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Oatly to open US production facility to meet demand for plant-based alternatives

By Mary Ellen Shoup contact

- Last updated on GMT

Pic: Oatly Instagram (@oatly)
Pic: Oatly Instagram (@oatly)

Related tags: plant-based, dairy-free, Oats

Swedish company Oatly will open its first US production plant in New Jersey next spring to support demand for its dairy-free oat-based products in the US.

The popularity of plant-based non-dairy milk alternatives continues to grow with sales increasing 61% since 2012 to $2.11bn in 2017, according Mintel.

While almond (64% market share), soy (13%) and coconut (12%) remain the category leaders, new non-dairy milk types are sparking excitement as consumers look to diversify their non-dairy milk repertoire, Mintel noted.

Oatly products that are currently available in the US market include its original, low-fat, and chocolate chilled oatmilks packaged in 64-ounce cartons. Along with increased production, the company has plans to introduce more flavors and formats of oatmilk including a kids product line and 'oatgurt' products.

Rise of Oatly in the US

The company which sources its oats from Canada and the Midwest and has worked with a Canadian company to manufacturer the oat-base for its products, will use the 19,000-square-foot facility to produce its finished oat products, allowing the brand to increase its North American production ​eight-fold, according to the company.

Oatly, an established brand in Europe and the UK that entered the US market in 2016 has seen US interest for its oatmilk products skyrocket​ and the brand is able to meet the nutritional and sustainable demands US consumers have today.

Oatly got its start in the US market by providing barista blend of oatmilk to baristas at high-end coffeeshops such as Chicago-based Intelligentsia and has since made its way into national retail accounts including Whole Foods and Target.

In a previous interview​, Mike Messersmith, the general manager of Oatly, told FoodNavigator-USA: “Both the environmental sustainable message as well as the product nutrition and deliciousness have been core to the brand philosophy and values from the very beginning (first launched in Sweden over 25 years ago).”

“You would think that nutrition and sustainability would go hand in hand, but sometimes you get really great nutrition but it can come at a cost of the environment, and sometimes you have things that can be really incredibly sustainable, but they are not able to deliver the nutritional benefits,”​​ Messersmith said.

According to Messersmith, the company’s processing technology is able "preserve the soluble fibers and beta glucan in the oats, which are really great for heart health and cholesterol levels. And, fibers in general are something most consumers don’t get in a nut milk.”​​

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