Photo: Dietmar Rabich via Wikimedia Commons, CC BY-SA 4.0, cropped. This adapted image is also licensed CC BY-SA 4.0.
Oat milk is now a $10 billion business. Swedish company Oatly made its stock market debut on the Nasdaq today, raising $1.4 billion at $17 a share and valuing the company at nearly $10 billion.
Investors couldn't get enough. The shares, trading under the ticker OTLY, opened at $22.12, which briefly valued Oatly at more than $13 billion, and closed the day at $20.20, up nearly 19%.
Oatly's story goes back to 1995, when a group of scientists at Lund University in Sweden developed the world's first oat milk. It started selling under the Oatly name in 2001 and is based in Malmö. Its revenue more than doubled last year to $421.4 million.
Last July Oatly sold a 10% stake for $200 million to a group led by Blackstone, with Oprah Winfrey, Natalie Portman, former Starbucks CEO Howard Schultz and Jay-Z's Roc Nation among the investors. CEO Toni Petersson told reporters on a conference call today:
We're here to make the world better. I know it sounds stupid, but it's true.
And on how much room there is to grow, he kept it short: "The runway's massive."
For a company that sells nothing but plant-based dairy alternatives to be worth this much tells you everything about where milk is heading. US milk consumption has plunged 25% in 20 years while plant-based milks surge. Choosing oat over cow's milk is better for the planet, with the UN Food and Agriculture Organization estimating that livestock produce 14.5% of human-caused greenhouse gas emissions. It also spares cows a lifetime in what the UK's Advertising Standards Authority agreed could be accurately described as "inhumane".
This is the latest chapter in a story we've been following for years. In 2017 a 90-year-old New York dairy ditched dairy for plant milks. In 2019 Beyond Meat shares surged 163% on their first day, and last year Oprah and Jay-Z invested in Oatly while Starbucks put oat milk in every US store. Earlier this month Eleven Madison Park went fully plant-based.
If you're not vegan yet, switching your milk might be the best and easiest place to start.