Shares in alt-milk maker Oatly surge on US stock market debut

Shares in Oatly have surged by 30% on the company’s US stock market debut, valuing the alt-milk maker at $13bn (£9.2bn), as investors bet runaway demand from consumers for plant-based food alternatives will continue.

Oatly is using the money from the initial public offering to expand its global network of factories, enabling it to quadruple production from 350m litres of oat milk a year to 1.4bn in two years. Its plans include a large site in Peterborough, East Anglia.

Toni Petersson, Oatly’s chief executive, said demand for its oat milk had “completely exploded” during the pandemic with the company currently experiencing “triple-digit growth on three continents”. The company’s sales doubled from $204m in 2019 to $421m last year, although losses widened from $35.6m to $60.4m.

“We currently have four factories and by the end of 2023 we’re going to have nine,” said Petersson of its plans after the Nasdaq listing. Production constraints meant that shops often sold out of cartons of Oatly before the weekend, he said: “Demand is no problem … it is our ability to supply that is the thing.”

In February the Swedish company revealed it was working on a flotation, and on Wednesday the shares were priced at $17. That was at top of its target range, giving the company an opening valuation of $10bn. It raised $1.1bn in new shares with existing investors cashing in to the tune of $335m. At open the shares rose as high as $22.74.

Oatly’s worth has soared over the past year and sales have accelerated, even amid disruption caused by the pandemic. Last summer, it sold a 10th of the company to a group of investors that included Blackstone, Oprah Winfrey and Jay-Z, but that deal valued the business at just $2bn.

The listing is a big moment for Oatly which, after several decades in the Swedish wilderness, hit the big time thanks to its guerrilla marketing. When one first-time drinker declared “it tastes like shit!” the company put that on its carton. It has also picked a fight with the dairy industry, with Petersson appearing in one of its ads singing “Wow, no cow!”

Petersson, now a wealthy man owing to his 1.5% stake in Oatly, said he and other top executives achieved the IPO while working from home in Sweden. He also insisted that despite morphing into a multibillion-pound corporate, the company will not change.

“Yeah, we’re gonna be super boring,” Petersson joked, before adding: “Our mission, our purpose is not going to change. It is the opposite. With scale we can have a greater positive impact on the planet.” Its success was based on its ability to connect with consumers and do that “you have got to be legit”, he added.