Oat-based Beverage Market Report

With the global demand for diverse and nutritious oat-based products is rising, leading to increasing their opportunity for agriculture in the way of quality and sustainability, resulted in increasing investment in a series of new oat investments.  For instance, in July 2024, GRDC announced to invest US$14 million in R&D for improving efficiency and reducing costs for processors, and expanding the range of oat-based products that manufacturers can offer consumers that align with market demands. In addition, in July 2024, SunOpta announced to invest US$ 26 million, to expand plant-based beverage processing facilities of California, to increase annual oat milk production by 60%, by using enzymatic process, available in liquid and dry oat-based as an ingredient, resulting in increasing market opportunities and increasing market growth.

However, the oat-based beverage market includes wide range of products, from plain and flavored oat milk to oat-based creamers and even protein-enriched options, due to which companies are continually innovating with new flavors and formulations. For instance, in June 2023, Oatly announced to launch oatly light, semi, and whole, new oat drink lines, that can be stored at room temperature if stored unopened for nine months, offering better taste in drink, cooking and baking with entire range containing no sugar or sweetener.

The use of high-cost raw materials, and fortified nutrients, impacts the pricing and profitability of product, resulting in hampering market growth and limiting acceptance among budget-conscious consumers. Additionally, some consumers prefer dairy milk and other plant-based milks including almond, soy and more taste and texture over oat-based alternatives, due to which to achieve right flavour and consistency can be challenging for market players. However, changing consumer preferences toward other available options, including smoothies and other beverages, make it challenging for market players to stand out, resulting in impacting growth of the market.

Furthermore, many oat-based beverages are found unsafe to consume due to several contaminants, leading to rising health concerns. For instance, in July 2024, the Canadian Food Inspection Agency announced product recall for plant-based milk alternatives of silk and great value oat milk due to listeria contamination, results multiple illness including fever, muscle aches, nausea, vomiting and diarrhea and in severe cases, includes headache, confusion, loss of balance and convulsions.

To cater to consumer preferences such as non-dairy milk alternatives, fewer calories, no sugar, and fewer ingredients, many producers are introducing new products that are designed to enhance taste and provide the same texture with more varieties. For instance, in January 2024, Oatly launched oatly unsweetened and super basic oat milk, providing 0 grams of sugar with 40 calories per serving, made from oats, citrus zest fibre, and sea salt, providing great texture and stabilization capabilities, that enhance the smoothies, coffee, cereals, recipes, and more.

Moreover, the increasing lactose intolerance and other dairy-related health problems led to increasing demand for low-calorie, lactose-free, alternatives that can replace milk in daily beverages, due to which many market players are launching new products. For instance, in September 2023, Epigamia launched Oat beverage classic, these are creamy, neutral and allergy-free,  making it excellent choice for consumers with sensitive gut, and blood sugar-related problems and those looking to reduce cholesterol by providing a similar in taste profile as of dairy milk, and offering micro-foam quality, allowing to create latte art.

Additionally, growing consumer demand for vegan, allergen-free, and Kosher Certified beverages in classic flavours with home-based applications, offering same taste as of dairy products, to cater this demand key players are launching flavoured products. For instance, in March 2024, Oatly announced to expansion the launch of flavoured oat milk creamers in US, designed to swirl seamlessly into drip and other home-based coffee applications, providing a touch of sweetness to each brew, and are available in a line-up of four classic flavours such as sweet & creamy, vanilla, caramel, and mocha and are glyphosate-free, Non-GMO Project Verified, Gluten Free Certified.

The growth of the oat-based beverage market in US, is credited to the strong coffee culture integrated with the rising popularity of plant-based diets, as people are becoming more health conscious, leading to demand for lactose-fee and dairy alternative beverages as well as snacks led to increase, resulting in market growth. As well as, well-established retail and market players are strengthening sales. In addition, European consumers are drawn to the sustainability and nutritional benefits of oat-based beverages and increasing preference for organic and non-GMO products in flavoured varieties and fortified options are popular among consumers, making it a widely available option in mainstream supermarkets and specialized health food stores, characterized by a high level of product diversity.

However, Asia-Pacific market is witnessing significant growth, driven by the increasing veganism and flexitarians population, as consumers are increasing exploration in oat-based beverage options for their usefulness and health benefits, as well as availability of retail and distributers, offering market expansion. For instance, in March 2023, Life Health Foods launched oat-milk based beverage in India, a vegan dairy-free, plant-based milk drink, fortified with essential vitamins, with no added sugar, zero cholesterol, and free from preservatives, available in wide range includes Almond, Cashew, Coconut, Soy and Oat.