Three Plant-Based Truths That Can Satisfy Any Investor

by: Grovara
HealthNaturalOrganicPlant-basedSustainabilityWellness

It might have seemed like Oatly was an overnight sensation. Its splashy IPO last month surpassed its hopes of a $10 billion valuation and garnered a chorus of praises for plant-based potential just as a pandemic-weary society was emerging into the light of increasing vaccination rates and waning mask mandates. 

Yes, we are more aware of climate change than ever, and sustainability is top of mind for our younger generations, and to a lesser degree but more than ever, for investors. If you’re a brand in the plant-based race currently, it’s hard not to be winning in times like these.

But most people aren’t aware that Oatly is a 25-year-old company and sells a lot more than oat milk. The company was born in Sweden and still operates there, where it has perfected its process of liquifying oats into highly coveted products like its oat milk, barista oat beverages,

“Oatgurt,” bagel spreads, ice cream, and more.

It takes a little while for truly disruptive forces to take shape, and Oatly and a number of its plant-based brethren have earned hard-fought wins, especially in recent months:

Grovara is actively sourcing brands to add to the already stout plant-based “aisle” of its global wholesale marketplace that enables American better-for-you food and beverage makers to connect with and sell to overseas retailers in a data-driven, transparent ecosystem. Grovara has already introduced plant-based milk maker Elmhurst to Mexico and features other plant-based products from Big Spoon Roasters, Brad’s Plant-Based, Chickapea, Joolies, and Lesser Evil. Grovara’s eCommerce platform enables vetted global retailers from 50-plus countries to search for plant-based or any other number of categories to find the most promising, healthy, and better-for-you products for their market’s tastes.

Grovara Chief Innovation Officer & Co-Founder Peter Groverman and Vice President of Brand Management & Operations Kerri McLaughlin discussed three things Oatly’s IPO means for our plant-based future.

Plant-based will quickly move beyond trend

“Plant-based is real, and it has staying power,” says Groverman. “This is not a fad. It’s a pivot and a trajectory, and it’s only the beginning.”

Grovara ranks plant-based alongside paleo and keto as the three biggest global natural and organic food & beverage trends at the moment. Plant-based seems to have the most promising staying power thanks to Wall Street’s substantial support and the larger shift away from animal agriculture.

The pandemic turned out to be a significant boon for plant-based food and beverage, accelerating the trend in the same way it drove increased cloud adoption, e-commerce, and D2C. A recent Instacart survey found that 2020 sales of plant-based meat outpaced the previous year by 42%, and the adoption rate for plant-based milk increased 27% over the same period. More than a third of Instacart customers who purchased plant-based were between the ages of 30-39.

Sustainability, health will matter more than ever

Oatly’s straightforward tagline reads: “We turn liquid oats into food and drinks with maximum nutritional value and minimal environmental impact.”

Sustainability is essential for Oatly, so much that they’ve committed to declaring the carbon footprint of each of their products right on the label, just below the nutritional information. This kind of commitment is necessary to capture consumer loyalty across the vast majority of America’s youngest consumers. According to a pre-pandemic FirstInsight report, Gen Z (62%), Millennials (62%), and Gen X (54%) prefer sustainable products, and most will pay an additional 10 percent or more for them. 

When it comes to preferences for healthy products, Gen Z, whose top spending priority is food, prefers healthier options, according to a recent Piper Sandler report. Some 54% of teens prefer healthy snacks, and 49% consume or were open to trying plant-based meat.

“Alternative milk products like Oatly are going to do well anywhere because there are so many people that have milk allergies or are lactose intolerant, so we’re building up our catalog as we speak,” says McLaughlin. “As more and more people are becoming more health-conscious and removing meat and animal products from their diets, this category will continue to increase.”

Oat milk might be as big as plant-based meat

If you can eat it or drink and it has oats in it, Oatly has probably tried to make it. So have lots of other brands. Because oat-based dairy alternatives are, along with soy, the most environmentally friendly, there is an opportunity to transition dairy farming operations to oats, minimizing disruption to the most vulnerable pieces of the supply chain — American farmers. 

Oats are getting so big that Los Angeles-based Halsa, maker of the first and only 100% clean, organic oat milk yogurts, has created a dairy-to-oat conversion program that provides a practical solution for dairy farmers as more begin to shift away from animal agriculture.

“Plant-based substitutes are the gateways to new products and innovation says Groverman. “Just like how 10 years ago there was no such thing as ‘gluten-free option,’ in the next decade, farms, as we know them, will look different and you will go to the supermarket and ask yourself, ‘Do I want the free-range burger or the conscience-free-lab-grown option?’”