Oatly Pre-IPO Black Book Presentation
We are presenting our Oatly Black Book today at 12:30 PM EST. Oatly is going public this week. At the top end of the $15-17 range, the market capitalization would be close to $10B. The valuation may seem steep, but Oatly could be the next great global consumer products company reminiscent of the greatest consumer growth stories we’ve seen IPO in recent decades (e.g., CMG, LULU, UA). Oatly is already a proven global consumer products company as a Swedish-based brand with a significant presence in the more progressive EU/UK market and a market leader in the US. In addition to global growth prospects, the company is positioned to benefit from strong secular tailwinds as consumers shift to plant-based kinds of milk.
Oatly has several large growth opportunities. The company is driving consumer awareness of oat milk, which is still in the early innings of adoption. Oatly's demand drivers have been so effective that it has outstripped supply for the last few years and is projected to continue to do so in the future. It is growing geographically - the penetration in its home market is much higher than the markets it has entered recently, like the U.S. It is rare for a consumer brand to be growing in two continents this early in its expansion, but Oatly has already entered its third continent. Oatly is also growing with new products - adding yogurt, spreads, butter, cheese, etc. Only two countries even have the full product assortment.
Oatly is challenged to expand its manufacturing capacity to keep up with demand. The IPO is raising funds for future growth. The company has announced new plant construction in three continents ahead of the IPO. In the U.S., we have documented frequent out of stocks. Perhaps the company's biggest near-term challenge is to build enough supply to keep up with demand.
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CLICK HERE for the live webcast and materials at the time of the event. |
April Retail sales (KR)
Retail sales in April were flat month over month after a 10.7% increase in March, which was upwardly revised from 9.7%. Expectations for April were a 1.0% increase. On a year over year basis, April retail sales increased 51.2%. Many consumers received $1,400 stimulus checks in March. Spending decreased 0.2% YOY at grocery stores after decreasing 14% in March. On a year over year basis, spending at grocery stores decreased 0.2%. Spending grew 3.0% at restaurants and bars in April after a 13.5% increase in March. On a year-over-year basis, on-premise spending increased 116.8% in April compared to +36.5% in March.
Coca-Cola pulls the plug on Energy
Coca-Cola announced that it would discontinue sales of Coca-Cola Energy in the U.S. and Canada by the end of the year. The drink has three times the caffeine of a regular Coke and containing guarana, a popular supplement. The energy drink was at the heart of a long-running dispute between Coca-Cola and Monster Energy. After arbitration, it was launched in the U.S. market in January 2020, just ahead of the pandemic’s disruption. Coca-Cola has proven again that large resources are not enough to make up for being late in a category. The oat milk category is still relatively young, but Oatly’s brand has a head start.
