Hero Group is planning to exploit the “untapped potential” for Deliciously Ella across Europe following the takeover of the healthy snacking brand started by wellness entrepreneur Ella Mills.
CEO Rob Versloot told The Grocer in an exclusive interview he had also identified significant headroom to grow distribution in the UK in Tesco and Sainsbury’s, where the brand already has a presence, and in Asda, where listings are more limited.
The Swiss multinational struck a deal this week to buy the Deliciously Ella brand, the factory that makes its oat bars and other snacks, and the recipe and wellness app.
The value of the deal is undisclosed but City sources said a price of 10x EBITDA would “not be unreasonable”. It is understood, underlying profits at Deliciously Ella in 2023 were more than £4m.
Ella and husband Matthew Mills, who were the majority shareholders, will remain with the company to lead the next stage of growth.
The Plants restaurant in central London and the cross-category brand of the same name, launched in partnership with Waitrose in 2022, were not part of the acquisition and remain owned by the Mills, with Kerry Atack, a long-term colleague from Deliciously Ella, appointed MD to run the business.
Versloot said, as a group, Hero was focused on healthy snacking, and Plants, with its nut butters, yoghurts, soups and sauces, was outside its expertise.
“The UK is the biggest healthy snack market in Europe, so it’s a great place for us to expand our footprint,” he added.
He also expected Hero’s size – its annual turnover tops CHF1.2bn (£1.1bn) – and strong relationships with big European retailers would be the perfect platform to supercharge Deliciously Ella’s growth overseas.
The brand already has a presence in 40 international markets – and is preparing to launch its oat bars in the US with Whole Foods Market – but UK sales still made up the vast majority of its £21m grocery revenues in 2023.
“Ella has built a large audience of followers across Europe already and she is quite well known, which is a base to build on, but the brand is still quite small, which is great as it means together, we can make it bigger,” Versloot said.
“It’s logical to distribute Deliciously Ella to other European markets through our own systems, leveraging the strong relationships we have. The brand is complementary to others in our portfolio and there is potential to put it next to our other offerings in store.”
Founded in 1886, Hero operates in the baby & toddler, spreads and snacking categories with brands such as Corny, Schwartau, Beech-Nut and Semper.
The Deliciously Ella deal expands on its current presence in the UK in the babyfood category with the Organix brand, which it acquired in 2008.
Under Hero’s ownership, the Organix brand has almost doubled in size and recorded revenues of more than £40m in 2023.
Versloot ruled out any further snacking acquisitions in the UK in the short term.
“We want to focus on making sure Deliciously Ella is a success,” he said. “We have no concrete plans to further acquire in the UK, but never say never. We really believe the brand portfolio has huge potential, so that is where the focus will be in the immediate future.”
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