Vegan milk maker Oatly pursues potential IPO

24 Feb 2021 --- Swedish oat milk maker Oatly, which is backed by prominent celebrity investors including Oprah Winfrey and Jay Z, plans to go public by filing for an IPO in the US. The move comes amid rising demand for plant-based milk alternatives as consumers seek better-for-you beverages with environmental credentials.

“We’ve taken the first official step toward pursuing a potential IPO by submitting a confidential F-1 registration statement with the Securities and Exchange Commission (SEC) in the US. And due to the confidentiality of the process, we can’t elaborate any further,” Linda Nordgren, Oatly communication manager, tells FoodIngredientsFirst. 

There is no confirmation over Oatly’s potential value, however, speculation is mounting over Oatly’s potential value, which some estimates put it above US$5 billion, with some even citing US$10 billion. 

The price and number of shares that could be purchased have not yet been determined.

The initial public offering is expected to take place after the SEC completes its review process, subject to market and other conditions.

IPO boom for plant-based alternatives
Oatly wants a New York listing to tap into the IPO boom and the rising trend for plant-based alternatives to animal products. 

Last summer, Oatly raised US$200 million in funding, which saw Oprah Winfrey, Jay Z and Natalie Portman invest in the alt-milk brand.The company follows in the footsteps of other plant-based companies that have gone public such as alternative meat company Beyond Meat, which had its IPO in 2019, and Laird Superfood, which listed on the NYSE last year.

Meanwhile, Greek yogurt giant Chobani is reportedly considering going public this year, as is plant-based egg maker and cell-based meat developer Eat Just.

Oatly’s moves in the plant-based arena
Last summer, Oatly raised US$200 million in funding, which saw Oprah Winfrey, Jay Z and Natalie Portman invest in the alt-milk brand alongside other high profiles investors, including Roc Nation, former Starbucks Chairman and CEO Howard Schultz, Orkila Capital, and Rabo Corporate Investments, the investment arm of Rabobank.

In a company statement, Oatly adds how as the “world’s original and largest oat drink company,” for over 25 years, Oatly has exclusively focused on developing expertise around oats: a global power crop with inherent properties suited for sustainability and human health. 

“Our commitment to oats has resulted in core technical advancements that enabled us to unlock the breadth of the dairy portfolio, including alternatives to milks, ice cream, yogurt, cooking creams and spreads,” it says. 

Oatly’s brand of products now spans more than 20 countries across Europe and Asia. 

The demand for a more sustainable food system is global and growing fast, with much of the shift being led by Millennials and Generation Z. 

Oatly’s patented original oat milk created the fast-growing oat milk category. It is considered a pioneer in the plant-based food space.

Oatly has transformed from a Nordic brand into a global movement by delivering unique, high-quality, engaging products based on proprietary, patented oat-technology to the new emerging generation of conscious consumers.

As part of the company’s overarching mission to reduce the CO2 emissions footprint of the food industry by shifting consumers’ consumption choices, the company added a carbon footprint label to its products in Europe during 2019. 

Plant-based portfolio 
Oatly has a range of products, including oat milk, ice cream, cold coffee, yogurt substitutes, cooking cream, spread and custard.

It was founded in 1990 from Lund University research. The company’s patented enzyme technology turns fiber-rich oats into a highly nutritious beverage.Oatly is also in the spotlight for its part in the EU row concerning the future use of dairy-like names and terminology.

The company is located in the southern region of Sweden, with its headquarters in Malmö and the Production and Development Center in Landskrona. 

Starbucks tie-up 
Following a regional US trial, which saw Oatly milk being used across 1,300 stores in Illinois, Indiana, and Wisconsin, last year, Starbucks is preparing to launch Oatly vegan oat milk in all US stores this spring. 

Last September, Starbucks targeted eco-conscious consumers by rolling out more plant-based offerings in selected stores across Asia. 

The plant-based range includes products from alternative meat giants Impossible Foods and Beyond Meat, as well as Oatly.

Oatly’s process
In the first phase of the process, Oatly mixes the oats with water and gently grinds the mixture in the grinding room. The natural enzymes convert oat starch into small components, especially maltose (also called malt sugar), which naturally sweetens the products. 

During the separation, Oatly removes the bran, that is, the oats’ small shells, leaving loose fibers and beta-glucans. Here is an oat base which is a good source of nutrition. 

Different ingredients (rapeseed oil, calcium or vitamins) are then added depending on the product. The products are heat-treated before packaging, with ultra-high temperature (UHT) or pasteurization, to increase their durability. 

After the product has undergone heat treatment, the fat droplets are broken down into smaller droplets to ensure that the liquids are properly mixed.

Plant-based censorship
Oatly is also in the spotlight for its part in the EU row concerning the future use of dairy-like names and terminology. 

Europe’s plant-based industry leaders are hitting back at a proposed amendment to a ban that would extend restrictions of the “imitation or evocation” of dairy products in milk alternatives.

In addition to banning factual disclaimers, such as “does not contain milk,” the broad description of the pending reform suggests it could further prohibit the use of any dairy-free F&B packaging resembling that of milk products, such as yogurt pots or similar advertising. 

In response, Oatly, ProVeg International and Upfield have formed a coalition that is petitioning industry and public members to help prevent Amendment 171 from being enacted.

Yesterday, dairy-free yogurt producer Alpro added its voice to a coalition of nearly 100 plant-based proponents speaking out against the EU’s push to broaden the variety of banned “dairy-like” expressions in milk-free products. 

By Gaynor Selby