Sowing Wild Oats
David Merrefield - The Robin Report - Oat Milk

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Oat milk is the latest new thing among the rapidly growing number of consumers who are ready to leave behind conventional animal-based milk in favor of \”milk\” made from plants. Some plant-milk adherents may be lactose intolerant or the like, but most conclude that dairy-milk alternatives alleviate ethical issues such as animal treatment and environmental degradation.

There are many forms of alt-milk, such as soy, almond, coconut, rice and cashew milk, but oat milk is the current winner in many consumers\’ minds. Oat milk seems fairly new, but it was developed by a researcher in Sweden in the 1990s. Production of oat milk started in Sweden during that decade under the Oatly brand, but neither the brand nor the product took off for quite a while. More recently, Oatly established a headquarters in New York City and started showing the milk around, at first to coffee shops.

New Production Capacity

Now the time is right for another alternative to dairy, and sales have spiked. Encouraged by that, Oatly built a production facility in Millville, N.J., which opened in April becoming its first in the U.S. Oatly also supplies markets in Europe and Asia, so it\’s not just a U.S. phenomenon.

And according to Bloomberg Businessweek, Oatly has plans to open another plant in Ogden, Utah, next year. At the current rate of consumer demand, the full production capacity of both plants will be insufficient.

That may mean Oatly will need another production plant in the U.S. Yet, Oatly isn\’t the sole supplier to the U.S. market. There are a dozen or so other producers of oat milk in the U.S. Some of those will win popularity and take up the slack. The growing capacity for oat-milk production is all to the good since the manufacturing process is fairly slow, involving cooking a mixture of oats and water, adding enzymes and removing fiber.

Oatly, the brand most aggressively marketed at the moment, is supported by an amusing marketing campaign, such as signs in transit systems saying something like: \”You actually read this? Total success.\” Packaging of Oatly milk is quite quirky, making use of an old-fashioned typewriter font, as does the Oatly website.

Availability is also improving with the product now sold at countless coffee shops and numerous food-retailing stores. Sales of the entire oat-milk category are about $29 million a year as compared to $4.4 million just two years ago.

Fashion Statement?

As is the case with any rapidly growing product, it\’s fair to ask whether demand will continue to grow, plateau at a good level or if the product represents a trendy passing consumer fashion, soon to fade.

I think oat milk is here to stay. That\’s because consumers are increasingly turning away from animal-based food in favor of plantfood and will almost certainly continue to do so. More important, oat milk is pretty good. I\’ve tried Oatly milk, sourced from Whole Foods, and found it to be quite acceptable. It is a heavier beverage than the soy-, rice- and nut-based beverages, and is less sweet. It also has a slightly blue hue.

In short, oat milk approximates whole milk more closely than other such products. Although I prefer dairy milk myself, I can see that many consumers could develop a preference for oat milk. However, oat milk is quite a bit more costly than dairy milk and other milk-like beverages. Oat milk has two or three times the calories of other alt-milk products, but slightly fewer than whole milk.

Those issues may present a minor problem, but there\’s another one: I\’ve used the word \”milk\” throughout this article. In Sweden, it\’s illegal for any alt-milk product to be labeled \”milk.\” That situation was forced by a lawsuit filed by the dairy lobby in Sweden.

Similar efforts are underway in the U.S. and the FDA may require the removal of the word \”milk\” from any product not produced by lactating mammals. The mammal definition has been in use since the dawn of animal husbandry. Many alt-milk producers have already started calling their product by whatever it\’s made from, plus \”beverage.\” Oatly hasn\’t.

I\’m pretty sure that Oatly milk will survive a shift to being called \”oat beverage.\” After all, the backstory of oat milk is pretty good, regardless of what it\’s called. And here\’s the backstory: Why feed cows oats so they can produce milk. Why not just make milk out of oats and be done with it?

There are a good many product producers and retailers who would like to have such a simple and compelling message to put behind what they\’re selling.



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