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Oat milk maker Oat is about to IPO

Private equity is at the table, as is Oprah and Jay-Z. Food giants like Nestle are scrambling to step into the door. It has an impact on the climate. There is even a geopolitical roar.

This unlikely focus of excitement Autry, milk replacer producer Made from oats that can be poured into cereals or foamed for cappuccino. For the first time this week, Swedish company Oatly will sell its stock to the public, offering $ 10 billion worth of value and demonstrating changing consumer preferences that are reshaping the food business.

Delicious and healthy food is no longer enough. More people want to make sure that ketchup, cookies, or macaroni and cheese aren’t helping to melt the polar ice cap. Food production is a major factor in climate change, especially when animals are involved. (Cow burps methane, a powerful greenhouse gas.) Milk replacer Made from soybeans, cashew nuts, almonds, hazelnuts, hemp, rice and oats, they are skyrocketing in response to the surge in demand.

“We have a bold vision for a better food system for people and the planet,” Oatly declared in its prospectus. The company’s stock will begin trading in New York on May 20th.

To justify its bubbling reputation, Oatly needs to convince investors that there is already a lot of competition and that large food conglomerates can dominate the market, which is just beginning to develop formidable resources. Nestlé, the world’s largest producer of packaged foods, unveiled its own milk replacer made from peas this month.

Oatly uses package art and logos to grow an emerging image — Oatly! — It looks hand-painted. It advertises as “milky, but made for humans.” However, the company has a history of more than 25 years and is backed by a large amount of money.

The major shareholder is a partnership between a Chinese government-owned entity and Verlinvest, a Belgian company that invests a portion of the wealth of the family that controls the Anheuser-BuschInBev beer empire. Blackstone, a huge private-equity fund, owns just under 8% in Autory.

Heavyweight investors are interested in confirming that vegan food has become mainstream, but it can also make it difficult for Autory to maintain its dissident image. After Blackstone led a $ 200 million investment in Oatly last year, the company faced a backlash from some fans. Stephen A. Schwartzmann, CEO of Blackstone, Was a strong supporter of former President Donald J. TrumpClaims that climate change is a hoax.

Mr Autoley said he hopes Blackstone’s investment will encourage other private-equity funds to “allocate $ 4 trillion to green investment.” Blackstone backing It also helped give Autory’s trust on Wall Street. And there were no signs that Blackstone’s involvement slowed Oatly’s sales, doubling last year.

The image of Autory has benefited from a roster of celebrity investors such as Oprah Winfrey, Natalie Portman, Jay-Z’s Roc Nation company, and former Starbucks CEO Howard Schultz. Everything has something to do with plant-based or healthy living exercises.

Oatly declined to comment, citing regulations restricting public offerings prior to going public.

Oat milk is part of a larger trend towards foods that mimic animal foods. So-called food technology companies like Beyond Meat have raised over $ 18 billion in venture funding, according to industry-tracking PitchBook. In the United States, plant-based dairy products, including brands such as Ripple (made from peas) and Moara (banana), raised $ 640 million, more than double last year.

In the United States, milk replacers such as oat milk and rice milk make up the $ 2.5 billion industry and are expected to grow to $ 3.6 billion by 2025, according to Euromonitor. Globally, a $ 9.5 billion industry is expected to grow to $ 11 billion.

Once a niche market, alternative milk has become as American as baseball. This season, a frozen version of the soft serve ice cream is on sale at Yankee Stadium in Wrigley Field, Chicago, and at Globe Life Field in Arlington, Texas, where the Rangers play.

Oatly’s revenue surged from $ 204 million in 2019 to $ 420 million, but the company reported a loss of $ 60 million as it invested in new factories, marketing and new products. Oatly sells chocolate and other flavored milk drinks, as well as yogurt, ice cream, cream cheese, and even creme fraiche dairy-free alternatives.

Oatly was founded in 1994 by Swedish food chemistry and nutrition professor Rickard Oste and his brother Bjorn Oste. They worked in Malmö, Sweden, and developed a method for enzymatically processing oat and water slurries to create a natural sweetness and milky taste and consistency.

After Verlinvest bought a majority stake in a joint venture in 2016, the company’s growth has gone too far. China resources, A state-owned conglomerate, holds a huge number of shares in cement, power generation, coal mining, beer, retail and many other industries. With new funding, Oatly expanded in Europe and began exporting to Europe. America And in China, many cannot tolerate milk. The involvement of China Resources has undoubtedly helped open the door to the Chinese market. According to Oatly, Asia, primarily China, accounted for 18% of sales in the first quarter of 2021 and is growing at a rate of 450% annually.

In Europe China’s investment in strategic industries Like car, battery, robotics. The European Commission has begun building regulatory barriers to companies with financial ties to the Chinese government. But so far, no one has expressed fear that China will dominate the world’s oat milk supply.

To be on the safe side, Oatly’s prospectus has the option of listing in Hong Kong in the event of foreign ownership issues in the United States.

The market potential for alternative dairy products is not lost to major food producers. In the documentation provided, he acknowledged that he was facing fierce competition, including “multinationals with far more resources and operations than we do.”

This includes Unilever, a British consumer goods manufacturer. Unilever aims to generate € 1 billion, or $ 1.2 billion, in revenue by 2027 from plant-based meat and dairy alternatives such as Hermann’s vegan mayonnaise and Ben & Jerry’s dairy products. -Free ice cream. Unilever has not announced plans for milk replacers.

Some industry analysts claim that Oatly’s size has an edge over these giants and is more innovative than the corporate giants. Patrick Müller-Sarmiento, head of consumer goods and retail at German consulting firm Roland Berger, says food startups are “young and fast.”

The established food giant is also facing a tougher time than newcomers who convince consumers that they are sincere in saving the planet, an important part of oat marketing.

Müller-Sarmiento, former CEO of Real, a large German supermarket chain, said meat and dairy alternatives are fine to compete with Big Food for valuable retail shelf space. Said. “Retailers are urgently looking for new products,” he said.

It was then that it simply acquired Autory, just as Nestlé and Unilever preyed on hundreds of other brands. But they will have a hard time justifying the bold $ 10 billion price that Autory has set as a public offering benchmark.

Nestlé’s answer was to develop its own milk replacer, Wunda. It will be announced by the company this month and will initially be sold in France, Portugal and the Netherlands. Wunda, made from a variety of yellow peas, is richer in protein than oat milk.Some nutritionists say oat milk and others Dairy alternatives It is a poor alternative to milk due to its low protein content.

Stefan Palzer, Nestlé’s chief technology officer, has raised the issue for those who say that large companies cannot move as fast as many foodies in Sweden. Nestlé’s young team developed Wunda in nine months, including a three-month market test in the UK, Palmer said in an interview.

Nestlé was able to adapt its existing production facilities to create Wanda, rather than building a new factory that Autory would have to do. According to Parzer, the company already had plant scientists who could identify the best types of peas and food safety experts who could navigate the regulatory approval process.

“We were able to hire an expert who wanted to get involved in the project,” said the Wunda developer. “It allowed them to move at this speed.”

Nestlé already has a dairy-free version of Nesquik Drink and Haagen-Dazs Ice Cream, and uses the Starbucks brand to sell coffee creamers made from a blend of oat and almond milk.The company is making great strides towards development Alternatives to almost all types of animal products.. Next Frontier: Fish. Nestlé has begun selling a tuna alternative called Vuna and is working on the development of scallops.

“It’s a great opportunity to combine health and sustainability,” said Parzer, a plant-based alternative to milk and meat. “It’s also a great opportunity for growth.”

Oat milk maker Oat is about to IPO

Source link Oat milk maker Oat is about to IPO

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