Oatly increases investments in plant-based sources to achieve sustainable growth

Oatly Group AB, the Swedish food and beverage company, pledged to deploy more resources in both business operation and production in China to push sustainable growth in the coming years, said its top executive.

Since China has done a lot to peak carbon emissions by 2030 and achieve carbon neutrality by 2060, Oatly expect that all industries will work on their own sustainable strategies. "We are really a company that will support that development in China," said Toni Petersson, the company's CEO.

As Oatly plans to put its first plant in China into operation in the fourth quarter of this year to meet the country's soaring demand for milk made of plant-based sources, it will help the company further cut the carbon emission generated from ocean shipping transportation, he said, adding sustainability is the key part of setting up, operating and running the factory.

The new plant is located in Ma'anshan, Anhui province. In addition to producing oat milk, the new facility will enable the Nasdaq-listed company to expand its product range across a variety of categories.

Supported by a local innovation team, he said the company will tailor the products for Chinese consumers to offer them more options, and many products such as ice cream, these products are already in its innovation pipeline.

"As we are aware that a large number of the Chinese population are lactose intolerant and cannot digest cow's milk, the oat milk offer them an alternative and we will continue to increase the supply in this category," he added.

Since entering the Chinese market in 2018, one of Oatly's drinks made for both global and domestic coffee chains and shops, has received positive feedback from consumers.

Its oat milk products to date are available in over 10,000 cafes on the Chinese mainland, and at boutique supermarkets and on e-commerce platforms. The company gained encouraging sales result in both online and offline channels in China last year, according to Oatly.

Together with Tmall - Alibaba's e-commerce platform, as well as other e-commerce channels, Oatly has successfully developed business of this new category and expects to certainly explore the opportunity of running retail business in Chinese mainland in the coming years.

"Food consumption is a reflection of economic success. The consumption is rising. The types of products people eat and drink are diversifying. They have become more sophisticated, healthy and convenient, therefore the whole beverage industry and consumer market have dramatically transformed in China," said Ding Lixin, a researcher at the Chinese Academy of Agricultural Sciences, in Beijing.

Eager to enhance its earning strength in Asia – one of its three regional pillar markets in the world, the Swedish company decided to choose Singapore to land its first factory for the Asia-Pacific in the second half of 2021. Together with its upcoming plant in China, these moves will ensure stable supplies to both the regional and Chinese markets in the future.