Could the Oat Milk Giant Oatly Go Public?

Beyond Meat (NASDAQ: BYND) took the market by storm when it went public in May 2019. It shook up an industry that was very comfortable with having little to no competition. It also brought to light a significant amount of demand for plant-based meat alternatives. Consumers were interested in changing up their diets, especially with a healthier option. And investors saw an opportunity in Beyond Meat, which would pave the way in disrupting a traditional market. 

This year, we could see another plant-based startup go public and make a big splash in the IPO market, similar to what Beyond Meat did in 2019. It has been rumored that the oat milk giant Oatly is considering making its market debut in 2021. The company calls itself the original oat drink company. Oatly turns liquid oats into vegan food and drinks — foods such as milk, yogurt, lattes, and spreadable cheeses. 

Oat milk has become a popular alternative to dairy milk. It’s even more trendy than other milk alternatives, like soy milk and almond milk. Oat milk doesn’t use as much water for its production as almonds, and oat milk’s texture makes it the alternative of choice for baristas because it is easier to froth and heat than other milk alternatives. 

It was only last year that Starbucks (NASDAQ: SBUX) added oat milk to its menus as a trial run, and it was such a big success that Starbucks decided it would officially launch Oatly’s oat milk in all of its store locations across the U.S. this spring. This means Oatly will have a partnership with Starbucks. That’s huge for the company and would give it the chance to gain more partnerships with big brands. Starbucks CEO Kevin Johnson had this to say about his company’s plant-based milk offerings and its sustainability goals:

… Alternative milks will be a big part of the solution. The consumer-demand curve is already shifting… Our Planet Positive Initiatives have a central role in our long-term business strategy, and directly address what our customers are asking for. We are moving toward a move circular economy, and we are doing so in a very intentional, transparent, and accountable way.

Oatly’s oat milk has become a popular and sustainable alternative to milk in a short period of time. This shows again that there continues to be an increase in vegan products that mimic the flavor and texture of meat and dairy products, products that claim to be healthier than the products that most of us have grown up on. 

Vital Farms (NASDAQ: VITL) went public on July 31, 2020. While the company isn’t offering an alternative to traditional food products, it provides products that it claims are ethically produced. IPO shares soared 63% on its market debut, indicating that investors have an appetite for sustainable products and companies that provide those kinds of alternatives. Vital Farms is the largest pasture-raised egg brand in the U.S. Its successful IPO shows that there is interest in more companies that incorporate ethical standards into both their products and the people (like the farmers and plant workers) who play an important part in making those products possible.

Oatly’s Potential IPO

It’s been rumored that Oatly has hired Morgan Stanley, JPMorgan Chase, and Credit Suisse to manage its potential offering. The Swedish company has a list of celebrity backers that include Oprah, Natalie Portman, Jay-Z’s entertainment company Roc Nation, and former Starbucks Chairman and CEO Howard Schultz. An IPO from this company is expected to hit $1 billion. 

While there aren’t many details on Oatly’s IPO right now, it would be among several high-profile companies that are expected to go public in 2021. Some of those include Bumble, Robinhood Markets, and Coinbase. Just this week, we’re expecting IPOs from well-known companies Affirm, Poshmark, and Petco Health & Wellness. 

Affirm is a payments company, and it could raise as much as $442.8 million in its IPO. It’s expected to go public on Wednesday, January 13 on the Nasdaq under the symbol “AFRM,” with an IPO price range of $41–$44 per share. Poshmark is a social marketplace where users can buy and sell clothing. It is expected to go public on Thursday, January 14 on the Nasdaq under the symbol “POSH,” with an IPO price range of $35–$39 per share.

Then there’s Petco Health & Wellness. It has been a U.S. pet care brand for more than 55 years. It will join Poshmark, with a market debut on January 14. Petco will list on the Nasdaq under the symbol “WOOF,” with an IPO price range of $14–$17 per share. Keep in mind that all of these price ranges can increase or decrease depending on how confident the company and its underwriters are prior to the IPO. 

The IPO market was busy up until the very last weeks of 2020, and that momentum is back in 2021. As long as it continues, we could very well see a public offering from Oatly, which, if successful, could pave the way for a growing market. After all, a recent report from Meticulous Market Research indicates that the plant-based food products market is expected to grow at a CAGR of 11.9% from 2020 to 2027, reaching $74.2 billion by 2027. 

For more news and information on this year’s upcoming IPOs and the IPO market, click here. 

Until next time,

Monica Savaglia

Monica Savaglia is Wealth Daily’s IPO specialist. With passion and knowledge, she wants to open up the world of IPOs and their long-term potential to everyday investors. She does this through her newsletter IPO Authority, a one-stop resource for everything IPO. She also contributes regularly to the Wealth Daily e-letter. To learn more about Monica, click here.