Ella’s Kitchen sees 17-year run of unbroken sales growth come to an end

Revenues at Ella’s Kitchen have declined as branded babyfood pouches came under increased pressure from own label. It ended a 17-year run of profitable sales growth for the UK’s market leader in the category.

Newly filed accounts revealed turnover fell by 1.4% to £86.1m in the year to 30 June 2024, with UK figures tumbling 2.7% to £68.3m. Ella’s business overseas climbed 3.8% to £17.7m by contrast.

The Companies House documents did not spell out the reason for the decline, but growth at the business has been slowing in recent years.

Higher own-label volumes in the category led to a drop in Ella’s market share in 2022/23, contributing to a sales rise of just 1.8%, However, the business did not detail its share figures in the latest accounts. The Grocer’s annual Top Products survey for 2024 showed an overall 6% fall for branded packs in the category as private label continued to expand.

Despite the revenue decline at Ella’s last year, operating profits increased 4.5% to £15.4m as the Hain Celestial-owned group continued its “rigorous management of overheads” and tight control over marketing spend.

“We are pleased that Ella’s Kitchen has delivered another strong year in FY24, with profit increasing by 4.5%,” said Wolfgang Goldenitsch, president of international at Hain.

“This increase in profitability is largely down to our focus on managing operating costs effectively, which in turn enables us to reinvest in areas that drive innovation and growth.

“At the core of this strategy is our goal of making ‘better-for-you’ products that little ones love more attainable. In 2024, Ella’s launched eight new SKUs into a new three-plus segment in the category. Designed to offer better-for-you alternatives to less healthy out-of-aisle alternatives, the ranges deliver great tastes and textures that little ones love without compromising on nutrition.”

Ella’s underwent large-scale changes to its management team in the financial year as long-time CEO Mark Cuddigan left the business, followed by replacement MD and company veteran Will Howard, finance director James Waters, operations director Nella Jansson-Wright and HR director Catherine Allen.

It followed a group-wide restructuring programme at US parent Hain, which is continuing to struggle with a turnaround attempt.

Goldenitsch added the proudest achievements at the babyfood brand “extend well beyond our commercial results”.

“In 2024, we reaffirmed Ella’s Kitchen’s commitment as a certified B Corp by completing our recertification, and we delivered on our mission of helping every little one grow up happy, healthy, and never hungry through charity donations, advocacy, and sustainability projects,” he said. “This included donating over 843,000 products to food bank partners across the UK; campaigning for the UK government to put little futures first by delivering a 14,000-strong petition to the front door of No 10; and advancing our partnership with the RSPB on our ‘30x30’ campaign, which has already restored over three million sq ft of wildflower meadows across the UK as we work toward our goal of 30 million sq ft by 2030.

“We look forward to continuing this journey across FY25, with more exciting product launches that will deliver better-for-you alternatives for little ones, a dedicated sugar reduction programme and even more advocacy that puts little futures first.”