With a $10 billion valuation and a company that is growing worldwide, Oatly CEO Toni Petersson projected confidence in the continued power of oat milk the morning before his company's stocks began trading on the open market.
"We're bringing new capacity on board every single quarter this year," Petersson said at a virtual press conference Thursday morning. "Our growth is completely reliant on our supply and our ability to supply. And, I mean, 2020 was a tough year for everybody. We produced more than planned. We generated triple-digit growth successfully across three continents, without seeing each other. It just speaks about how solid our structure and our business is. I sit here in front of you today feeling super comfortable where we are."
Oatly, which has been on a meteoric rise, is the most recent company in the plant-based segment to enter the markets. Trading of its shares, with the ticker symbol OTLY, started at a $17 share price today when the Nasdaq opened. Oatly's first day of trading stayed above the initial share price, going as high as $22.42. It closed at $20.24.
The Sweden-based company, which can be credited with inventing oat milk in the 1990s, has been a force in the plant-based sector. Its products first launched in Europe three decades ago, and the company has been growing since then. Oatly entered the United States through coffee shops in 2016, and has expanded its offerings here to grocery shelves, including oat milk-based "Oatgurt" and frozen desserts. The brand helped drive oat milk to be the second most popular plant-based milk in the United States, behind almond milk, according to SPINS statistics.
According to its F-1 form filed with the U.S. Securities and Exchange Commission as part of its initial public offering, Oatly sold $421.4 million worth of products in 20 countries worldwide 2020, an increase of 106% over sales in 2019. The Americas was Oatly's second largest market, responsible for $100 million of those sales, and 71% of the company's total gross profits came from retail sales.
Petersson said Thursday morning that Oatly has a sizable runway for growth. All sales lost from coffee shops during pandemic-related closures were backfilled by additional sales in grocery stores, he said. In the U.S. last year, the company had a weighted distribution rate to retailers of 20%, while competitors were able to reach 40%, he said. The company can also fill about 70% of the orders it receives from retailers worldwide. Bringing more factories online can help fill those gaps and make a huge difference, Petersson said. He added that these numbers only capture orders of Oatly's products.
"We don't really know what the demand is," Petersson said. "Our growth is 100% related on velocity — organic demand and velocity. We're not pushing through promotions or price mechanisms or anything like that. So we are clearly changing the game of the whole industry here."
With shares sold, Oatly has raised about $1.4 billion. The company's rapid expansion makes now the right time for an IPO, Petersson said. Oatly currently has four plants operating worldwide, with one each in Sweden, the Netherlands, New Jersey and the newest in Utah. A lot more manufacturing capacity is coming with five global factories currently under construction and nearing completion in the U.S., the U.K., China, Singapore, and another in Southeast Asia. There are also three factory expansions planned for completion by 2022 in Sweden, the Netherlands and New Jersey.
One thing Oatly does not plan to do with the influx of cash from the IPO is make any acquisitions, Petersson said. Its focus right now is regional innovation, production and creativity. The company is uniquely positioned with a global platform, he said.
"We really, really believe in our plan ... and in that plan, there's really no reason for us to look at M&A," Petersson said. "I'm not excluding that completely, but right now we don't see that being part of the plan going forward."
Sustainability — and trying to make the world a better place — remains at the core of what Oatly is doing and hopes to achieve, Petersson said. Some have wondered if a diverse group of investors could alter this commitment. The company sold a stake last year to a group of investors that included Blackstone Group. This became controversial because of Blackstone founder Stephen Schwartzman's donations to former President Donald Trump and the firm's ties to two Brazilian companies that are reportedly linked with deforestation in the Amazon. Petersson said this stake had no impact on Oatly's deep commitment to sustainability.
"But I sure hope it affects [Blackstone] in how they look at sustainability," Petersson said. "We are the benchmark. We are here to prove that it's more profitable to do good for the world."