Oatly Returns to Growth in North America As It Navigates Iran War Headwinds

Swedish oat milk giant Oatly built on a successful 2025 with 15.6% hike in revenues in Q1 2026, recording its first period of growth in North America in more than a year.

Oatly’s Gen Z-targeting, taste-first playbook is “beginning to gain traction” in North America, where the company saw revenues increase for the first time since 2024.

The oat milk maker recorded a 3.8% hike in year-on-year sales in the region in Q1 2026, bucking the decline of the overall plant-based milk category.

Globally, the company’s revenues reached $228.3M in the first quarter of the year, a 15.6% rise from the same period 12 months ago, with sales volume up by 5.6%.

Oatly’s gross profit swelled by 22.5% to $76.3M, while its net loss narrowed slightly by 3%, totalling $12.1M. The firm’s adjusted EBITDA for the January-to-March period – revenue excluding all non-operational and one-time expenses – stood at $5M, compared to a loss of $3.7M in Q1 2025.

It comes on the back of Oatly’s first full year of profitable growth as a public company, thanks to a strategy that pits its oat milks as “an experience canvas for the beverages market”, rather than an alternative to dairy, according to COO Daniel Ordonez.

“[We’re] working with customers to renovate their menus and shelves to be more relevant, more provocative, and more on trend with today’s consumer,” he told investors in an earnings call. “Taste and health define a clear high ground for the new generations, in particular for this category. We have also adapted how we communicate to them.”

Oatly outsells plant-based milk category in both Europe and US

Oatly continued its ascendancy in its home region, with revenues in the Europe and International segment expanding by 27% to reach $136.8M, driven largely by volume growth of its barista oat milks. Most of this (80%) came from the retail channel, where its 16% uptick in sales outpaced the entire oat milk (9%) and plant-based milk (6%) categories.

In North America, the company’s sales hit $62.2M in Q1 2026. Here, too, the retail channel makes up 65% of its sales, which were up by 10% in the first three months of the year, in contrast to a decline of 2% for non-dairy milk and 3% for oat milk overall. In fact, excluding its largest foodservice customer, Oatly’s revenues in this region swelled by 12.3%.

“We are very encouraged by how things are developing in the US,” said Ordonez. “What we see happening in coffee and foodservice – we’re spending a lot of time with the teams there, and I’m very encouraged to report the progress that you see. For us, this is important because it’s the best marker for category momentum.

“This channel is where habits are created. Excluding the largest customer, this channel already represents over one-quarter of the segment’s revenue and has been growing in double digits for some quarters now. When we look ahead, we only see opportunities.”

However, Oatly’s financial performance in the Greater China segment dipped 2% in the quarter, totaling $29.3M. Its volumes were also down by 8.8%, with foodservice the primary channel. The company has been conducting a strategic review after years of weak performance in the region, which it plans to complete this year.

“We continue to evaluate a range of options, including a potential carve-out, with the goal of accelerating growth and maximising the value of the business,” said CEO Jean-Christophe Flatin.

“The general context and the price pressure in the foodservice business continues. At the same time, I am pleased to report that the strong development of the retail channel accelerated, doubling in Q1 year-over-year and representing already close to a third of the segment’s revenue.”

Oatly eyes Gen Z with fibermaxxing, matcha and cold foam

Last year, the oat milk maker suggested that fibre was “coming for protein’s crown”, and began capitalising on the fibermaxxing trend by highlighting its fibre credentials on-pack.

“Many global health authorities estimate that people have a fibre deficiency of about 10g per day. As a company that is rooted in science, our visionary founders have historically advocated for the benefits of fibre in people’s diets,” said Ordonez. “What you see here is just the first step, and you should expect to see more from us in the near future.”

This fits neatly into what younger generations are looking for. In the US, 60% of Gen Zers are interested in fibre-rich food and drink products, and 62% say the same in the UK. Social media – where Oatly is deploying most of its brand investment – is fuelling this trend, with 42% of British Gen Z users seeing more fibre content on their feeds.

Oatly’s new product launches have focused on new taste experiences. Over the last few months, it has rolled out barista oat milks in churros, coconut and popcorn flavours – the latter will come to the US this year, as will the ready-to-drink matcha latte unveiled in 2025.

Matcha has remained one of the beverage space’s hottest trends, and this market is being spearheaded by Gen Z. Oatly’s entry into the category was shrewd – nearly half (45%) of its matcha latte purchases came from Gen Z and Gen Alpha in the UK.

“We’re expanding the matcha range with the addition of a strawberry flavour, which is the most popular combination in foodservice. This will enable customers to create an even wider range of drinks,” said Ordonez.

Moreover, the company has begun rolling out the cold foam milk it teased earlier this year, a nod to another omnipresent trend in cafés across the world. “Our Cold Foam Barista has already reached the menu of many of our top customers. It can be added on top of any beverage, hot or cold,” he revealed.

“Plant-based cold foam options weren’t widely available in the market thus far. This is a breakthrough product that delights consumers and elevates the experience for our food service customers. Taste is a new platform for Oatly and for the category. This is not just random innovation.”

Plus, Oatly has been leaning on the fashion industry playbook with seasonal recipe ‘lookbooks’ and a Future of Taste trend report to court Gen Z. It appeared on the runways of the Milan Fashion Week through a partnership with Avavav, pairing its Autumn/Winter 2026 collection with three signature drinks.

Middle East conflict creates uncertainties as Oatly maintains 2026 outlook

Oatly reaffirmed its full-year forecast for 2026, expecting a constant currency revenue growth between 3% and 5% and an adjusted EBITDA total of $25-30M.

This comes as the company navigates the supply chain challenges caused by the ongoing US-Israel war in Iran, whose impact “is already visible in our costs from March onwards and brings further uncertainty for the rest of the year”, Flatin noted.

“Even if to date we don’t see a demand impact from the Middle East conflict, we all know how volatile and dynamic the current environment is and remains,” he added. “Therefore, […] we choose to be conservative and maintain our current outlook for the moment, and we will, of course, continue to monitor the conditions closely.”

Expanding on the full-year guidance, the CEO stated that Oatly has a number of energy and raw-material contracts at its European factories, alongside an electric truck fleet and several other structural advantages.

“On the other hand, the Middle East conflict has brought impacts into our P&L [profit and loss statement] from the month of March onwards, and these costs are specifically fuel price related,” he explained. “The biggest one, shipping and logistics cost, both in Europe and International as well as North America. The second noticeable one is packaging cost worldwide.”

He added: “When we are to review the full-year outlook […], it means we have to evaluate both the potential full-year cost impact of the conflict on one hand and our ability to mitigate that on the other hand.”

Charting its 2026 journey, Oatly CFO Marie-José David said: “As we stand today, we anticipate Q2 to be lower than our first quarter, with visible negative impact from the Middle East conflict combined with a strong brand investment season. As we move through the year, we expect performance to improve meaningfully in the back half.”