca-Cola is often used as one version of the playbook. Coca-Cola provided scale and reach, while Innocent continued to operate with a distinct identity, tone and brand world. It has not been without criticism, but Innocent has remained recognisably Innocent.
Graze offers a more complicated example. Unilever acquired the healthy snacking brand in 2019, helped build its UK retail presence, and later agreed to sell it to Katjes International and Candy Kittens. It would be too neat to say it “failed” because of integration alone. Markets change, portfolios change and parent companies change their priorities. But it does show that strategically logical acquisitions do not always become long-term homes for challenger brands.
That distinction matters for functional nutrition.
The question is not just whether Big Food wants these brands. Clearly, it does.
The better question is whether Big Food knows how to own them.
The talent question behind the deal activity
These acquisitions are not just portfolio moves. They are capability moves. And capability is ultimately a people question.
But the key talent question is not simply, “who can help these brands grow?”
It is more specific than that:
What kind of business does the acquirer want this brand to become?
That is where the long-term nature of these deals becomes important.
For major food groups, there are broadly two paths after acquisition.
The first is the autonomy model. The acquired brand retains its own culture, identity, leadership style and a meaningful level of strategic freedom, while the parent company provides the infrastructure to scale. Capital, distribution, manufacturing expertise, international reach and corporate governance sit around the brand, rather than on top of it.
This is often the more attractive model for challenger brands because it protects the qualities that made them successful in the first place. The brand can still move quickly, speak to its community in its own tone of voice and make decisions with a level of entrepreneurial pace. The parent company gets access to relevance and growth, without suffocating the brand’s distinctiveness.
The second path is the integration model. In this scenario, the acquired business is more fully absorbed into the parent company’s operating structure. That can bring benefits: stronger retail relationships, better systems, more disciplined processes and access to larger teams. But it can also create risk.
If a challenger brand becomes too corporate, too slow or too disconnected from its original consumer base, it can lose the very advantage the acquirer paid for.
That distinction matters for talent.
An autonomy model requires leaders who can operate with independence while still managing the expectations of a multinational owner. These people need to be entrepreneurial, commercially sharp and comfortable with ambiguity, but also mature enough to work with corporate governance, reporting structures and longer-term strategic planning.
An integration model requires a different profile. It needs leaders who can professionalise the business, build systems, improve processes and connect the brand into a much larger organisation. That can be valuable, but it must be done without flattening the culture or slowing the pace of innovation.
The danger is assuming that the same leadership team is right for every phase.
The people who build a challenger brand from early traction to scale are not always the same people who can lead it through multinational ownership. Equally, corporate leaders who are excellent in large FMCG environments may struggle if they do not understand the speed, informality and consumer intimacy of a challenger brand.
That is why these acquisitions create such an interesting talent challenge.
The businesses that succeed will need leaders who can bridge both worlds: challenger-brand pace and corporate scale. Commercial leaders who can take brands from D2C and specialist channels into grocery, convenience, international retail and foodservice. Marketing leaders who understand community, performance marketing and brand building. Category and shopper specialists who can help retailers understand where these products belong. Innovation and technical teams who can keep products credible, compliant and relevant. Operations and supply chain leaders who can scale without damaging quality, availability or margin.
Above all, they will need leadership teams that are clear on what should change after acquisition, and what must be protected.
Buying a functional nutrition brand is one thing. Knowing how to scale it without removing its edge is another.
What does this mean for challenger brands?
For challenger brands in functional nutrition, the recent wave of acquisitions is both validation and warning.
On one hand, it confirms the strength of the category. Large food and drink businesses do not acquire brands like Huel, Protein Works and yfood unless they believe the consumer shift has long-term potential. For founders, investors and leadership teams in this space, that is encouraging.
It suggests there is strategic value in brands that can build trust with health-conscious consumers, create strong communities and bring genuine differentiation to categories that have historically been dominated by larger players.
It may also increase investor interest. When major corporates become active acquirers, the market gets a clearer view of potential exit routes. That can attract more capital into the category and support the next wave of functional nutrition businesses.
But it also changes the competitive environment.
Functional nutrition has always been a category where challengers could thrive. Many of the most successful brands have grown through direct-to-consumer models, social media, influencer advocacy, community building and sharp positioning with younger consumers.
They have been able to move quickly, speak with a more authentic tone of voice and build products around emerging consumer needs before larger businesses have had time to react.
That advantage will not disappear. But it may become harder to defend.
As global food groups acquire more capability in functional nutrition, they bring scale to a category that was once more fragmented. They can improve distribution, invest heavily in marketing, expand into international markets, secure stronger retail partnerships and use existing R&D, manufacturing and supply chain infrastructure to accelerate growth.
For independent challengers, this raises the bar.
It will no longer be enough to have a high-protein product, a clean-looking brand and a strong paid social strategy. The brands that continue to win will need sharper differentiation, stronger communities, better product credibility and a clearer reason to exist.
They will also need to decide what they want to become.
Some will build with acquisition in mind, creating brands and capabilities that are attractive to strategic buyers. Others will try to remain independent and compete against larger, better-funded players. Both routes are possible, but each requires a different type of leadership.
For acquisition-minded brands, the challenge will be proving that they have more than short-term growth. Buyers will look for brand loyalty, repeat purchase, margin resilience, scalable operations, credible nutrition claims, strong regulatory standards and the ability to grow beyond a narrow early adopter audience.
For brands that want to stay independent, the challenge will be focus. They will need to protect the advantages that made challengers successful in the first place: speed, closeness to the consumer, authenticity, community and the ability to spot emerging needs before the mainstream market catches up.
This is where talent becomes critical.
Challenger brands in functional nutrition will need leaders who can scale without becoming generic. They will need people who understand D2C and retail, brand and performance marketing, nutrition and compliance, community and commercial discipline.
The businesses that get this right will be able to hold onto their edge while building the structure needed for long-term growth.
The category is becoming more attractive, but also more competitive.
For challengers, the opportunity is still there. In fact, it may be bigger than ever. But the next phase will reward brands with real depth: a clear proposition, a loyal consumer base, operational maturity and a leadership team capable of navigating a market that now has the full attention of Big Food.
What this tells us about the future of food and drink
The recent wave of acquisitions points to a broader change in the market.
Food and drink businesses are preparing for a consumer who expects more from every eating occasion.
More protein. More convenience. More functionality. More personal relevance. More trust. More value from fewer calories.
That does not mean traditional categories disappear. But it does mean the boundaries between food, drink, nutrition, wellness and performance are becoming less clear.
A ready-to-drink meal can compete with lunch. A protein shake can compete with breakfast. A hydration powder can compete with a soft drink. A collagen supplement can sit somewhere between beauty, nutrition and lifestyle. A high-protein snack can be both treat and functional product.
This is the new appetite economy.
Consumers may still want enjoyment, taste and indulgence, but more of them also want food and drink that fits a specific need. The brands that understand those needs are becoming more valuable. The major food groups have noticed.
For Big Food, the opportunity is to buy relevance, capability and access to consumers they have not always reached easily.
For challenger brands, the opportunity is just as significant, but the bar is rising. The category’s growth has been validated, but it is no longer flying under the radar. The next generation of winners will need more than strong branding and good social media acquisition. They will need defensible propositions, credible products, loyal communities and the talent to scale without losing what made them distinctive.
The appetite for functional nutrition is growing.
The question now is who is best placed to satisfy it: the global food groups buying their way in, or the challengers who understood the consumer first?