Abstract

OATLY (OTLY.US), the leading oatmeal milk company, listed on NASDAQ on May 20, 2021, priced at $17, closed at $20.20 on the first day, and now has a market capitalization of $14 billion. In this article, we start with OATLY to explore the development logic of oat milk products and major competitors in the industry.

People in first-and second-tier cities are most favored by healthy diet, and the CAGR of oat milk market is expected to exceed 10.2%.

Oat milk research began in the 1990s, mainly to solve the problem of lactose intolerant people drinking dairy products, through a special process can be used to use enzymes to decompose oats while retaining fiber components. The portraits of consumer groups are women with high spending power in economically developed areas, with the highest attention among people aged 20 to 29. In foreign markets, 2020The retail sales of oat milk products in the United States and the United Kingdom are US $267 million (+ 203%) and US $181 million (+ 98%) respectively. Oat milk has become the largest plant milk product in Sweden, with a 72% market share.. At present, the compound growth rate of plant protein drinks in China is the highest among all kinds of drinks, with a compound growth rate of 24.5% in the decade from 2007 to 2016. In 2020, the sales volume of plant protein drinks far exceeded that of other categories, with a sales growth rate of 965% and a sales growth rate of 1810%. Consumers in first-and second-tier cities have the highest preference for oats.

OATLY focuses on "natural low fat" and "rich flavor", and its business has expanded from Europe and the United States to Asia. In the past two years, it lost a total of nearly 100 million US dollars.

OATLY has expanded and developed a wide range of oat dairy products, including milk, ice cream, yogurt, cooking cream, cream sauces and portable drinks.The company has entered the EMEA, America and Asian markets, with the highest share in the EMEA market (63.5%)The Asian market opened up in 2018 grew the fastest. Food retail revenue accounted for 71%, followed by food services (coffee and tea drinks, 25%) and other channels (4%). With revenue of $420 million (+ 106.50%) in 2020 and a loss of $60.36 million in 2020, the company continued to invest in production, brands, new markets and product development.The company's gross profit margin and sales management expense rate reached 29.94% and 47.7% respectively.. After the company currently has a production capacity of 301 million litres of finished products, which is expected to reach 1.4 billion litres in 2023, OATLY will build two factories in Chinese mainland.

Cater to the concept of "environmental protection", "sustainable" and "vegetarian", with brand reshaping and popular drinks to the world and China.

In 2012, OATLY focused on opening up multinational markets for the younger generation from coffee shops to about 60000 retail stores and 32200 coffee shops worldwide. Oatly is the highest-selling oatmeal milk brand in grocery retail in Sweden, Germany and the UK in 2020.And the company's sales in the UK, Germany and the United States increased by 99% in 2020. Relying on the concepts of "health", "sustainability" and "environmental protection"The share of sales through food and beverage service channels, such as cafes, rose to 25%. Accelerate the cultivation of the Chinese market in 2018, enter Pacific Coffee to open a chain catering channel model and establish a brand partnership with more than 4700 Starbucks stores. China's revenue in 2020 increased more than fourfold compared with the same period last year, reaching $47.452 million (about 306 million yuan). 21% of the revenue comes from e-commerce channels (flagship stores, etc.).

The audience of oat milk market is clear, OATLY leads the industry and a number of domestic brands compete to join the game.

In addition to OATLY, five domestic brands oatoat, wheat Ouye (formerly known as Euro), Daily Box, Omai Planet and Ozak competed to join the oatmeal milk track, all of which have completed round An or angel round financing.In terms of R & D strengthMost companies have independent R & D teamsIn terms of sales channelsTmall Mall online is the most common way to shop goods, and offline mainly depends on coffee shop scenes.In terms of selling priceThere is little difference in the price of oatmeal milk among different brands, except for the highest MinorFigures (4.6yuan / 100ml), the unit prices of other brands are concentrated in the range of 340RMB / 100ml.In terms of getting customers from salesOATLY has completed the initial consumer education and brand awareness establishment, the highest awareness, second-tier and below the market more groups of consumers need to expand. At present, the product structure of oat milk market is single, and the publicity focus is the same as the target audience.Rely on independent research and development to launch new products, enrich the category, or break the key for the next stage.

Risk hint

Intensified competition in the industry, the risk of consumer perception change, and the single risk of product structure.

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1. The head company OATLY is listed in the United States. how is the current development of the oat milk market?

OATLY (ticker "OTLY"), a Swedish oatmeal company, listed on Nasdaq on May 20, priced at $17, closed at $20.20 on the first day, and had a market capitalization of $11.961 billion based on its closing price. In July 2020, OATLY completed its ninth financing of $200m, led by Blackstone, with investors including US talk show host Oprah Oprah and Oscar-winning actress Natalie Portman. Earlier, China Resources Weilin Health Investment Co., Ltd., a joint venture between China Resources Group and Belgium's Verlinvest Group, acquired about 30 per cent of OATLY in 2016.

1.1. The portraits of consumer groups are women with high spending power in economically developed areas, and people between the ages of 20 and 29 have the highest attention.

According to the regional distribution of the keyword search for "oat milk" provided by Baidu Index, East China, South China and North China have a high degree of attention. In terms of specific provinces and cities, Shanghai, Guangdong, Beijing, Zhejiang and Jiangsu are in the top five.

In terms of age and gender structure, people aged 20 to 29 have the highest attention, followed by those aged 30 and 39, and people with high spending power at the age of 20 and 39 account for more than 80%. Women pay more attention to oatmeal milk than men.

1.2. Targeting healthy diet, the market size of oatmeal milk has exceeded 250 million US dollars.

The research on oat milk began in the 1990s.In 1963, a study on the mechanism and effects of lactose intolerance showed that some people could not drink milk normally because of lactose intolerance. In the 1990s, in order to create milk that is more suitable for human nutrition, scientists began to create a substitute to replace traditional dairy products while ensuring the flavor and taste of dairy products. Oats, a basic crop around the world, provide a solution to this. Compared with livestock and other plant crops, oats are rich in healthy fiber and consume less resources. In 1995, the world's first oatmeal milk product was launched.

1.2.1. Foreign market: oat milk leads the plant-based milk category, and the sales volume of oat milk in the United States increased by 203% in 2020 compared with the same period last year.

As a new Internet celebrity health food, oatmeal milk has become more and more popular in the global market in the past two years. The compound annual growth rate is expected to exceed 10.2 per cent by 2026, according to Mintel. With the deepening of people's understanding of the nutritional value of oats and the pursuit of the concept of healthy diet, plant-based milk substitutes, including oat milk, are heating up rapidly in major markets around the world.

Euromonitor estimates that retail sales in the global plant milk industry were $18 billion in 2020, accounting for about 3 per cent of the global dairy industry (excluding soymilk beverages in China) and about 9 per cent of the global dairy industry product categories.By 2020, the penetration rate of alternative products in other dairy categories was less than 1 per cent, highlighting the huge opportunities for the plant milk industry in the future. The consumption trend of healthy and sustainable diet is on the rise. In the US, UK, Germany, China and Sweden, 60 per cent of consumers who bought plant-based milk in the past three months (as of December 31, 2020) accounted for 70 per cent of new consumers in the past two years, according to a survey of consumers by OATLY. This shows that the value proposition of vegetable milk is becoming more attractive to daily consumers, or heralds new changes in the dairy market. Consumer insight (ConsumerInsights) predicts that the vegetable milk market will continue to grow by 20 to 25 per cent over the next three years, mainly driven by both new entrants and per capita consumption by existing consumers.

In terms of specific regions, the plant dairy market in the EMEA (Europe, Middle East and Africa) region is US $4 billion in 2020, with a market share of 1.5%, and is expected to grow to US $6 billion in 2025, with a penetration rate of 1.8%. The American market is expected to reach US $5 billion in 2020, with a penetration rate of 2.8%, and the plant dairy market is expected to increase to US $7 billion in 2025, with a penetration rate of 3.7%. The Asian market plant dairy market reached US $8 billion in 2020, with a penetration rate of 4.7 per cent.

Among all kinds of plant milk, oat-based products have outperformed other categories in recent years.From 2019 to 2020, sales of oatmeal milk products in the United States rose 203% from a year earlier, according to Nielsen. Retail sales reached $267 million in 2020, making it the second largest dairy substitute after almond milk. Retail sales of oatmeal milk in the UK reached $181 million in 2020, up 98% from a year earlier, making it the largest dairy alternative beverage by market share, according to IRIInfoscan. And since 2018, with OATLY promoting retail business, the market share of oatmeal milk has gradually increased from 23% to 60% (by the end of 2020). In Sweden, oatmeal milk has become the largest plant milk category, with a market share of 72%.

1.2.2. Domestic market: sales of vegetable protein drinks have grown at a compound rate of 24.5% in ten years, and people in first-and second-tier cities prefer oat milk.

Oatmeal milk is also popular in the domestic market. Especially after Starbucks partnered with OATLY to launch oatmeal latte and Lucky partnered with Awatian to launch oatmeal coffee.Oatmeal milk has become one of the new tracks that have attracted the attention of investors.

According to the category report released by Tmall International, the compound growth rate of plant protein drinks in China is currently the highest among all kinds of drinks, reaching 24.5% in the decade from 2007 to 2016. The "Innovation trend of Plant protein Beverage 2020" released by Tmall New Product Innovation Center points out that the sales of plant protein drinks in 2020 are far higher than those of other categories. Consumers in first-and second-tier cities have the highest preference for oats, and the concepts of "dietary fiber" and "low calorie" have become search buzzwords with rapid growth in popularity.In 2020, the growth rate of plant protein drinks was much higher than that of other beverages, with sales growth rate of 965% and sales growth rate of 1810%.

Full report

This article is selected from the New Voices of the Seaside Science. Author: Zhu Haibin; Zhitong Financial Editor: Zhuang Lijia.