Oatly Group (OTLY.Q) Release Oatly On a Stick? (Sector Roundup: Week 14)

Week in Review

I’ll admit. I have painted quite a pretty picture of the plant-based sector, however, it’s not all sunflowers and roses. In recent years, animal-based food products have become a topic of concern, and rightfully so. In fact, if global meat consumption continues on projected trajectories, agricultural emissions will take up the entire world’s carbon budget by 2025, with animal agriculture as a major contributor. Food systems and animal agriculture are responsible for 35% of all human-driven greenhouse gas emissions and up to a third of all global deforestation. Furthermore, animal agriculture consumes limited resources such as land and water. So, what do you make of this?

At the end of the day, spewing statistics and scrutinizing the animal-based food market doesn’t accomplish anything meaningful. Words on a page can never actively change the world, but the people who read them can. That being said, it’s important to consider all aspects of a story rather than accepting a few good points as the truth. In terms of nutritional value, some plant-based products are comparable to their animal-based counterpart. However, the same cannot be said for all plant-based products. For example, many plant-based cheese products utilize unhealthy ingredients like oils, starches, and gums. Keep in mind, these ‘ingredients’ have next to no nutritional value.

With this in mind, companies like Oatly Group AB (OTLY.Q), Rritual Superfoods Inc. (RSF.C), Vejii Holdings Ltd. (VEJI.C), and The Planting Hope Company Inc. (MYLK.V) are committed to developing sustainable, nutritional, plant-based products, ranging from oat milk to mushroom-based elixirs. Let’s get into it.

Oatly Group AB

$5.909B Market Capitalization

Oatly Group AB (OTLY.Q) is a Swedish food company that produces alternatives to dairy products using oats. In addition to being the world’s original and largest oat milk company, Oatly has an extensive lineup of dairy-free products including ice cream, yogurt, cooking creams, spreads, and on-the-go drinks. That’s cool and all, but what the hell is oat milk? Oat milk is a plant-based milk derived from whole oat grains by extracting the plant material with water. In terms of texture and flavor, oat milk is creamy and supposedly tastes like oatmeal.

With this in mind, Oatly is a food company focused on developing expertise around oats. In doing so, the Company stands at the forefront of the oat milk market, which was valued at USD$251.57 million in 2019. Looking forward, this market is projected to reach a value of more than USD$490 million by 2026, expanding at a compound annual growth rate (CAGR) of 10.2% between 2020 and 2026.

What has Oatly been up to lately? On November 18, 2021, the Company announced the introduction of its latest product innovation, Oatly non-dairy frozen dessert bars, also referred to as ‘Oatly on a stick’. I have a lot of questions. For starters, why is Oatly boasting that its frozen desserts are just in time for winter? Who in their right mind would want to eat a frozen dessert in the middle of winter? Semantics aside, there is quite a lucrative market for frozen novelty products like ‘Oatly on a stick’. In fact, this market is worth $5.4 billion in the US.

“Our new non-dairy frozen dessert bars are fantastic, and I can’t wait for people to try them…We’re proving that oat milk is not just for coffee, cereal or cooking, but can also be the foundation for great-tasting treats to be enjoyed during celebration moments or when a pick-me-up reward is needed. We are so proud of this product and are very excited to bring it to many frozen aisles across the country soon,” said Mike Messersmith, President, Oatly North America.

Oatly’s non-dairy frozen dessert bars unlock a significant opportunity for people to continue making the switch to plant-based foods like oat milk, which have a lower impact of emissions and natural resources than animal-based foods like cow’s milk. Keep in mind, in less than two years, Oatly’s North American portfolio of frozen desserts has become the number one oat-based ice cream brand. More specifically, Oatly’s frozen dessert pints ranked number one in Highest Velocity Brand, Fastest-Growing Distribution Brand, and Dollar Growth in Total US Food.

The Company’s new non-dairy frozen dessert bars will be available in four flavors, including Vanilla, Chocolate Fudge, Salted Caramel, and Strawberry Swirl. Furthermore, these products will come in three-count packs, with a suggested retail price of $5.99. Customers will be able to find Oatly’s dessert bars at more than 3,000 retail outlets through national and regional grocers including Target, Wegmans, and Fresh Direct, to name just a few. Oatly’s new dessert product is expected to hit shelves in December and throughout the first half of 2022.

The Planting Hope Company Inc.

The Planting Hope Company Inc. (MYLK.V) develops, launches, and scales uniquely innovative plant-based and plant-friendly food & beverage brands. The Company’s products are intended to fill key unmet needs in the flourishing plant-based space. Did I mention that Planting Hope is a women-managed and led company? Overall, the Company is committed to three impact pillars, including nutrition, sustainability, and representation. Currently, the plant-based milk market is dominated by almond milk, however, oat milk has scaled to a CAD$500 million business in North America alone and is currently driving category growth.

With this in mind, Planting Hope is looking to cast its lot in the Global Plant-Based Milk Market, which is expected to quadruple in value over the next decade. Furthermore, according to CNN, 56% of US households buy two or more types of non-dairy milk. However, almond milk and nut milk have significant nutrition and sustainability challenges. In most cases, processed almond milk can contain additives such as sugar, salt, and gums. As a result, almond milk tends to be a poor source of protein, fat, and nutrients.

As you probably could have guessed, Planting Hope has developed its own brand of plant-based milk branded Hope and Sesame Sesamemilk. Why sesame? Well, sesame milk production requires 95% less water than almond milk and 75% less water than oat milk. Furthermore, sesame is naturally pest-resistant and does not require intensive pesticides and herbicides. According to the Company, its Hope and Sesame Sesamemilk is comparable to dairy milk, boasting 8 grams of complete protein and 30% more calcium.

What has Planting Hope been up to lately? On November 18, 2021, the Company announced that its subordinate voting shares are now trading on the TSX Venture Exchange under the stock symbol MYLK.

“Today marks an exciting and important milestone as investors can now participate actively in the skyrocketing growth of plant-based food and beverages worldwide by investing in a women-managed and -led company focused on nutrition, sustainability, and representation…

The plant-based movement is transforming the food and beverage industry, becoming a preference for many consumers. We’ve cracked the code on plant milk with our flagship sesame milk – super nutritious, with more protein than almond and oat milk. We believe the plant-based milk industry is primed and ready for disruption and we’re thrilled to be at the forefront,” said Julia Stamberger, CEO and Co-Founder of Planting Hope.

Really not too much else to say here considering the Company literally just went public so let’s delve into some facts. According to Planting Hope’s IPO prospectus on October 29, 2021, the Company said it would be offering 17.5 million to 22.5 million shares at a price of CAD$0.4 per share with the hopes of raising gross proceeds of roughly CAD$7-9 million. Following the closure of its oversubscribed IPO on November 12, 2021, the Company announced that it sold 22.5 million shares and raised about CAD$9 million. Not too Shabby.

That being said, Planting Hope is well-positioned within the lucrative plant-based milk market, which was valued at more than USD$12 billion in 2019. Looking forward, this market is expected to expand at a compound annual growth rate (CAGR) of 11% between 2020 and 2026. In particular, the North American plant-based milk market size should surpass USD$6 billion by 2026. With this in mind, the sesame milk market is largely overshadowed by the likes of almond milk and oat milk.

However, if Planting Hope’s claims are true, the Company could find itself standing at the forefront of the sesame milk industry. A quick Google search of “sesame milk” will show you just how much attention the Company has garnered already. Planting Hope pops up on the first page of Google as well as subsequent pages. For a company that just went public, that’s pretty impressive. Personally, I will definitely be keeping an eye on Planting Hope.

Rritual Superfoods Inc.

$11.512M Market Capitalization

Rritual Superfoods Inc. (RSF.C) is a natural wellness company focused on plant-based product innovation using functional mushroom and apoptogenic herbs to create elixirs. No, we aren’t talking about the same kind of elixirs you’d drink in a video game, although that would be pretty cool. For starters, let’s talk about adaptogens. Adaptogens are certain herbs and mushrooms thought to have health benefits. With this in mind, Rritual’s organic, gluten-free, and vegan elixirs are intended to provide consumers with meaningful mental, emotional, and physical benefits.

The Company’s elixirs are made with limited, organic ingredients beginning with naturally harvested mushrooms, herbal spices like cinnamon and ginger, and whole foods like coconut and fruit powders to create blends that are both delicious and beneficial. Currently, Rritual offers three different elixirs:

Chaga Powder: Astragalus root and Schisandra berry are an immune-super duo that helps maintain the body’s natural defenses, while Eleuthero root keeps you feeling in tip-top shape by providing whole-body stress support.
Lion’s Mane Powder: Rhodiola has been traditionally used by healthy world-class athletes to give them a competitive edge by helping to ward off fatigue, promote physical endurance, and support peak cognitive function.‡ To help you stay smart, Bacopa monnieri, an Aryuvedic herb, is also included for its ability to maintain a healthy brain.
Reishi Powder: Ashwagandha root is one of the most popular adaptogen herbs today, not only for the balancing stress support it provides but also for its calming benefits to the body and mind. Enriched with a blend of cacao and cinnamon to create a blissful and soothing experience.

What has Rritual been up to lately? On November 8, 2021, the Company revealed its Expanded Marketing Strategy. Through this strategy, Rritual will deploy a robust Content Strategy as well as Social Media and Paid Media to drive awareness and educate consumers. With regards to the Company’s Content Strategy, Rritual has been able to rank number one and has placed itself on the first page of Google for numerous key topics related to lion’s mane mushrooms, mycelium, and reishi mushroom benefits.

“This phase of Rritual’s growth requires a highly coordinated and purposeful marketing campaign to further establish the brand, build knowledge with consumers regarding superfoods and their applications, build customer loyalty, and drive sales…The new strategy is designed to support existing and new retailer launches, growing direct to consumer business through Rritual.com and Amazon.com, and the upcoming Canadian launch,” said Mr. Greg McCauley, Rritual Chief Operating Officer.

As for Rritual’s social media presence, the Company intends to deploy additional tactics to engage new audiences through platforms like Tik Tok and Instagram Reels. Furthermore, Rritual has had success with both its macro-influencer campaigns and micro-influencer campaigns. The Company’s micro-influencer and affiliate strategy is growing steadily each week with over 70 micro-influencers signing up to post regular content as an affiliate.

Vejii Holdings Ltd.

$21.01M Market Capitalization

Vejii Holdings Ltd. (VEJI.C) is a North American, online plant-based, sustainable products marketplace, headquartered in Kelowna, British Columbia (BC). Vejii operates its online marketplace ShopVejii.com in both Canada and the United States (US), along with VeganEssentials.com, an online vegan grocer. The Company is committed to providing its customers with easy access to thousands of plant-based and sustainable living products from hundreds of vendors through a centralized, online shopping experience.

By leveraging logistics infrastructure and distribution network technology integrations, Vejii is able to support its vendors and improve customer experience. Furthermore, Vejii utilizes technology to connect buyers with the products and brands they want. To be specific, the Company uses the data gathered from its marketplace to inform every aspect of Vejii’s business, including expansion plans and investments.

What has Vejii been up to lately? Most notably, the Company announced that it had begun trading on the Canadian Securities Exchange (CSE) under the ticker symbol VEJI. Additionally, Vejii provided various updates related to the Company acquisition of Vegan Essential and the ShopVejii Marketplace. More details can be found here.

Most recently, on November 18, 2021, Vejii announced that it had entered into an agreement with Komo Plant-Based Foods Inc. (YUM.C). For context, Komo is a plant-based food company that develops, manufactures, and sells a variety of plant-based frozen meals. The company’s products are sold direct-to-consumer (D2C) through its eCommerce website and distribution network of online, brick & mortar grocery, convenience, and natural retail channels.

“We’re excited to have Komo Comfort Foods on board Vejii’s online plant-based marketplace…Komo offers a unique assortment of wholesome and family-size comfort classics that would add to our selection of frozen meals. Komo is one of the many Canadian plant-based brands to join Vejii’s platform, as we focus on providing brands with exposure to a national audience of like-minded consumers,” said Darren Gill, President and COO Vejii Holdings Ltd.

Through this agreement, Komo’s products will be offered through Vejii’s Canadian platform. Following the Company’s planned launch in December, customers will be able to order Komo’s products across the country, and with same-day delivery in the Greater Vancouver Area. Launched in 2021, some of Komo Comfort Foods’ products include Plant-Based Lasagna, Shepherd’s Pie, and Chickenless Pot Pie.