Swedish oat drink company Oatly [OTLY:US], founded in 1994, went public on Nasdaq on May 20 at a valuation of over USD10bn, pricing its IPO at USD17 per share, as reported by Jiemian.com on May 21. Oatly listed its shares at the high end of its price range, hinting at an optimistic future for the company. In its IPO prospectus, Oatly reported a USD421.4m revenue in 2020, a 106.5% increase from 2019. Oatly’s largest shareholder is a joint venture between Verlinvest and China Resources (CR), a Chinese state-owned holding firm.
The successful IPO of Oatly reflected a trend of plant-based food consumption in recent years. In the US, the plant-based retail market experienced a 27% growth in 2020 despite the ongoing pandemic. Switching from traditional dairy milk to plant-based milk like Oatly has significant benefits to the environment. For instance, the greenhouse gas (GHG) emissions of a liter of oat milk is 0.34kg, while a liter of cow milk produces around 3kg of GHG. Oats also require 80% less land to grow compared to what cow feeding requires.
Oatly entered the Chinese Mainland market in 2018, one year after entering the US market, and has since expanded rapidly. Two years later, Oatly now has over 9,500 outlets, an increase of more than 450%, and 21% of its 2020 mainland sales come from e-commerce channels, including Alibaba’s [BABA:US] Tmall, Taobao, and JD.com [JD:US]. Oatly is likely to continue its growth in the Chinese Mainland, especially given its partnership with Starbucks [SBUX:US], which has more than 4,700 stores within the country. However, it should also be noted that the Chinese plant-based milk market is still dominated by Chinese brands like Yangyuan Beverage [603156:CH]. Seeing the growth of the plant-based food market, big Chinese dairy companies like Yili Group [600887:CH] are also launching their plant-based milk and yogurt products, making the market more competitive than before.