Oatly brewing plans for UK factory as dairy-free demand soars

The plant-based milk brand expects to double British sales this year.

Oatly’s sales are expected to double in the UK this year (Oatly)

Alys Key

May 28 2019 10:45 AM

Oatly is eyeing the UK to be the location for another factory as it scrambles to keep up with soaring demand for vegan milk alternatives, the company’s chief has told Press Association.

The oat milk brand, founded in Sweden in the 1990s, has seen rapid growth around the world as vegan and environmentally conscious consumers switch to the product.

Now the UK is in the running to be the site of its third European production facility, following the opening of a factory in the Netherlands this summer.

In an interview with PA, Oatly’s chief executive Toni Petersson said: “We’re planning for more factories and we’re looking at the UK, because it’s such a big market for us. I think we should have something here.”

Toni Petersson, CEO of Oatly

He said the move would be motivated by the “amazing” uptake of Oatly in the UK and was not linked to Brexit.

Last year Oatly brought in UK revenues of £18 million and it expects to more than double that to £40 million this year.

At least 3,500 coffee shops in the UK now offer Oatly. After making its mark in London, the brand has seen significant pick-up in Glasgow, Bristol and Manchester in the last 12 months.

It became so popular last year that there were shortages of the product in several markets, including the UK.

Mr Petersson admitted the supply issues were still not fully resolved, but had been eased by the construction of new factories in the Netherlands and New Jersey. Another two will follow next year in Utah and Singapore.

He said at the current rate of growth, a third European site will be needed by 2022. Previous new factories have created up to 50 jobs.

The company is independent but its expansion has been backed by a number of investment funds.

Mr Petersson said the brand is not likely to sell out to a multinational food and beverage company, but could eventually go public.

“We’re not part of any structure. I think that’s obviously the preferred way,” he said.

“We could potentially even IPO, if it gets that big.”

Commenting on the product’s popularity, Mr Petersson said: “We’re tapping into this whole global movement, this ideology of making this world better.

“It is driven by young people who are concerned about what’s going on and understand that everybody needs to pitch in in order to make things better.

“I think that movement has grown really, really strong in the last two years.”

He also argued that production of oats is more sustainable than the two main rivals, soy and almond.

“I don’t see any other crops that can compete with oats,” he said. “You can grow it anywhere in the world, in every continent, and it’s in a sustainable way.”