Oatly’s loss of market share is good for buyers: Quartz

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Oatly’s loss of market share is good for buyers: Quartz

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Oatly is no longer the star of the oatmilk scene. Planet Oat, a low-priced alternative, now accounts for 37% of the U.S. oat milk market, while Oatly accounts for 22%, according to data from IRI, a Chicago-based market research firm. .

When Oatly, which is based in Sweden, first launched in the US in 2016, the company had the market largely to itself. But its rapid growth and limited supply have attracted rivals. Now a handful of oat milk brands including Planet Oat, Califia Farms, and Mooala are available on grocery store shelves.

Losing market share may be bad for Oatly, but competition is good for consumers. Oat milk just got cheaper: The average price of a half-gallon carton of oat milk has dropped from $ 5.68 in 2017 to $ 4.44 now. The price of a half-gallon carton of Oatly is $ 5, while for Planet Oat it’s $ 4.34 and for Chobani it’s $ 4.44, according to IRI. Meanwhile, the price of half a gallon of cow’s milk is $ 2.20 and a half gallon of almond milk is $ 2.96.

Keeping up with the demand for oat milk

Oatly has struggled to keep pace with growing demand, the Wall Street Journal reported this week. In November, company executives told investors they were having trouble increasing production at the second US plant in Oatly in Utah. Oatly has largely relied on contract manufacturers, but the new players have created more competition for those services. From 2016 to 2021, global sales of milk alternatives grew 23% from $ 14.4 billion to $ 17.7 billion, according to data from Euromonitor, a London-based market research firm.

When Toni Petersson became CEO of Oatly in 2012, she spearheaded a packaging and advertising redesign that focused on quirky slogans like “No milk. No soy. No badness” to stand out from the dairy industry. United States by partnering with independent and trendy cafes such as La Colombe and Intelligentsia, and has quickly become the milk of the moment. Oatly now sells oat-based ice cream, yogurt and whipped cream substitutes, and its products are available in 20 countries.

More oat milk, fewer emissions?

The proliferation of oat milk brands can also be good for the environment. Compared to dairy or almond milk, oat milk consumes much less water. A 2018 analysis of a variety of milks, published in the journal Science, found that oat milk produces fewer emissions than most alternatives.

Overestimating these claims, however, has been controversial. Last July, Spruce Point Capital, an activist short seller, released a report claiming that Oatly had misled investors about its sustainability practices. He said Oatly had selected the data for an investor presentation in June 2021 by omitting Oatly’s water consumption is worse than dairy milk and the company’s manufacturing process produces “dangerous volumes of wastewater.” Oatly says the claims in the report were false, and Science’s analysis not only found that oat milk used less water than cow’s milk, but that it also used less water than rice or almond milk.

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