Top food producer Sunopta places big bets on oat milk

North America's best-performing food producer is going big on oat milk.

Sunopta Inc. has spent more than two decades focusing on natural and organic foods, making products such as frozen fruit, soy milk and fruit bars. The latest push, though, is the milk substitute made from oats. “Oat represents the biggest bet the company has ever made,” chief executive Joe Ennen said in a phone interview. “You're going to see continued growth in oat milk.”

Sunopta, based in Mississauga, Ont., is making its largest investment in its history by spending US$26 million to expand its oat processing facility in Minnesota, Ennen said. The upgrade will turn oat milk into Sunopta's second-largest plant-based milk product after its almond beverage, with annual production capacity jumping fourfold by the end of 2022.

The move is part of the company's drive for high growth and sharpened focus on plant-based products under Ennen. Under the strategy, Sunopta is selling its global ingredients business to an Amsterdam-based commodity trading company for 330 million euros (US$390 million). Proceeds will be used to pay down debt and invest in the plant-based push.

Sunopta shares have soared 39 per cent since the firm announced the sale on Nov. 10, extending this year's rally to 277 per cent and making it North America's best-performing food producer, according to data compiled by Bloomberg. The stock has surged during the pandemic, giving Sunopta a market value of about $1.1 billion.

“We're a bet on the sector, on the consumer movement,” Ennen said, highlighting his company's range of healthy products.

Demand for oat milk is soaring, with U.S. sales this year surpassing those of coconut milk and soy milk. Almond milk is still the most popular among dairy alternatives, accounting for about two-thirds of the market with US$1.6 billion in sales, according to data from Nielsen.