Would investors take a big gulp of the Oatly IPO?

A $200 million investment last July valued Oatly at $2 billion, but it is by no means a profitable company.



Oprah-backed Oatly Group of Malmo, Sweden is on track to claim the title as the biggest plant-based food company IPO of 2021. The vegan food and drink maker has scheduled its initial public offering for later this week and will list its American depositary shares (ADS) on the Nasdaq Stock Market using the ticker “OTLY.”

According to The Motley Fool, Oatly stock has been priced in the rage of $15 to $17 per share, managed by Morgan Stanley/JP Morgan. It will follow other plant-based companies that have made blockbuster market debuts in recent years, most notably Beyond Meat. Oatly is also the only plant-based food company to clanker on The Big Board.

Oatly: An alt-milk star

Oatly, the Swedish company pioneered the oat milk category way back in the 90s and reinvented itself as a global plant-based food company in 2013. It was founded by food scientist Rickard Öste and his brother Bjorn Öste. Oatly’s oat milk is made by milking oats through a process that sounds eerily similar to the production of almond milk. Enzymes are added to raw oat kernels to liquefy them into what we call oat milk. Once the oats are broken down, rapeseed oil is introduced as an emulsifier, along with a dash of other things such as iodized salt, calcium phosphates, calcium carbonate, and vitamins.

Oatly IPO

Although Oatly launched its creamy oat milk in Sweden in 1994, it tip toed to its debut in the United States less than five years ago. Once it hit the shelves on our shores it didn’t take long for Oatly to taste success. By 2019 Oatly was available in 7,000 stores and coffee shops across the nation including retailers like Target and Whole Foods. Among its shareholders is a group of high-profile investors including Blackstone, Natalie Portman, Oprah Winfrey, Jay Z’s entertainment company Roc Nation and former Starbucks chief executive Howard Schultz.

The fashionable Swedish alt-milk brand says its mission is to turn what people eat and drink into “moments of healthy joy without recklessly taxing the planet’s resources.” Today its vegan food and drinks, including milk, ice creams, yogurts, lattes and spreadable cheeses are available in more than 50,000 locations in 20 countries.

Will Oatly IPO help face impending headwinds?

A $200 million investment last July valued Oatly at $2 billion, but it is by no means a profitable company. Its losses increased to $60.4 million in 2020 from $35.6 million in losses in 2019. The alt-milk star’s revenue more than doubled, to nearly $421.4 million. In 2020 it had 792 employees. It has four factories, including two in the United States, and an additional three planned or under construction in Singapore, China and the United Kingdom.

Oatly IPO NASDAQ Initial Public Offering

It is operating in an ever-expanding dairy alternatives space, competing with rich-coffered rivals such as Danone, whose sells Alpro and Silk brands sell a range of dairy alternatives made from almonds, soya, oats, coconuts, and cashew nuts.

Ben & Jerry’s, owned by Unilever, offers dairy-free versions of its ice cream range and is targeting a five-fold increase in sales of plant-based meat and dairy alternatives by 2027.

Earlier this month Nestlé announced the launch of a pea-based milk alternative called Wunda. The product will be launched in France, Portugal and the Netherlands, until it further expands across other European markets. It will compete directly against Oatly, which makes most of its revenue from Europe.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

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