Oatly files for IPO: ‘We have torn down the conventional corporate approach to brand building’

By Elaine Watson contact

- Last updated on GMT

Oatly: ‘We have a bold vision for a food system that’s better for people and the planet’ (picture credit: Oatly)
Oatly: ‘We have a bold vision for a food system that’s better for people and the planet’ (picture credit: Oatly)

Related tags: Oatly, oatmilk, plant-based milk, plant-based dairy

Oatly posted a net loss of $60m in 2020 on sales up 106.5% year-on-year to $421.4m, reflecting its continued investment as it ramps up production and aggressively expands into new markets, according to a prospectus published ahead of its initial public offering (IPO), which says it lost $35.6m in 2019, and “may incur significant losses for the foreseeable future.”

The Malmö, Sweden-based company - which is filing for an IPO​ in the US and says it may consider adding a listing in Hong Kong over the next two years - launched its first products under the Oatly brand in 2001, and has since built a presence in more than 20 countries.

In the Chinese market – which it entered in 2018 via the specialty coffee and tea channel, Oatly has been able to scale rapidly via an e-commerce partnership with Alibaba and an exclusive partnership with Starbucks in 4,700+ stores, said the company, which says it has “a significant opportunity to expand into new international markets.”

Four years after entering the US market, ​Oatly products can now be found in >7,500 retail shops and 10,000 coffee shops in the United States (where it generated revenues of $100m in 2020), and more than 32,000 coffee shops and 60,000 stores across the world (as of Dec 31, 2020).

‘We have cultivated a loyal consumer base that is highly aligned with our ambitions’

oatly teeshirt

While there are plenty of other players in the plant-based arena – including multinational CPG companies and leading dairy companies – Oatly’s inhouse creative team has built an especially loyal consumer base through engaging and sometimes provocative ads, notes the prospectus:

 “We have torn down the conventional corporate approach to brand building and have developed a voice that is human, compelling and honest… Our advertisements are bold and eye-catching, meant to drive conversation among consumers, while challenging norms and outdated industry practices.

Through the efforts of our authentic and award-winning in-house creative team,” ​says Oatly - which generated a lot of buzz with a polarizing Super Bowl commercial featuring its CEO singing 'Wow, No Cow' in a field – “we have cultivated a loyal consumer base that is highly aligned with our ambitions."

Oatly believes that "plant-based dairy, especially oat-based dairy, will continue to experience significant growth driven by multiple secular tailwinds:

  • Sustainability and health as leading factors driving behavioral change and consumer choice
  • Current generations increasingly seek out brands that connect with their core values
  • Growing consumer demand for oat-based dairy."

Production capacity ‘a major constraint on growth’ 

To date, says Oatly, lack of production capacity has been “a major constraint on our growth, and we have made substantial investments to scale our production capacity and address supply shortages.”

Oatly’s New Jersey facility – which opened in May 2019 – has helped the company meet explosive demand​​​ in the US market, where oatmilk recently overtook soymilk to become the #2 player in the plant-based milk category behind almondmilk.

However, a second facility in Ogden Utah (producing oat base and finished products), which was scheduled to open last year, is only now coming online for Oatly, and should be fully operational soon, said the company.

“Three additional facilities in Singapore, Maanshan (China), and Peterborough (UK), are currently under construction or in the planning stages, and we continue to expand capacity of our existing facilities.”

The company plans to list on the Nasdaq under the ticker 'OTLY'. The offering will be lead by Morgan Stanley, JP Morgan, and Credit Suisse.

oatly ice cream

While Oatly has launched a series of brand extensions in recent years, moving into frozen desserts, oatgurt, spreads, and oat-based whipping cream, oatmilk accounts for the vast majority of it sales.

On average, claims the company, “a liter of Oatly product consumed in place of cow’s milk results in around 80% less greenhouse gas emissions, 79% less land usage and 60% less energy consumption.”

  • In the US, retail sales of oatmilk rose 219.3% to $264.1m (SPINS 52 wks to Jan 204, 2021)
  • In the UK, retail sales of oatmilk were up 98% to $181m (IRI Infoscan)
  • In Germany, oatmilk’s market share of sales in the retail plant-based dairy category increased from 23% for the rolling four week period ended Jan 2018 to 60% for the rolling four week period ended January 3, 2021 (Nielsen)
  • In Sweden, oatmilk is the largest category in the total plant-based milk retail market, with a 72% market share for the rolling four week period ended January 3, 2021

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