Located in Peterborough and creating over 200 jobs, Oatly’s new factory is set to launch in Q1 2023.
The facility will be able to produce 300 million litres of oat drink per year at launch, with the capacity to grow to 450 million litres - making it one of the largest plant-based dairy factories in the world.
The Malmö-based company, currently available in more than 20 countries globally, said the UK factory is part of the wider initiative to build factories fit for the future, with efficient use of resources and minimal negative impact on the planet.
Oats will be sourced locally across the UK and the factory will supply the UK market. The firm is aiming to use 100% renewable energy, and decrease its energy consumption, water consumption and waste by 75% each at the factory, by 2029 compared to Oatly’s environmental footprint in 2019.
Johan Rabe, Chief Supply Chain Officer, at Oatly said: “We look forward to supplying the UK with more oat drink - we’re even more excited to do it in a sustainable way. Like everything we do at Oatly, we’ve ensured that sustainability is core to our factory planning. Everything, from the sourcing of our oats, to the production of our product range specifically designed for humans, has sustainability at the heart of it. Even as we strive to grow one of the biggest plant-based dairy factories to its full capacity, this will still be our top priority.”
Is cutting dairy really the best way to reduce your carbon footprint?
Much of Oatly’s appeal is based on its eco-credentials. For example, according to climate footprint data, the company claims its Oatly Barista Edition sold in the UK generates about 70% less CO2e than British cow’s milk.
Milk, however, only accounts for only 2.8% of the UK’s carbon footprint, according to Dairy UK. And while the Food and Agriculture Organization of the United Nations estimates that 14.5% of all global emissions come from the meat and dairy industries, in the UK the total net GHG emissions attributed to all agriculture account for a relatively low proportion (about 10%) of the country’s total of GHG emissions, according to the National Farmers' Union.
Cutting dairy out of your diet is therefore not the best way to reduce your carbon footprint, according to Dairy UK. When comparing UK dairy emissions from other sectors it says dairy is ‘far from the driving force behind climate change’. The body claims that since 1990 the greenhouse gasses linked to milk have fallen by 24% and that a single pint of milk produce 0.7kg of Co2 emissions - the equivalent of driving 1.7 miles in a car.
"Just one seven-hour flight has roughly the same carbon footprint as consuming milk for one and half years,” it says, adding "like all foods dairy does have a carbon print, but claims that cutting dairy out of your diet will drastically alter your carbon footprint simply doesn’t add up.”
Cow's milk further boasts unrivalled and unique health benefits, according to the industry association. It has a high protein quality and contains all nine essential amino acids. It's also cheaper than Oatly's milk (around 80p a litre compared to roughly £1.85 for the oat alternative).
‘An easy way to make an environmental difference’
Oatly, however, remains confident UK consumers will choose its oat milk as an ‘easy way to make a difference’.
“Most of the world’s scientists agree that in order to reduce our overall climate footprint, we need to consume more plant-based food and drinks,” said Oatly’s UK general manager Ishen Paran. He told FoodNavigator there isn’t ‘a single or best way’ for individuals to reduce their emissions’.
“We have to do a lot of different things, including reducing our meat and dairy intake, and we’re confident that people in the UK as well as the rest of the world are aware of that.
“Scientists warn that to prevent the worst impacts of climate change we must hold global temperature increase to 1.5 degrees. Currently, we’re nowhere near achieving that. We all have a common challenge in fighting climate change, so we have no concerns around how people choose to do that, as long as they do their best to lower their climate footprint. If it’s a win for the planet, it’s a win for all of us.”
What about oat milk’s health credentials?
On top of the arguments over Oatly’s environmental claims, there’s been debate about its ingredients, with one nutrition writer concluding its oat milk has about the same blood sugar impact as Coke.
Oatly said it will not be altering any of its recipes or processes at its new UK facility. “We put a lot of thought into each of our ingredient choices and make them with both the health of the planet and human health in mind. Our products, ingredients and processes will remain consistent in all our production sites across the globe, as it’s what makes Oatly products so unique and amazing,” said Paran.
Desire for plant-based milks has risen sharply in the UK in the last decade, as consumers seek to cut down on diary for environmental and ethical reasons.
Sales of dairy alternatives rose almost 20% in 2020, according to Kantar, and the market is now worth £650m in the UK. It is estimated milk alternatives still only occupied a 4.4% share of the total liquid milk category in the UK in 2019. Oatly would not reveal what share of the total liquid milk category it is targeting. Paran said: “Our mission is to make it easier for people to go plant-based, for the sake of the planet. That’s what we’re aiming for. And you can’t put a target on that.”
The Blackstone controversy
Oatly disappointed many of its diehard fans after securing $200m in new funds last year from an investment group led by Blackstone – a name muddied by alleged ties with deforestation in the Amazon. What is Oatly’s latest message to any of its customers concerned about the Blackstone investment?
Paran said: “Blackstone’s investment allows us to further the plant-based movement, and building new factories is definitely part of it. Increasing our supply levels means we’re making it easier for consumers to have access to our products and live healthier and more sustainable lives by choosing plant-based foods.”
The news of the new Oalty facility was welcomed however by the Vegan Society in the UK. A spokesperson told us: “Oatly’s decision to build an alternative milk factory in Peterborough not only shows how much demand there is for plant-based milks but also how far the vegan movement has come in recent years.”
It estimates the plant milk market in the UK accounts for 15% of the total European market and value is set to double between the years 2019-2025, from £226 million to £497 million.
“Other research shows that 1 in 3 people, including non-vegans, regularly buy plant-based milks, including oat, coconut and almond.
“As well as creating hundreds of new jobs, which will be beneficial to the local area, the UK could become home to one of the largest plant-based dairy factories in the world.
The Vegan Society is pleased to see the growth in demand for sustainable and compassionate alternatives to dairy milk.”