Plant-based milk producer, Oatly Rises 18% in Debut After Raising $1.4 Billion in IPO, going public at a time when increasing demand for vegan milk in young people is driving the industry.
According to Bloomberg, Oatly Group AB, the vegan food and drink maker, climbed 18% in its debut after pricing its initial public offering on the high end to raise more than $1.4 billion. The IPO underscores plant-based products’ jump into the mainstream, as environmental and health concerns spur consumers to seek alternatives to traditional meat and dairy products. Investors have been looking for ways to replicate the public-market success of Beyond Meat Inc., whose shares have surged more than 300% since it went public in May 2019.
Oatly’s goal valuation of $10 billion, widely reported after the Malmö, Sweden-based brand formally filed for IPO at the end of April. According to the Wall Street Journal, the Oatly Group AB’s initial public offering was priced at $17 per share, and the company will begin trading on the Nasdaq Stock Market under the ticker OTLY from today.
Worldwide sales of plant-based dairy substitutes in 2020 rose to $18 billion, according to Euromonitor. But that’s still only 3% of the $600 billion dairy market and as Oatly CEO Toni Petersson says, “The runway’s massive.”
Oatly’s IPO Backed By Oprah, Jay-Z & Others
Last year, Oatly raised $200 million in funding from various backers led by private equity giant Blackstone. Backers include Oprah, Natalie Portman, former Starbucks CEO Howard Schultz, and Jay-Z, through his company Roc Nation. At the time of the filing in April, Oatly reported revenue of $421.4 million in 2020, compared with $204 million in 2019, totaling a $60.4 million loss. Its losses a year earlier totalled $35.6 million. The cult-hit oat milk brand is going public at a time when sustainability is on the minds of a growing number of consumers, particularly the younger ones.
Plant-based milk is a booming market in the US, worth $2.5 billion and accounting for 35 percent of the vegan food market, according to SPINS data. Almond milk remains the most popular choice, but oat milk is rapidly catching up. Since the early days of the coronavirus (COVID-19) pandemic, oat milk has experienced a significant boost in sales. Nielsen Data revealed that oat milk sales increased by 476.7 percent in a single week-long period ending 14 March 2021.
Over 20 different countries across Europe and Asia now sell Oatly products, and cafes and coffee shops favor its Barista blend, in particular. Oatly is now widely available in the U.S., including from large chains such as Starbucks, Kroger, and Walmart.
Oatly was started in 1994 by brothers Rickard and Bjorn Oste. Using technology based on research from Sweden’s Lund University, the company turns fiber-rich oats into liquid food. “It’s just the right time right now for us to make a bigger statement to the whole national audience,” explained John Schoolcraft, Oatly’s chief creative officer. The company opened a $15 million Millville, New Jersey, plant in 2019 to help meet the growing demand, but even now, shortages are frequent, as Covid-related delays have kept a planned second U.S. production from coming online.