Reporter | Ma Yue
Edit | Ya Han Xiang
1
OATLY, a brand of oat milk, recently released its fourth quarter and full year 2021 results. In 2021, the company achieved revenue of $643.2 million, up 52.6% from $267.7 million in the previous year, and revenue in the fourth quarter was $185.9 million, up 46.3% from $127.1 million in the year-ago quarter.
The Asian market, led by China, became the fastest-growing bright spot on the company's report card. For the full year 2021, Asia revenue was $126.9 million, up 136.5% from $53.7 million in the previous year, compared to revenue of $179.8 million in the Americas, up 79.8%, and Revenue in Europe, the Middle East and Africa was $336.5 million, an increase of 25.7%.
OATLY's CEO, Toni Petersson, emphasized that OATLY has a proven, proven multi-channel growth strategy that sets it apart from the competition, successfully builds brands on three continents, and leaves plenty of gaps for adding new markets.
This strategy you can understand as starting from the coffee shop and then occupying other channels. OATLY, which often appears in cafes or milk tea shops as an option to "replace oat milk", initially approached consumers in new markets with such a food and beverage channel, and then expanded to retail channels. So far, it has entered more than 20 countries and regions around the world.
OATLY has copied this model directly to China, and the rapid development of the coffee market here has also made it a hitchhiker.
In the financial results, the company specifically listed the partners in the Chinese market. For example, Starbucks, COSTA, Tim Hortons, Manner, Heytea and Nesher's Tea and Haidilao have all become OATLY's partners. The store layout and supply demand of these brands in the Chinese market are part of the strength that OATLY's growth cannot be ignored.
After the catering channel gained a certain recognition, OATLY began to enter the e-commerce and retail channels. In 2021, OATLY became the first place in the Tmall oat milk category and the third place among all beverage brands during the Double Eleven period. The growth of retail channels (Convenience Bee, Yonghui, METRO, FamilyMart, 7-11, Watsons, etc.) was also mentioned in the earnings report, and the share of its oat milk products in the Asian plant-based beverage market increased significantly, from 0.7% in 2020 to 3.4% in 2021.
OATLY 2021 Earnings
In addition, in response to the low production capacity of OATLY in the past, the dependence of the Chinese market on imports and the fragility of the supply chain, the company chose to invest heavily in factory construction. In November 2021, China's first self-built factory was inaugurated in Ma'anshan, Anhui Province, which is also the largest planned production capacity in Asia, and is expected to reach an annual output of 150 million liters of oat-based finished products when fully produced.
However, the reason why the growth of the Asian market is outstanding is that on the one hand, in addition to the increase in demand, on the other hand, it is also due to the fact that the region belongs to the new market to be developed compared with the relatively mature markets such as Europe and the United States, with a small base and a significant increase. According to the financial report data, in 2021, Europe, the Middle East and Africa accounted for half of the revenue contribution, reaching 52%; the Americas contributed 28%; while the Asian market accounted for the smallest market, only 20%.
And OATLY is still not profitable.
In the fourth quarter, OATLY achieved gross profit of $29.6 million, gross margin slipped to 15.9%, and net loss attributable to shareholders of the parent company was $79.8 million, more than double the net loss of $37 million in the same period last year.
Combined with a net loss of $133 million in the first three quarters of 2021, OATLY's full-year net loss may have exceeded $213 million.
Losses are multifaceted. In the fourth quarter compared to the year-ago quarter, the Company had three additional costs from the start-up of three new plants, including higher depreciation of $6.4 million and a higher than planned share of combined packaging production. OATLY has also experienced higher inflationary pressures, including higher logistics costs, increased energy costs in europe, the Middle East and Africa, and higher container fees from Europe, the Middle East, Africa to Asia.
R&D expenses and marketing investment are also increasing. In fact, although OATLY has a first-mover advantage in the field of oat milk, in the case of new brands emerging in an endless stream, it must also continue to expand its market share through "burning money" to compete with more local brands.
OATLY's self-built factory in China
We have reported that a number of plant milk brands have also emerged in China's local market and received capital boosts.
According to the statistics of Yiou Think Tank, from July 2019 to August 2021, Chinese plant-based food start-up brands have accumulated 48 financings, with a total amount of more than 1.2 billion yuan. For example, the coconut milk brand "Cocoa Full Score", which obtained 3 rounds of financing in half a year; the "Daily Box", which received millions of angel round financing; the "Wild Plants" in which the parent company obtained Xicha shares; the "Wheat Oye" that completed the angel round financing in 2020; the "oatoat wheat and wheat" that received tens of millions of yuan of A round financing in 2021, and so on.
Rising marketing costs have further squeezed OATLY's corporate profits. Fourth-quarter selling and administrative expenses increased to $118.9 million from $63 million in the year-ago quarter, financial data showed. As a result of business growth, the company added $17.9 million in external consultants, contractors, and other professional expenses for the digitization of the company's plants and costs associated with public companies. In addition, the company added an additional $9.3 million in branding and marketing expenses.
"We will continue to focus on our growth investments, putting them above profitability to continuously expand OATLY's operations." Toni Petersson, CEO of OATLY, said, "This will have an impact on some profits in the short term. ”