Vegan Stocks Feeling their Oats

May 18, 2021

New York Times:

Private equity has a place at the table, and so do Oprah and Jay-Z. Food giants like Nestlé are scrambling to get a foot in the door. There are implications for the climate. There are even geopolitical rumblings.

The unlikely focus of this excitement is Oatly, producer of a milk substitute made from oats that can be poured on cereal or foamed for a cappuccino. Oatly, a Swedish company, will sell shares to the public for the first time this week in an offering that could value it at $10 billion and exemplify the changes in consumer preferences that are reshaping the food business.

It’s no longer enough for food to taste good and be healthy. More people want to make sure that their ketchup, cookies or mac and cheese are not helping to melt the polar ice caps. Food production is a leading contributor to climate change, especially when animals are involved. (Cows belch methane, a potent greenhouse gas.) Milk substitutes made from soybeans, cashews, almonds, hazelnuts, hemp, rice and oats have proliferated in response to soaring demand.

“We have a bold vision for a food system that’s better for people and the planet,” Oatly declared in its prospectus for the offering. The company’s shares are expected to start trading in New York on May 20.

To justify its frothy valuation, Oatly has to convince investors that it can dominate a market where there is already a lot of competition and where big food conglomerates are just beginning to deploy their formidable resources. Nestlé, the world’s biggest producer of packaged food, unveiled its own milk alternative this month, made from peas.

Oatly cultivates an upstart image with packaging art and a logo — Oatly! — that looks hand-drawn. It advertises that it is “like milk but made for humans.” But the company is more than 25 years old and is backed by some serious money.

The majority shareholder is a partnership between an entity owned by the Chinese government and Verlinvest, a Belgian firm that invests some of the wealth of the families that control the Anheuser-Busch InBev beer empire. Blackstone, the giant private equity firm, owns a little less than 8 percent in Oatly.

The interest of heavyweight investors is confirmation that vegan food has gone mainstream, but it could also make it harder for Oatly to maintain its anti-establishment image. The company faced a backlash from some fans after Blackstone led a $200 million investment in Oatly last year. Stephen A. Schwarzman, Blackstone’s chief executive, was a steadfast supporter of former President Donald J. Trump, who has maintained that climate change is a hoax.

Oatly said it hoped Blackstone’s investment would inspire other private equity firms “to steer their collective worth of $4 trillion into green investments.” Blackstone’s backing also helped lend Oatly credibility on Wall Street. And there was no sign that Blackstone’s involvement slowed Oatly sales, which doubled last year.

Oatly’s image benefited from a roster of celebrity investors, including Oprah Winfrey, Natalie Portman, Jay-Z’s Roc Nation company, and Howard Schultz, the former chief executive of Starbucks. All have some connection to the plant-based or healthy living movement.

Oatly declined to comment, citing regulations that restrict public statements ahead of an initial public offering.

Oat milk is part of a larger trend toward food that mimics animal products. So-called food tech companies like Beyond Meat have raised a little more than $18 billion in venture funding, according to PitchBook, which tracks the industry. Plant-based dairy, which in the United States includes brands like Ripple (made from peas) and Moalla (bananas), raised $640 million last year, more than double the amount raised a year earlier.

In the United States, milk substitutes like oat milk and rice milk make up a $2.5 billion industry that is expected to grow to $3.6 billion by 2025, according to Euromonitor. Globally, the $9.5 billion industry is expected to grow to $11 billion.

Once a niche market, alternate milk has become as American as baseball. A frozen version of Oatly that mimics soft-serve ice cream is being sold this season at Yankee Stadium, Wrigley Field in Chicago and Globe Life Field in Arlington, Texas, where the Rangers play.

The potential of the market for dairy alternatives is not lost on big food producers. Oatly acknowledged in its offering documents that it faces fierce competition, including from “multinational corporations with substantially greater resources and operations than us.”

That would include British consumer goods maker Unilever, which said last year that it aims to generate revenue of one billion euros, or $1.2 billion, by 2027 from plant-based substitutes for meat and dairy, for example Hellmann’s vegan mayonnaise or Ben & Jerry’s dairy-free ice cream. Unilever has not announced plans for a milk substitute.

How do the Faux milks stack up health wise?

New York Times:

According to SPINS, a market research company, the six most popular plant-based milks based on sales data from the past year are almond, oat, soy, coconut, pea and rice (excluding blended versions, like coconut almond).

Here’s how the original or unsweetened versions of each stack up to one another and to whole milk in terms of taste, protein, calories, fats and other attributes. (We used whole milk for comparison because it has become more popular in recent years, but keep in mind that the U.S.D.A. dietary guidelines recommend drinking low fat and skim versions rather than whole. All versions below contain calcium and vitamin D.)

Almond milk: This nutty-flavored beverage is the most popular plant milk, according to SPINS. One cup of the unsweetened version has just 37 calories — about a quarter the amount in whole milk — and about 96 percent less saturated fat. But it is no match for cow’s milk (or raw almonds themselves) in terms of protein — it has just about 1 gram, compared with the 8 grams present in whole milk. If you have a nut allergy, experts recommend avoiding it as it may trigger an allergic reaction.

Oat milk: Sales of this thick, creamy drink increased by 182 percent since last year, according to SPINS, making it one of the fastest growing plant milks. One cup of the popular Oatly! brand’s original version has little saturated fat (0.5 grams) and slightly fewer calories than whole milk (120 versus 146), but has 7 grams of added sugars (plain milk has none) and only 3 grams of protein.

One cup does have some fiber — 2 grams — but Dr. Edwin McDonald IV, an associate director of adult clinical nutrition at the University of Chicago Medicine, said that’s not very much. “If you are looking for health benefits from oat milk, you’re better off eating oatmeal,” he said. One cup of oatmeal, for instance, has twice as much fiber as one cup of oat milk. Fiber is important for gut health, cholesterol and blood sugar control, and for maintaining your weight.

Soy milk: When fortified with calcium and vitamins A and D, soy milk is the only nondairy milk that is comparable to cow’s milk in terms of nutrient balance, according to the dietary guidelines. One cup has 6 grams of protein, 105 calories and about 89 percent less saturated fat than whole milk. Made from soybeans, it has a similar consistency to cow’s milk and is a natural source of potassium. “If you are looking for more of a nutritionally balanced milk substitute, then pea and soy are going to be the best,” said Dr. David Ludwig, an endocrinologist and obesity researcher at Boston Children’s Hospital.

While there’s been some concern about the estrogen-mimicking compounds called isoflavones in soy, there isn’t enough data to prove any harm or benefit. If you’re allergic to soybeans, though, experts say to avoid it.

Coconut milk: Made from the grated meat of coconuts, it’s naturally sweet and has about half as many calories as whole milk, but has little protein (0.5 grams per cup), and has 5 grams of saturated fats — about the same amount as whole milk — with no healthy unsaturated fat. As with dairy fat, there’s the concern that coconut fat can raise the levels of LDL, or “bad,” cholesterol, said Alice H. Lichtenstein, a Gershoff professor of nutrition science and policy at Tufts University.

Pea milk: Sometimes called “plant protein milk,” this beverage is made from yellow split peas. As with other plant milks that are made from legumes, like soy milk, pea milk is high in protein (8 grams per cup) and unsweetened versions contain about half the calories of whole milk, and just half a gram of saturated fat. “My favorite nondairy milk is pea milk,” said Dr. McDonald, who is lactose intolerant and a trained chef. That’s because of its protein, and a texture he likens to cow’s milk — somewhat creamy with a mild taste.

Rice milk: Made from brown rice, the milk has a naturally sweet taste. It has slightly fewer calories than whole milk (115 versus 146 per cup), and no saturated fat; however it’s very low in protein (0.7 grams per cup). When compared with other plant-based milks, “there doesn’t seem to be any benefit from rice milk,” Dr. Lichtenstein said.

The beverage also has fast-digesting carbohydrates, Dr. Ludwig said, which can quickly convert into glucose, spiking insulin and blood sugar levels — a potential concern for people with diabetes or with severe insulin resistance.

12 Responses to “Vegan Stocks Feeling their Oats”

  1. Gingerbaker Says:

    ““We have a bold vision for a food system that’s better for people and the planet,” Oatly declared in its prospectus for the offering. ”

    In other words, we are going to try to make huge profits by impugning the livestock sector with huge amounts of bu****it.

    • rhymeswithgoalie Says:

      Unlike the oil&gas industry (specifically Exxon), cattle ranchers didn’t know about how cow burps were a bad source of GHGs, so they might have been broadsided by AGW. They should well have known that corn-fed cattle represent a waste of agricultural resources and that tasty high-meat diets are not good for people.

      BTW, my mother’s family raised Black Angus, my grandfather was an officer in the Louisiana Cattlemen’s Association and I like my steak medium-rare. That doesn’t change the fact that low-meat diets are better for people and cattle burp methane.

  2. Mark Mev Says:

    You do realize that you are pissing into the wind (in my opinion of course). I will continue to eat locally grown grass raised beef whenever I want a steak or ground meat per the importance of the recipe. But, my eating of non-highly processed vegetable based products is slowly increasing. I think that is the long term trend and will be investing accordingly.
    Not a fan of highly processed meat substitutes, but if you are going to eat a burger king whopper with all that extra crap on it, whether it is beef or the impossible burger, it really doesn’t matter with taste. I’m going to get sick later either way.

    • Gingerbaker Says:

      So, your argument is that bulls**t doesn’t matter and foods should garner our righteous approval based upon how successful are their sales ?

      And you have a typo here:

      ” my eating of non-highly processed vegetable based products is slowly increasing” because these foods are highly-processed.

      The same multinational cereal/oil processors are the very ones promoting anti-meat rhetoric even as they pass off the equivalent of Twinkies as more wholesome than actual meats and dairy. See, that is not OK with me.

      • jimbills Says:

        Oatly is almost all water and oats with some rapeseed oil, calcium, and vitamins. You can make oat milk at home. It’s not complicated.

        Mark Mev said he doesn’t go for Impossible – which IS highly processed. He prefers pasture raised real meat and vegetables. Deep breath and read his comment again.

        The multinational cereal and oil corporations you keep saying are sending out propaganda about meat and dairy are the same companies heavily tied to the meat and dairy industries. They are just trying to cover their bases with faux meat and dairy – sort of like BP getting into solar.

        Oatly, and Impossible for that matter, are tiny fishes in the sea compared to these behemoths. That might change over time, but right now they hold little to no sway over governments or the culture as a whole.

        • Gingerbaker Says:

          “The multinational cereal and oil corporations you keep saying are sending out propaganda about meat and dairy are the same companies heavily tied to the meat and dairy industries”

          News to me! Perhaps you would like to offer some evidence?

          • jimbills Says:

            Cargill is one of the largest. They recently came out with some faux meat offerings. They are also directly in the livestock industry as well as being heavily invested in livestock feed:

            Archer Daniels Midland is another – major grain and oil producer getting into fake meat.

            This isn’t news:

            “The big agricultural firms are in part playing defense. Grain traders supply the world’s livestock farms with animal feed – a business that would suffer if fake meat sales rise at the expense of real meat. Seed companies such as Bayer AG BAYGn.DE sell to farmers who grow the corn and soybeans that are now sold mostly to feed livestock.”

            You think Beyond and Impossible are somehow at the root of some giant propaganda machine? They are currently a handful of tech investors and employees. They are laughably tiny in comparison to the established agricultural corporations that absolutely dominate U.S. policy and think tanks. (IPO valuation is meaningless – newer tech companies always get overvalued in comparison to older companies with a far larger current footprint.)

          • rhymeswithgoalie Says:

            Conversely, traditional meat companies like Perdue are providing faux-meat options. They already have the supply chain into supermarket refrigerator aisles.

    • rhymeswithgoalie Says:

      Back in the 1980s I ate tofu dogs, since with all the crap I put on my hotdogs (relish, mustard, onions, garlic, sometimes BBQ sauce) it’s only there for the structure…and I don’t have a deficiency in hog noses and anuses. 😉

    • rhymeswithgoalie Says:

      Tangent: I wish market reports wouldn’t use the word “consume” for foodstuffs. I definitely don’t ingest all the alcoholic drinks I buy.

  3. rhymeswithgoalie Says:

    One feature I like about soymilk (oatmilk, nutmilk, peamilk) is that you don’t have to sniff it to see if it turned sour. The worst I’ve ever encountered with an unopened soymilk having gone to room temperature for a while was that it developed a mealy (bean-y) texture.

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