MINNEAPOLIS – SunOpta, Inc. made oat milk processing a strategic priority in 2018 and started investing to become a leading manufacturer of the product. Today, oat milk is well on its way to becoming the leading plant-based beverage sold by the company. Now SunOpta management has made the growth of the nutritional beverage business a strategic priority.
Michael Buick, general manager of SunOpta’s plant-based food and beverage business unit, forecasts sales in the new category to reach $50 million by fiscal year 2025.
“We’re going to leverage our core capabilities (in aseptic beverage processing) to get into nutrition,” he said on June 2 during the company’s Investor Day presentation.
SunOpta is adding capabilities to process 330ml packages, the primary format for ready-to-drink nutritional and protein drinks. The company is also in talks with a “leading brand” in the category to buy 90% of SunOpta’s capacity, Mr. Buick said.
“I think there’s a lot of room to run,” he said. “We are very excited to be able to partner with a leading brand to really get a foothold in that category.”
Chief Executive Officer Joseph D. Annen said the initial foray into the category will focus on whey-based beverages.
“We’ll need to add incremental capacity to work really hard against the plant-based side of this, and we’ll look at doing that with a partner,” he said. “These are expensive manufacturing lines. They are massive. You need volume flowing through them.
“I mean you can’t put down a single line and say we’re going to run only plant-based protein drinks. You’re not going to like that look for the first few years… But we are fully looking forward to putting our plant-based milk manufacturing knowledge and expertise there to bear and help drive and build the plant-based side of it.”
Mr. Buick also noted during his presentation that oat milk sales for SunOpta increased.
“Oats will be the biggest type of anything we do in 2022,” he said. “If it were 2018… Oats would be one-third of 1% of our total business – one-third of 1%. In 2022 it would be one-third of our total business.
Looking to fiscal year 2025, he estimated SunOpta’s oat milk sales to double from $80 million in fiscal 2021 to $200 million. Growth will be driven by expanding beyond its original shelf stable oat milk and creamer into oat milk bases, oat milk lattes, oat milk with protein, oat ice cream and oat spreads.
“Oat is the fastest growing segment in plant-based milk,” said Mr. Buick. “Shelf-stable, refrigerated, retail or food service – major national brands have less than 40% ACV at retail. Not enough extended shelf-life processing. Not enough aseptic processing. And of course, in the market place.” There is not enough extraction of oats to meet the demand for oat milk.”
SunOpta plans to build its oat extraction capabilities in California.
“You can imagine, again, when major brands have 40% ACV, they are busy building out refrigerated extended shelf-life capacity,” Mr. Buick said. “And they’re counting on us to make more oat extractions.”