It is a company valuation with no shortage of froth. How can Oatly, the cereal-based milk alternative with $200m (£155m) of sales last year, have secured backing from an array of hard-nosed investors and Hollywood celebrities that values the Swedish food producer at $2bn?
Even that price tag has continued to foam better than one of the dairy-free flat whites whipped up by New York baristas who have contributed to Oatly’s soaring popularity.
But chatter of an astonishing $5bn stock market listing in the first half of next year does not faze Toni Petersson, the group’s offbeat chief executive, who once lugged his synthesiser into a wheat field to film a commercial literally singing Oatly’s praises.
“It’s a high valuation but at the same time, it’s not that high,” he says. “You look at the capital markets. They want to invest sustainably but there’s a supply and demand problem. There are not enough commercially viable companies out there that have reached that size. So we are a rare asset.”
It sounds like a float is a done deal, but he insists: “We don’t know what’s going to happen, whether we’re going to float or not. The only thing I can say is that being an independent company has served us well.”
So too has snappy marketing that has played into an increasing taste for healthy, environmentally friendly grub that means dairy and meat-free options are no longer the preserve of vegans or specialist supermarkets.
Oatly’s sales have carried on rising even though thousands of coffee shops remain closed since lockdown. Thanks to a bump in home consumption, turnover this year should be at least $350m.
To meet demand, the company is rapidly opening new factories to churn out the thick oat base from which its drinks, spreads, yogurts and ice-cream are made.
“What’s hard to believe is that this is still the beginning of the curve,” says Petersson, 52, who under the influence of his Japanese mother rarely drank milk at home when he was growing up.
Whereas soya and almond milk – categories whose UK sales growth appears to be flattening off – offered something for lactose-intolerant consumers and more of a low-fat choice, Petersson believes his mission “is about converting dairy, cow-milk drinkers to Oatly – and that’s a completely different driver based on sustainability and health”.
A shift in how the world feeds itself has excited investors as much as environmentalists. Beyond Meat, a plant-based meat maker, has seen its shares appreciate six-fold since listing on Nasdaq in May last year.
Traditional food groups have been racing to catch up, as seen by French dairy giant Danone’s $10bn acquisition in 2016 of WhiteWave, owner of Alpro, one of Oatly’s largest competitors.
When it came to raising money to expand, Oatly could afford to be choosy. Petersson explains that his new backers announced in July, including Oprah Winfrey, the rapper Jay-Z and the actress Natalie Portman, were “people with a generational voice that reach different audiences”, and several lesser lights had been rejected.
But it was the involvement of investment giant Blackstone in the $200m stake sale that had activists spluttering over their smoothies.
Its leader Stephen Schwarzman’s donations to support Donald Trump’s re-election stuck in the craw. So did accusations that one of its investee companies was involved in the destruction of the Amazonian rainforest, labelled by Blackstone as “erroneous claims and mischaracterisations (that) were blatantly wrong and irresponsible”.
Petersson knew the investment would go down badly with some consumers. “We also knew that this was not the most convenient decision for us to make.” So why make it? “It may seem like it’s detached from who we say we are, but in fact it represents the essence of our soul and our determination to try to inspire others to create a positive societal shift.”
In other words, Oatly believes it was doing its bit to funnel capital into companies that benefit climate change.
There was a similar reason for accepting a 2016 investment from the state-backed China Resources, which owns food retailers and coffee shops and has helped Oatly enter that market.
Dairy consumption is declining in much of the world but has been forecast to triple in China by 2050. “I tell you if that happens, it doesn’t matter what we do in Europe or in the US or anywhere else to try to address global warming,” Petersson warns.
Oatly’s run-ins with the dairy industry are well-known, at least at home. The company traces its roots to 1994 when it was founded by brothers Rickard and Björn Öste as Ceba Foods.
The Oatly brand was devised in 2001, but when Petersson was appointed in 2012 sales were still small. That changed with a relaunch in 2014 that infused the brand with new attitude by pointing out the environmental impact of cow milk production because of all those belching animals.
Oatly claims dairy pasture turned over to growing oats for its goods reduces greenhouse gas emissions by 80pc and land usage by almost as much. The more aggressive tone – communicated in a series of adverts featuring Petersson that included him crooning the “wow, no cow” refrain – angered Sweden’s dairy lobby and sparked a lawsuit.
“Not coming from the food industry, I wasn’t aware that they were so sensitive about things,” says Petersson, whose pleas of introversion despite his starring role fool no one.
A crushing defeat limited the claims Oatly could make about the competition, but it only energised the firm to expand once it published the legal text. “The lawsuit defined us as a company, (and encouraged us to) just stand up for what we believed in no matter what. Also, the attention we got basically threw us on a completely different trajectory.”
Now in 20 countries and with dairy producers on the back foot, Petersson still does not expect milk drinking to disappear in his lifetime. But he is angry at lobbying efforts to prevent companies like Oatly from using terms such as “milk”, “cheese” and “cream” to sell their plant-based alternatives.
“There are ways around it for sure but I think what amazes me is where do these decision-makers live? Do they not understand the world is going in a different direction?”
Petersson’s rise is almost as remarkable as Oatly’s. He and his brother Ronnie were the only children in their village with dark hair and stood out further by wielding toy samurai swords. Their Swedish father, who worked in shipping, had met his mother when he walked into her parents’ restaurant in Kobe, Japan and romance blossomed.
Petersson harboured ambitions to be a pop star, buying a recording studio with a friend and taking off to Japan after being signed by Belinda Carlisle’s manager. Returning to Sweden, dreams unrealised, he took on a series of manual jobs, including barman on the Denmark-to-Norway ferry, after his father said there was no need to take up his university place to study engineering.
Capitalising on their heritage, the brothers sold their cars to open a Japanese restaurant and bar, Izakaya Koi in Malmö, in 1993, when eating sushi was still a novelty. Its success snowballed, leading to a nightclub, property investments, a deal to distribute the Japanese beer Sapporo, and a tableware and clothing range.
All that was sold when the two families decided to take off for Costa Rica. “In Western society, you are always fighting against time. We wanted to show the kids that there is a different way of life.”
The idyll was shattered in 2008 when the Lehman Brothers collapse and subsequent recession slashed the value of land they had invested in.
Back home, Petersson found a job running a start-up that made backpacks and three years later was cast as the wild card in a recruitment process for a job he was exceedingly hazy about. “I just wanted to see how a process like that works. I don’t think I wanted a job; I don’t think the headhunter wanted me to take the job either.” Regardless, something clicked.
Eight years on, Petersson faces the prospect of Wall Street with a degree of calm. “When you’re the sole entrepreneur, you’re responsible for every single thing.” Now, he has accountants and lawyers on tap as he plots the next step of his food revolution. “Fearlessness is the thing but it doesn’t mean that you’re reckless, right?” he says with a grin.