Oprah-backed Oatly plans IPO as oat milk continues to drive non-dairy market

The Swedish oat milk company could reportedly raise $1 billion

Oat milk could be the next cash cow.

A source familiar with Sweden-based Oatly, which uses oats to make vegan products like milk, yogurt, and cheese, tells FOX Business that reports of a potential IPO are accurate.

The company, backed by the likes of Oprah Winfrey, Natalie Portman, and rapper Jay-Z’s entertainment company Roc Nation, could raise $1 billion and has reportedly hired Morgan Stanley, JP Morgan Chase and Credit Suisse to advise on the IPO, according to CNBC. Blackstone Group last July led a $200 million round of funding for Oatly.

Oatly did not return a request for comment.

A source familiar with Sweden-based Oatly, which uses oats to make vegan products like milk, yogurt, and cheese, tells FOX Business that reports of a potential IPO are accurate. (Oatly)

IPO plans for the brand come as the popular nut milk continues to infiltrate mainstream grocers and coffee chains. Starbucks announced in December it would roll out oat milk at all of its locations across the country beginning in spring 2021 after a successful test run in 1,300 regional coffee shops. Dunkin’, meanwhile, made its Oatmilk Latte available at stores nationwide in the spring.

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And more investors are getting behind the plant-based beverage, made from whole oat grains with a creamy texture that mimics milk. Meghan Markle invested in oat milk latte startup Clevr Blends, her first public startup investment. Winfrey also is a fan, giving the brand a shoutout on Instagram recently.

And consumers are increasingly seeking it out at grocery stores. Indeed, oat milk sales are up nearly 223% for the 52-week period ending Nov. 28, 2020, compared with the previous year, according to the most recent stats available from Nielsen. To compare, soy milk is down 2.7% while conventional milk products increased by 8.2% during the same time period.

Oatly, specifically, seems to have attracted a loyal consumer following -- so much so that shortages of some of its blends in previous years have led to price gouging online. When Oatly sold out of its Barista Edition Oatmilk in 2019, a seller on Amazon posted a 12-pack of the non-dairy milk cartons for a staggering $226 (a 32-ounce carton retails for $4.99).

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“When shoppers are buying non-dairy milk, 70% have a specific brand in mind (higher than the industry average of approximately 65%),” Nikhil Sharma, vice president of North America Consumer Analytics at Nielsen, told FOX Business in a statement.

Around 93% of meals or snacks that include milk alternatives are consumed at home, according to research from NPD Group. The non-dairy ingredient has already made its way into other snack food categories, from yogurt to ice cream and cheeses, and analysts say consumers will likely see more product categories this year as the public continues to eat more meals at home during the pandemic, and seek out better-for-you options.

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“The top reason why people choose any kind of alternative — whether it's a milk or meat alternative — is they feel it's a healthier option. It doesn’t mean they’re necessarily looking for something that’s healthy; they feel like they're making a better choice," Darren Seifer, a food industry analyst at NPD Group, said.