4 min read

Are Meal Replacement Shakes The End of Food?

“Stop eating” was an actual tagline of early weight management products like nutrition shakes. Now, meal replacements have grown into a booming category appealing to a variety of health-conscious consumers.

Through the years 

  • In 1959, Metrecal introduced a pink, goopy shake advertised as a meal alternative for consumers looking to shed pounds.
  • In the ’70s, brands like Ensure and Slim Fast hit the scene, promising a healthier (albeit sugary) and better tasting liquid meal replacement.
  • In the ’90s and early-2000s brands like Sustacal, Nestlé (Boost and Resource), and Muscle Milk reoriented the category around protein.

Flash-forward to the present day, and meal replacements have evolved yet again. Now, liquid meals aren’t just for bulking up or slimming down; the main sell is saving time.

Fueled by busy and health-conscious consumers seeking convenience and nutrition, the meal replacement market has seen considerable growth. In 2016, the global meal replacement market was estimated at $15.1B, and growing at a rate of 6.9% annually, that number is forecast to reach $20.6B by 2021. It’s no surprise, then, that a number of upstart brands are looking to take advantage of the opportunity.

The pivot-point for the category came in 2013 when Soylent launched a prototype drink for time-crunched Silicon Valley techies who couldn’t spare a moment for a real meal. As Soylent founder Rob Rhinehart put it: “I didn’t have the time, energy, or motivation to eat well, but my diet was harming my health, and that harmed my productivity.”

For Rhinehart, the answer was a more efficient way to get the nutrition his body required. As an alternative to food that’s ordered or prepared, meal replacement shakes save on time, effort, and decision-making.

Now, in an attempt to appeal to the modern, on-the-go consumer, powdered or ready-to-drink shakes are popping up everywhere.

  • In 2017, Soylent raised $50M in a Series B round led by GV, with Lerer Hippeau and Andreessen Horowitz, bringing total funding to $74.5M.
  • Huel has sold 50M meals globally, with an annual growth rate of 150%. The company predicts a valuation of $1.25B in the next three years.
  • Ample raised over $4M from investors and another $774K in an equity crowdfunding, boasting a 150% monthly growth rate for Amazon-based revenue.

While each brand is ultimately focused on convenience, their products vary to include keto-friendly, vegan, protein-packed, or soy-based formulas. But these brands aren’t all that dissimilar — they all seem to embrace clean-label ingredients and online DTC sales.

Cleaning up: The evolution of meal replacements has created a competition for the “cleanest” label.

According to CMO Mark Olivieri of vegan meal replacement company OWYN, consumers don’t want “the filthy ingredient label of some of these legacy brands.” By removing chemicals, fillers, and sugar alcohol, Olivieri thinks the winning meal replacement brand is the one that develops the cleanest label.

OWYN and other newcomers have ditched the processed sugars, chemicals, and synthetics common among the old guard. Instead, these companies market their high-quality ingredients as a selling point for health-conscious consumers.

Moving Online: Upstart meal replacement brands are increasingly adopting a DTC, ecommerce-driven approach to sales.

Huel CEO James McMaster credits this approach as being vital to his company’s global ambitions, saying: “Being direct-to-consumer has meant we could launch faster internationally than [our competitors] as we didn’t have to go out and get distribution deals.”

  • Huel now ships over 1.5M meals each month to 80 countries around the world.

As an added benefit, the DTC model lets brands cash in on a subscription-based model. Huel, Soylent, and Ample have built loyal followings by offering 5–15% discounts for subscribers.

  • Ample, for one, earns over 60% of its revenue from subscribers who spend more than $100/month for shakes delivered to their doorstep.

Ecommerce-driven expansion has also proven to be a pathway to retail. Soylent, Huel, and OWYN each got their start online and are now securing distribution deals, landing on the shelves in mainstream retailers like Target and Whole Foods.

Zooming out: Technically speaking, we can eliminate food from our diets with a nutritionally complete alternative. But whether or not these replacements offer the same benefits of real food is somewhat unclear. By synthesizing an alternative in a lab, there’s a chance we might be missing something, risking nutritional deficiency—or worse, overall well-being—at the cost of convenience.

The concept begs the question not only of health, but also of our relationship with food. Holistically considered, it seems as though food, or possibly the experience of eating—be it social, emotional, or sensory—is in many ways central to our daily lives. What happens when we replace that vital experience with a five-minute slurp of a 300-calorie ‘balanced macronutrient profile’ remains to be seen. For now, though, it offers a health-conscious option for those too busy to find something solid.

Fitt Insider Weekly Letter

Every Tuesday, we’ll send you an email filled with curated insights on the industry’s most important news.