Müller snaps up Biotiful Gut Health in £100m-plus deal

Müller UK & Ireland has continued its recent acquisition drive with the purchase of market-leading kefir brand Biotiful Gut Health. 

The value of the deal is undisclosed. However, industry sources suggest Müller paid around £115m for the business. The dairy giant said the acquisition would allow it to expand into the growing functional health yoghurt and drinks segment, an area it was currently not active in.

Booming sales across the gut-health segment helped Biotiful double its profits last year, swinging from a small loss in 2023 to a £2.3m pre-tax profit in the year to 31 March 2024, according to its most recent accounts, posted with Companies House. Turnover has also risen significantly in recent years, jumping from £19.5m in 2022 to £35.5m last year.

Biotiful, which was founded in 2012 by former figure skater and financier Natasha Bowes, has since seen further strong growth, on the back of new listings in the mults, and even moves into tertiary brands with Aldi. It posted retail sales of £8.5m last year in yoghurts and £46.1m in drinking yoghurts, according to NIQ data for The Grocer’s Top Products survey [52 w/e 18 September 2024].

Müller has had a UK kefir offering in the past, launching kefir smoothies in 2021 but this range was discontinued in 2023. However, it has sold kefir products in Germany for many years. 

Biotiful, alonsgide The Collective, which was acquired by Yeo Valley Organic last month, were both seen as one of the few attractive options for M&A within the dairy sector, with Houlihan Lokey dealmaker Garyth Stone telling The Grocer last year that the UK’s “highly consolidated” dairy sector no longer had “many other sizeable businesses to sell”.

The brand was “a business we have long admired: it is one of the fastest growing brands in the sector, has great tasting products and a real focus on consumer and innovation”, said Müller Yogurts & Desserts CEO Richard Williams. “This is a business which fits really well within our existing portfolio of brands.”

Growth ambitions

Williams will join the existing Biotiful leadership team to help it “realise its growth ambitions”, Müller said, adding Bowes would “continue to support the team in an advisory capacity to ensure a smooth transition“.

Biotiful products are currently manufactured by First Milk, which will continue as normal, Müller said. The brand’s products are already sold in France, Netherlands and the Middle East. 

“Since founding the company 13 years ago, through unwavering focus and dedication to best-in-class innovation and product quality, Biotiful has gone from strength to strength and grown into the successful consumer-centric business it is today,” said Bowes.

“I am humbly proud of Biotiful’s major positive impact on the entire category so far, in bringing natural health to the forefront of innovation in yogurts,” she added.

Read more: What Yeo Valley buying The Collective means for UK yoghurt

“And I’m especially excited about how this can now be amplified and accelerated through the Müller acquisition, with its breadth and depth of resources and ambition to take natural gut health to the next level.”

Williams said Müller was “already growing and optimising our range of health and nutrition products and Biotiful Gut Health will really help us expand into new growth areas to meet changing consumer needs”.

The dairy giant was “confident our investment in Biotiful will enable the brand to further accelerate its growth potential, benefitting both consumers and our retail partners”.

The acquisition also marks the latest move in Müller’s recent pivot towards more profitable dairy categories in the UK, as it seeks to build on its core own label milk and branded yoghurt offering.

Müller offloaded its loss-making doorstep delivery serice Milk & More to Freshways in November 2023 for a nominal fee. It then announced the purchase of Yew Tree Dairy last June, as part of a big push into the lucrative dairy ingredients category. 

The dairy giant, which posted a series of big losses during the 2010s, shed a further £65m in its most recent accounts – largely linked to the sale of Milk & More. However, it stressed the past year had otherwise been a “strong” accounting period.

The Biotiful deal also comes amid a period of busy M&A activity in the wider dairy sector.

Earlier this week, Arla Foods and German dairy supplier DMK Group announced plans to merge – creating Europe’s largest dairy co-operative.