- Swedish oat milk company Oatly just received a $2 billion valuation and an investment from Blackstone Group and investors including Oprah Winfrey, Natalie Portman, and Howard Schultz.
- Recent events prove that the rise of oat milk is unstoppable, and that other milks should be prepared to take a back seat.
- Grocery demand for oat milk has skyrocketed since the pandemic began in comparison with demand for dairy overall.
- It's also catching on commercially, with big names like Starbucks, Dunkin', Trader Joe's, and Chobani adding oat milk to their offerings.
- Oat milk has a rich, neutral taste and dairy-like consistency that make it a perfect dairy milk substitute, and it's also one of the most environmentally friendly options out there — setting it up for massive growth in the future.
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The rise of oat milk is inevitable, and the fall of dairy milk has already begun.
A cohort of investors led Blackstone Group and including Oprah Winfrey, Natalie Portman, and Howard Schultz just bought a $200 million stake in Oatly, the Swedish oat milk company that's been taking the world by storm. Oatly's latest funding round scored a valuation of $2 billion.
The rise of oat milk hasn't been stymied by the pandemic. Like other trends including delivery and online grocery, the oat milk trend has only accelerated in the last four months. According to Nielsen data sent to Business Insider, oat milk sales have been up by 289% year-over-year from March to June. While some of these sales may be attributed to a general increase in grocery sales due to the pandemic, it's worth noting that dairy sales for the same time period saw a year-over-year growth of just 25%.
Before the pandemic, consumption of dairy milk was already on decline and consumption of alternative milks was on the rise, with oat milk's upward trajectory the most meteoric among them.
It looks like oat milk, far from being a passing fad, may be here to stay. In the blink of an eye, oat milk has gone from being a fringe alternative to being a fridge staple.
In January, Starbucks added oat milk to its menu, followed days later by Dunkin'. And on July 13, Delish reported that Starbucks rolled out a new line of non-dairy creamers made with almond and oat milk. Chobani's new oat drink has been wildly successful. And Trader Joe's just added oat milk ice cream to its freezers.
Oat milk's remarkable staying power can be mainly attributed to two things: taste and its minimal environmental impact.
Its rich, neutral taste makes it a good substitute for dairy milk. And alongside soy milk, it's the most environmentally friendly option, according to the BBC's environmental impact calculator. It produces relatively few greenhouse gases and requires relatively little water to produce — one-eighth the amount of water that almond milk production uses.
And unlike dairy milk, which can't be digested by those with lactose intolerance (around 65% of the global population), or nut milks, which are out of the question for consumers with nut allergies, oat milk is an accessible option for most people with dietary restrictions.
A vote of confidence from Blackstone and Oprah is a good sign for Oatly, but it's no surprise. The plant-based sector isn't done growing yet, and Oatly is just beginning. The Swedish company is considering going public in the next year or two, according to the Wall Street Journal. In the meantime, it's diving into the American market with the construction of a new Philly-based development lab.
This is an opinion column. The thoughts expressed are those of the author(s).
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