How Oat Milk Became a Million-Dollar Industry

Beloved by environmentalists for its low impact on the earth and by baristas for its ability to froth like dairy milk, oat milk has gone from zero to 100 in just a few years. Or, to be more specific, zero to $223.41 million in twenty years. That’s the value of the global oat milk market in 2018, and it’s expected to rise to $614.58 million by 2027.

Rickard Öste, a food scientist at Lund University in Sweden, developed oat milk in the early 1990s while he was researching lactose intolerance and sustainable food systems. Öste later went on to found Oatly, the first commercial manufacturer of oat milk and the brand we see most often here in Australia.

Oat milk is made from liquefied oats, which are easy to cultivate, making the product economical and available throughout the year. It’s less taxing on the environment than regular dairy milk and almond milk. It’s easier to digest than lactose in dairy milk. It’s creamier and better for frothing than other plant milks. It contains no oestrogen, unlike soy milk. It's fine for people with nut allergies. And it has more fibre than any other milk.

No wonder oat milk has gone from fringe milk alternative to fridge staple. Even Starbucks plans to add the option to its menus here later this year.

In fact, within Australia, our obsession with coffee is largely behind oat milk’s meteoric rise around the world.

One reason: Baristas are finding that it’s the perfect dairy alternative for coffee. It has a neutral taste compared to the nuttiness of almond milk or the sweetness of soy milk, which lets the flavour of the coffee shine through (and with such good coffee available on our shores, that’s a big tick in the column for oat milk).

Texture-wise, oat milk is thicker and creamier than almond and soy and has a similar mouthfeel to dairy.

Oat milk is also better for the environment than dairy and other plant-based milk alternatives. It uses less land and much less water than other options because oats can grow in arid areas, making it seem like the ideal option for our increasingly hot, dry climate.

Oatly, the original brand now seen everywhere from trendy cafes to Rough Trade groups (where it’s used as a bartering currency), now has a cohort of investors including Oprah Winfrey, Natalie Portman, and Howard Schultz, as well as investment management company Blackstone Group. The company is seeking a valuation of around $12 billion ahead of an IPO on the US sharemarket, rumoured to be later this year.

It’s undoubtedly the darling of the alternative milk market, with its clever, no-bull (sorry) marketing—a prime example of which was the deliberately awkward commercial aired during this year’s Super Bowl.

In Australia, other oat milk brands have a lesser, but still significant, share of the alternative milk market. The barista-focused Minor Figures, made to complement the canned nitro brew coffee that launched the brand; Vitasoy, which started selling oat milk alongside their soy staples in 2019; and US brand Califia Farms.

Have you jumped on the oat milk bandwagon? Let us know what you think in the comments below!

Need some good coffee to use that oat milk in? Check out the best home espresso machines.

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