ALTERNATIVE DAIRY FOOD FIRM OATLY RAISES $200 MILLION IN FUNDING
Jul. 22, 2020
Global AgInvesting reports:
Swedish sustainable, oat-based dairy alternative company Oatly has secured $200 million in funding led by Blackstone Growth, and including a roster of high-profile investors - Oprah Winfrey, Natalie Portman, Howard Schultz, the former chairman and CEO of Starbucks, Rabo Corporate Investments, Roc Nation, the entertainment company founded by Jay-Z, and Orkila Capital.
As minority shareholders, these new investors will be joining existing investors Verlinvest-CR JV and Oatly's founders, who will also be reinvesting in the company's growth through a commitment of additional capital.
"I am delighted to welcome to the Oatly family our new partners who share our commitment to supporting category-creating brands and sustainability," said Eric Melloul, chairman, Oatly, and managing director, Verlinvest. "Since our initial investment in 2016, we have supported Oatly in its successful transformation from a Nordic brand into a global movement by delivering unique, high-quality engaging products, based on proprietary, patented oat-technology to the new emerging generation of conscious consumers in a transparent manner."
The funding itself, and the fact that it now values Oatly at $2 billion, is reflective of the growing popularity, increasing normalization, and growing traction of the plant-based alternative category, and signals the willingness of investors to commit serious capital within the space, even amid a global pandemic.
Reinforcing this view, in January of this year, plant-based beverage and food company Califia Farms raised a massive $225 million Series D led by the Qatar Investment Authority (QIA) and including the sovereign wealth fund Temasek, among others - and in March of this year, a $200 million founders' funding round backed by founders, entrepreneurs, and global industry leaders launched LIVEKINDLY, a new plant-based food platform dedicated to transforming the global food system through shifts toward plant-based eating.
These are just a select few high-value deals that demonstrate the rapidly growing demand for sustainable food systems and options. Founded in the 1990s based on research conducted at Lund University, Oatly is a leader in this movement, utilizing a patented enzyme technology that converts fiber-rich oats into nutritional beverages and food items.
Since the company's founding, part of its greater mission has been to reduce the food industry's CO2 emissions by offering consumers' new alternative choices. And since its brand re-launch in 2013, Oatly CEO Toni Petersson said the company has focused on reshaping the food system to positively impact society and to better contribute to the future of the planet.
"Leaders in asset management like Blackstone play an essential role in order to create real sustainable change," said Petersson. "It is my belief that capital has to turn green and do so for the right reasons."
"We chose to partner with Blackstone Growth because of their tremendous resources and unique reach. Our new partners' commitment to supporting us and furthering of our mission is a clear indication of where the world is heading, which is in a new, more sustainable direction."
The company's products are already available in more than 50,000 locations in 20 countries, and the capital gained through this funding will be used to drive further growth, which includes plans to expand in existing markets, and the addition of new production plants and teams in the EU, the U.S., and Asia to bring production closer to consumers and to make its products more readily available to health conscious buyers worldwide.
"We are thrilled as this new investment will accelerate the Oatly brand expansion in North America, Asia and Europe and allow for the emergence of a global leader in food sustainability," said Eric Melloul, chairman of Oatly and managing director at Verlinvest.
"Oatly is a premier global brand whose product is committed to healthy and sustainable living with significant runway for continued growth to meet rising consumer demand," said Jon Korngold, global head of Blackstone Growth. "We are privileged to partner with Toni and the broader Oatly team to help the company extend its global leadership position in the years to come."
Last year, Oatly demonstrated its leadership by adding a carbon footprint label (much like a nutrition label) to its products in Europe, giving consumers the data needed to account for the carbon footprint of their food choices before they buy. This initiative not only challenged other companies to do the same, but resulted in several industry-changing results that included:
• The adoption of enhanced labeling by multiple retailers to show carbon footprints
• The German Parliament agreed to consider enacting laws that would mandate enhanced carbon footprint product labeling, and,
• Unilever committed to begin carbon labelling for 70,000 of its food products.
"I understand that it may sound naive at times to actually believe that Oatly can change the world-that the impact of what we do can inspire others to make changes that will lead to a global behavioral shift among consumers-but that's fine," said Petersson. "Investments from firms like Blackstone in companies like Oatly is a critical step in securing a future of focused green investment that transcends traditional CSR work and focuses on urgent, systemic efforts to address the climate crisis."
"Oatly has a creative and talented team, an incredible brand, and a strong set of values," added Ann Chung, managing director, Blackstone Growth. "We're excited to invest in what they have built and to join forces with the Verlinvest-CR JV to ensure its continued success moving forward."