Butternut Box cuts into its losses with European expansion

According to the most recent strategic report filed by the company, Butternut Box reported £126.7 million ($161.1M/€153.6M) in revenue in 2023. It posted £69.5 million in 2022, marking an 82% increase.

The company says growth was driven by new customers in existing markets, low customer churn and an eastward market expansion.

The subscription-based fresh pet food brand is among the largest in Europe and attributed much of its growth to the 2023 acquisition of Polish player PsiBufet. Previously, Butternut Box primarily served pet owners in the UK, Ireland, The Netherlands and Belgium, but the PsiBufet purchase pushed the company much farther into Eastern and Central Europe.

Positive progress

Though it made positive progress, Butternut Box operated at a loss in 2023. Operating loss as a percentage of revenue fell to 7.5%, down steeply from 34.3% in 2022. Gross profit as a percentage of revenue improved to 47.5%, up from 37.9% in 2022. The report credits production efficiencies and economies of scale for profit growth.

“This greatly improved unit costs associated with each box whilst improving on quality and customer experience,” the report states.

New money and possible growth

A major investment in late 2023 likely helped boost the year’s numbers. In September, the company raised £280 million ($351M/€‎327M) from private equity firm General Atlantic and existing investor L Catterton.

Officials said at the time that the investment may yield further growth in continental Europe.

With the company’s 2023 growth coming from international expansion, Butternut Box may find further expansion appealing. In its 2023 report, officials said they’re eyeing expansion into other countries, such as Germany.

Future outlook

The 2023 report hints at what to expect in the future. It states that the company will push brand awareness, launch in stores with retail partnerships and introduce a second pet brand. The expansion of automation and other production technologies could further increase efficiency.

While Butternut Box operated at a loss in 2023, the growth in the trend of pet humanization and a push for healthier pet food may help the company’s bottom line.