Company News

Oatly Scraps Plans for UK Factory, Pivots to Asset-Light Strategy for Profitable Growth

Back in 2021, pre-IPO Oatly revealed its plans to build one of the world’s biggest vegan dairy factories. Initially set to open in 2023 in Peterborough, UK, and create 200 jobs in the region, the market leader said at the time, “We’re really excited to finally announce the news of its arrival in 2023. The UK is a really important driver of the global plant-based movement, with growing demand for Oatly across the country, and we’re excited to supply this increased demand.”

The BBC and local Peterborough press published stories at the end of last week regarding the cancellation of these plans. Speaking to Oatly on Friday, the company stated that this announcement was in fact made last November in an earnings presentation, during which it was explained that construction would be discontinued, that the project had already been on hold for some time while it completed a review to optimise its global supply chain strategy.

Bryan Carroll, GM of Oatly UK & Ireland, stated the following. “After undertaking a thorough review of our supply chain network, we have identified new ways to service the UK market that better utilises our existing facilities across Europe. Therefore, we will not move forward on the completion of the Peterborough facility.”

© Oatly

He adds, “This asset-light strategy supports our growth plans, ensuring we have the right amount of capacity when we need it, while also freeing up more resources to nurture our pursuit of profitable growth. The UK is a critical market for us, where more than a third of UK households are buying dairy alternatives and Oatly is the #1 selling oat drink brand.”

While this news will undoubtedly be leveraged by anti-vegan press and pushers of continued disinformation around the plant-based foods movement, Oatly points out that it has been the fastest-growing plant-based milk brand in the UK over the last few years*, outperforming value and growth of the rest of the category. Four of the top six selling alternative-milk products in the UK are Oatly products, and the company is responsible for bringing in the most new shoppers into plant-based milks in the last year.**

The company continues to innovate with new formats, launch NPDs in various markets both in North America and Europe, and meanwhile has been encouraging European citizens to vote for the planet.

*(Circana, Value & Volume sales, 52 w/e 18/05/24).

**(Kantar, 52 w/e 12/05/24)

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