The stock, which priced at $17 per share, opened at $22.12 and soared in its debut 30%. Shares trade on the Nasdaq under the symbol OTLY. Morgan Stanley, J.P. Morgan and Credit Suisse led the offering.
The Swedish company that uses oat milk instead of dairy in coffee creamers, yogurt and ice cream, has taken the dairy aisle by storm with splashy ads, star-powered backers like Oprah Winfrey and mainstream chains like Starbucks adding it to menus. And it came in even hotter this week with its U.S. initial public offering.
The company, backed by a slew of noteworthy investors and celebrities, including The Blackstone Group, former Starbucks CEO Howard Schultz and actress Natalie Portman along with Winfrey, raised $1.4 billion in its IPO on Wednesday, Oatly said in a statement. And industry insiders say the savvy branding and environmentally friendly component coupled with consumer demand for dairy substitutes could be why the brand is on its way to cash cow status.
"It’ll be a home run for those looking for a dairy alternative, just like we’ve seen with meat alternatives. Soy and almond milk are no longer the mainstays," Jason Kaplan of international restaurant and hospitality consulting firm JK Consulting told FOX Business.
Indeed, U.S. oat milk sales increased 138% in the past year, according to data from Nielsen. What's more, nearly 50% of consumers globally say they want to eat fewer animal-based products, though they are not following a strict vegan or vegetarian diet, according to data from Euromonitor International’s Lifestyle Survey This has been a significant driver of the plant-based market.
Oatly plays up its environmentally friendly component in its marketing strategy, touting how its products are made without greenhouse-gas emissions, unlike cow’s milk. And its IPO comes as the rise of plant-based milk continues to infiltrate mainstream grocers and coffee chains, similar to how fake meat alternatives from the likes of Beyond Meat and Impossible Foods have catapulted in popularity.
Nestle earlier this month launched a pea-based alternative milk brand, Wunda, to compete with the likes of Oatly and Danone’s plant-based foods brand Alpro with dairy-free items like yogurt to come. And Greek yogurt giant Chobani debuted an oat milk cold brew coffee in January.
Starbucks started selling oat milk at all of its locations across the country in March following a successful test run in 1,300 regional coffee shops. The dairy-free stuff was so well received, the chain faced a shortage, customers tweeted out in March. And competitor Dunkin’ released its Oatmilk Latte in stores nationwide last spring.