SunOpta posted $229.7m in revenue for the third quarter ended Oct. 1, 2022, a 15.7% increase compared the Q3 2021 driven by 19.9% growth in the company's plant-based segment led by the growth of oatmilk.
The company, which manufactures private label, name brands, and its own brands (SOWN and Dream), saw the fastest growth among its own-branded plant-based milks business with revenues up 41% vs. one year ago and volume gains of 33%.
"We continue to see very strong top-line growth. The consumer continues to spend money in the category," SunOpta CEO Joe Ennen told FoodNavigator-USA.
Ennen said that despite whatever economic or financial strain consumers are feeling, plant-based milks are one area they'd be hard-pressed to give up.
"The reason for that is there are very strong underlying bedrock consumer drivers of plant-based milk that supersede whatever’s going on in the economy. So when the economy’s tight you may forego a Hawaii vacation or a new car or remodeling your kitchen, but most people are loath to trade out products they think are contributing to their health," he noted, pointing out that many consumers who grew up drinking plant-based milks simply prefer the taste over cow's milk or for the many Americans who are lactose intolerant, dairy milk is not a practical dietary option.
Oatmilk on fire
SunOpta, which manufactures a full suite of plant-based milks (i.e. almond, coconut, rice, soy), continues to see its oatmilk business (private label, name brands, and own brands) take off.
"In the last 13 weeks, we’ve seen the oatmilk segment grow 29%. SunOpta’s oatmilk business grew 68%. We're growing significantly faster than the rest of the brands in the category," said Ennen.
"We would attribute to that several things. No. 1 is we have an outstanding product -- as evidenced by the market share and sales momentum that we have. Second, we have done a great job of servicing our customers and keeping them in stock and we're being rewarded with sales momentum."
With past headlines circulating of 'The Great Oat Milk Shortage' of 2018, Ennen said SunOpta was vigilant in ensuring a stable, secure supply of oat milk from the start.
"We were very proactive in identifying and bringing online multiple sources of oats so that we were able to keep up with the demand. Second is, we are great at running manufacturing plants," he said.
SunOpta currently owns four plant-based/aseptic manufacturing facilities throughout the country including a 400,000-square-foot mega facility in Midlothian, Texas, coming online at the end of 2022 to support customer demand in plant-based beverages and plant-based protein drinks, according to Ennen.
'We’re seeing a bit of a resurgence of soy milk'
While highly focused on the success of its oatmilk business, Ennen highlighted other subsegments of the plant-based milk category that are gaining steam.
"We’re seeing a bit of a resurgence of soy milk. We’re seeing it, especially with younger consumers," said Ennen.
"It’s an interesting one because it is the most nutritionally complete (providing a full amino acid profile) out of any of the plant-based milks, without a shadow of a doubt," said Ennen noting how soy milk has suffered more than its fair-share of negative health perceptions.
"If you think about everything else that is soy based, whether it’s tofu or edamame, those are all positive healthy products. If you think about every vegan and vegetarian, soy is one of their main sources of protein."
Ennen predicts that soymilk will continue to creep back up in sales as more younger consumers enter the category.
Coconut milk also posted strong mid-30% year-over-year growth driven largely by the foodservice channel, specifically coffee shops which use coconut milk as a base for its seasonal, promotional coffee drinks.
"Several of the large companies in the coffee shop space report strong foot traffic and sales momentum, and there's a positive correlation there to our business," said Ennen.
Looking at the year ahead, Ennen said the company is well on track to deliver EBITDA of $100m in 2023 by committing to its agnostic approach to the plant-based milk category.
"In terms of where that growth will come from, it’s an extension of the current playbook. It is capacity expansions to help our customers grow. It is continuing to lead with oat milk and continue to build out a robust set of options," he said.
"We’re agnostic. We want to continue to serve the whole category. We see ourselves as a pioneer in plant-based foods and beverages, and that’s how we want to win."