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While afloat in a wake of controversies ranging from earnings losses to failed attempts to silence competitors, Swedish oat milk brand Oatly is still laser-focused on positioning itself toward a dairy-free future.
Oatly is forecasting a surge of at least 64 percent in revenue this year, the company announced on an earnings call Monday. The news follows reports of more than $60 million in losses in 2020 ahead of its IPO (OTLY) last spring. Rapid expansion and increased shipping costs drove a bulk of the losses.
Annual revenue for 2021 is expected to be at least $690 million, above earlier estimates of $681.4 million. Rising demand across foodservice is leading the spike, Oatly says. The news sent shares of the company’s stock up 6.5 percent, trading a dollar higher than its $16 share price following the IPO in May.
Oatly’s meteoric rise
Oatly, which counts Oprah Winfrey and Jay-Z as backers, recently launched in Starbucks, a move that has led to an uptick in demand, fast-tracking the Malmö, Sweden-based brand’s efforts to ramp up U.S. production.
“I don’t think anybody expected this magnitude of success at Starbucks. But it’s really important for us,” Chief Executive Officer Toni Petersson said on a call with analysts.
Oatly says its Utah manufacturing plant will increase production by 200 percent by the end of 2022 compared to 2020 production. The company is also expanding to a new 280,000 square foot production facility in Texas that’s expected to be operational by 2023.
The Texas plant will be the brand’s third in the U.S. and its largest, expected to produce 150 million liters of oat milk per year.
“The new facility will produce both oat base and finished goods,” a company spokesperson told Food Navigator. “The coupling of these capabilities under one roof will streamline operations, and more importantly, help to reduce our transportation carbon footprint.”
Oatly is expanding its global product capabilities, too, with new factories planned in Singapore, China, and the UK.
Launched in 1990, Oatly became a global sensation only in recent years due in large part to its unconventional marketing efforts, which include clever billboard campaigns and snarky packaging designs. It punctuated its quirky positioning in a controversial Super Bowl LV commercial earlier this year. The 30-second spot featured CEO Petersson singing the praises of oat milk while seated at a keyboard in a field of oats. Fans of the brand were divided on the commercial, with some finding it too weird (the refrain was “wow wow no cow.”).
Oatly owned the gaffe: “The rules of time and space make it impossible to give you back the 30 seconds you just spent watching our Super Bowl commercial,” the company wrote on its website, offering fans a free tee-shirt to let the world know “where you stand on our attempt to promote Toni’s singing skills to a wider audience.”
Not all stunts have been as playful, though. A recent lawsuit aimed at shutting down a competing oat milk brand was dismissed by the courts. Oatly took it mostly in stride and has now turned its attention toward a new target: a trademark effort on the word “barista.”
According to filings with the European Intellectual Property Office, Oatly wants to trademark the term “barista” which it uses on its foodservice oat milk label. A company representative told Green Queen that the filings happened a few years ago.
“Whilst waiting for the decision, Oatly has opposed to others trying to register ‘barista’ as a trademark for plant-based milk-alternative products,” an Oatly spokesperson told The Times. “If we didn’t, that could stop Oatly from using it if it is decided to be a trademark. In the same way, other brands have vigorously opposed Oatly’s registration.”
“Others” includes a company called Skinny Food Co, which uses “Skinny Barista” on one of its products. But Oatly claims it’s not attempting to thwart that brand. Its focus, it says is on displacing dairy and continuing to drive the demand for plant-based milk. It’s currently the best-selling dairy-free milk brand in the $5 billion U.S. market.
“There are a lot of things we want to say,” Petersson told Yahoo Finance earlier this week. “But we are positioned to take a global leading role in driving the plant-based revolution forward. We haven’t even started to scratch the surface yet and the runway is massive.”
Lead image courtesy of Oatly.
Correction August 22 2021: Oatly’s barista filings are not recent.