Oatly, Other Deflated IPO Stocks Haunt New-Issue Market

London
CNN Concern
—

Fast-growing Swedish oat milk make Oatly is headed for a splashy New York IPO that volition test investor need for companies that make constitute-based foods.

The visitor, which will list on the Nasdaq on Thursday, priced its shares at $17 each, giving it a valuation of $10 billion and raising over $1.4 billion from the sale of new and existing equity.

Oatly, which produces a milk substitute made from oats, has grown speedily in recent years. Its signature product is now sold in threescore,000 retailers and over 32,000 java shops beyond more twenty countries.

The visitor’s success exemplifies the growing need for plant-based foods, driven by health-conscious Millennial and Generation Z consumers who are also concerned about the touch that animal-based products accept on the environment.

The trend
has boosted newcomers such as Incommunicable Foods and Beyond Meat (BYND), which soared
in its stock market debut in 2019, while as well likewise prompting established food companies, such as Nestlé and Target (CBDY) to launch plant-based ranges.

Oatly, which launched its first production in 2001, was making oat milk long before dairy alternatives were stylish. Merely it was only after the company appointed a new management team in 2012, led past entrepreneur Toni Petersson, that sales actually began to take off.

The make has become known for its marketing and quirky packaging. Its cartons feature natural language-in-cheek claims most the benefits of oat milk and the downsides of animal-based products.

Afterward poor reviews for a low-budget commercial at this year’s Super Bowl (which featured Petersson playing a keyboard and singing “Wow! No Cow,”), the visitor gave away “I totally hated that Oatly commercial” t-shirts.

Describing itself as the world’s largest oat milk company, Oatly also makes ice cream, yogurt, cooking creams and spreads. But it is all-time known for its milk, which costs more than similar alternatives made from rice and soya, and which Oatly has carefully positioned as the product of choice among discerning consumers.

For example, in the United States and Britain, it targeted professional baristas and specialty java shops, winning over coffee lovers with its “fully foamable” barista edition oat beverage.

It followed a similar strategy when it launched in 2018 in Communist china, where it has an sectional partnership with Starbucks (SBUX). Sales in Asia increased fivefold between 2019 and 2020, according to a prospectus filed with the Us Securities and Substitution Committee concluding month.

“Global demand for Oatly products has far outpaced our supply,” the company said. “Every bit we go on to calibration, nosotros accept a significant opportunity to satisfy unmet need and leverage our brand success to aggrandize our product portfolio.”

Found-based dairy manufacture retail sales were estimated to be $18 billion in 2020, according to market place enquiry firm Euromonitor, representing approximately three% of the global dairy industry.

Oatly has four factories, including ii in the United States, and another three planned or nether construction in Singapore, Mainland china and the United Kingdom.

The company scored a $200 one thousand thousand investment terminal July from a group led past private disinterestedness behemothic Blackstone, which included Oprah Winfrey, Natalie Portman, Jay-Z’s amusement agency and erstwhile Starbucks CEO Howard Schultz.

The investment valued Oatly at $2 billion, although the company is not nevertheless assisting. While sales more than doubled from 2019 to hit $421.4 million final year, it posted a loss of $60.4 one thousand thousand as it poured coin into product development, new factories and marketing.

Oatly is as well operating in an increasingly crowded dairy alternatives market, competing with deep-pocketed rivals such as Danone (DANOY), whose Alpro and Silk brands sell a range of dairy alternatives made from soya, almonds, coconuts, cashew nuts and oats.

Ben & Jerry’s, endemic by Unilever (UL), offers dairy-free versions of its water ice cream range and the consumer appurtenances giant is targeting a five-fold increase in sales of plant-based meat and dairy alternatives over the next 6 years.

Earlier this calendar month Nestlé, the globe’s biggest food visitor, announced the launch of a pea-based milk alternative called Wunda. It will launch the product in France, kingdom of the netherlands and Portugal, with a rollout to other European markets planned. That volition pit it direct against Oatly, which derives near of its revenue from Europe.

— Danielle Wiener-Bronner contributed to this written report.