Oatly, a company that pioneered oat milk, debuts an initial public offering last Thursday on the Nasdaq Stock Exchange. Its shares were priced at $17 per piece.
Oatly raised $1.4 billion, giving the company a valuation of $10 billion.
Increasing global demands for Oatly products drove the IPO. With the company’s debut in the stock market, 84.4 million Oatly shares were offered in Thursday’s IPO under the ticker symbol of OTLY.
Its shares jumped from 19% to close at $20.20.
Behind the world’s largest oatmeal company
Oatly is based in Malmo, Sweden. It is considered the world’s largest oatmeal company producing oatmeal milk.
Its founders, Rickard and Bjorn Oeste, invented the plant-based milk in 1994 while researching a good alternative for cow’s milk to which a fraction of the population is intolerant.
Since lactose intolerance is a global health issue, oatmeal milk became a sought-after product.
However, the worldwide recognition for Oatly began to expand when Toni Petersson became CEO in 2014.
Petersson made several changes in the company’s marketing approach, including rebranding the plant-based milk and targeting the American market where vegetarianism and veganism continue to grow.
He changed the product’s logo and switched the language from Swedish to English, marking the global adaptability of Oatly.
Furthermore, he strengthened the company’s message about how oatmeal milk is healthier and more environmentally friendly than cow’s milk. Likewise, one cup of oatmeal milk has fewer calories, sodium, and cholesterol than cow’s milk.
These strategies were proven effective as consumers loved the plant-based products. The timing was also fitting as more flexitarians promoted plant-based meat and other alternatives.
On top of that, the company attracted high-profile investors like Oprah Winfrey and Jay Z. through Blackstone Group.
Oatly oat milk is also made available to 8,500 retail shops like Target and can be bought online through Alibaba in China.
Moreover, lactose-intolerant customers and those who have gone plant-based can find the milk product on the Starbucks menu.
The monetary gains of plant-based products
In 2020, the global sales of the Oatly were at $18 million, according to Euromonitor. In 2019, the sales peaked at $40 million from $6 million in 2019.
According to Petersson, the pandemic also affected the company’s sales due to the closure of coffee shops.
Nonetheless, the products remained on the shelves of retail stores. Additionally, there was an increase in ecommerce sales that made up for the loss.
As more consumers buy oat-based drinks, ice cream, and yogurt, competitors are on a close watch.
Oatly has four manufacturing plants around the globe, with more that are either still planned or under construction.
Petersson stated that they would use the IPO profits to grow production capacity.
Oat-milk is expected to expand its market worldwide.
It currently holds the second position when it comes to plant-based milk, next only to almond milk, but the rapid progress of Oatly in both marketing and production can potentially revert this sequence.