In this month's edition of Start-up spotlight, we speak to Oato, a UK-based producer of fresh oat milk – which is bottled and delivered straight to consumers' doorsteps around the country, in addition to being available in retail. Carl Hopwood, the company's founder and managing director, tells us more about the start-up's innovative approach.
What led to Oato’s establishment and what is the company’s long-term goal?
Oato's journey began when I worked in sales for a software company, travelling across Europe, and noticed a growing trend of colleagues switching from cow's milk to oat milk. This led to a significant accumulation of non-recyclable cartons, destined for landfills or incineration.
With a background in chemistry, I realised there was a way to use my expertise to develop fresh oat milk in glass bottles with a focus on sustainable packaging. I then established Oato in 2019, with one distribution channel via the British milk rounds.
What started as requests for 1,000 bottles a week quickly became hundreds of thousands of pints a month. We moved the production site to a solar-powered facility in Lancashire and took on the risk to grow with the demand.
This year is our first year in retail with our HDPE 100% recyclable poly bottle, and we have also signed with a handful of wholesale partners to bring Oato to coffee shops and hospitality venues. I am proud that what began as an idea has now resulted in the largest supplier of fresh oat milk in the UK.
Our long-term goal is to expand our distribution channels and make fresh oat milk accessible to all, while maintaining our commitment to sustainability by using renewable energy and recyclable packaging.
How do you think Oato will impact the plant-based milk industry in the UK? What are the key benefits for consumers and the sector?
I think Oato will positively impact the plant-based milk industry in the UK by paving the way for more local producers to provide fresh alternatives in a growing sector dominated by imported, UHT options. A key benefit for consumers in the sector by choosing local is an affordable price point each week; Oato is approximately 25% cheaper than other leading milk alternatives.
We aim to position ourselves as a leader in the plant-based milk industry, influencing trends and driving sector-wide changes. With a key emphasis on freshness, quality, and sustainability, we hope to shift consumer preferences, leading to higher demand for similar products in the milk alternative category.
Are there any notable trends and consumer needs across the milk alternatives category that Oato is fulfilling with its solution?
Consumers today are more informed than ever. In the UK, in particular, they are seeking brands that have clear ingredient provenance, offer convenience and are transparent about their sustainability credentials. Oato confidently ticks all of those boxes for today's savvy consumers.
Oato is also one of the few fresh alternatives in a category that is predominantly UHT. We are the only plant-based milk on the shelf in Waitrose in an HDPE poly bottle, which is synonymous with dairy. Just as you wouldn’t usually choose to drink UHT dairy, the same option should be available for milk alternative drinkers. We are happy to fulfil that solution for consumers with fresh oat milk for the category.
What drove the development of Oato’s flavoured options in the range?
Oato's flavoured oat shakes, Chocoloato and Strawberry, were driven by demand from Oato consumers via our milk round partners. Our fan base loved our original fresh barista oat milk, so they started to send in ideas for an oat shake range. Once we knew we had a milk round partner aligned to distribute the flavours, we spent months in product development making sure the taste and quality were top-notch.
How does Oato approach collaborating with milk round companies to deliver its products across the UK?
In the early days, I started by posting on a local Kendal and Lancaster Facebook page, offering a free bottle to those wanting to try our glass-bottled fresh oat milk. Nothing could have prepared us for the response we got –1500 requests. It was pretty mind-blowing, and it all built from there.
We’d started to sell it before we made it. Some might think that is crazy, but we needed to know the demand was there. We soon found out it was. People were really on board with it, and we had to act fast. It got to a pivotal point where we could not deliver directly to our ever-growing customer list, so we found other established milk rounds willing to help, and we worked with farmers who had bottling facilities. We couldn't have gotten Oato off the ground without this initial support in the early days.
After we took on our production site, we were able to produce large volumes of Oato to cater to the demand from milk rounds across the country. 3.5 years on from starting Oato, we are now available through all major milk rounds nationwide.
What is Oato’s biggest achievement to date?
We now operate from our own site which is 55,000 square feet. For us as a small brand to build our own production facility within 3.5 years from launch, with the capacity to truly supply across the demand in the UK, feels like a great achievement. Almost all UK household postcodes can get Oato delivered to their doorsteps up to three times per week, but we will hopefully soon be expanding across all major retailers.
Have there been any particular challenges on the company’s journey so far? If so, how have they been navigated?
Plenty. We launched just before Covid, which caused havoc in the supply chains across the UK, then there was the Ukraine war which increased inflation. It’s been a journey of ups and downs, but because we have a strong customer base, we’ve been determined to make sure we don’t miss a single delivery for our customers.
How does Oato ensure its ingredients are sustainably sourced?
Oat milk is a product that can be made mainly from UK ingredients, and that’s been our mission from day one. This means we can work with local suppliers to us, which helps ensure they’re sustainably sourced.
For aspiring start-ups in the plant-based food and beverage industry, what valuable advice or insights would you share to help them navigate the challenges and opportunities in this dynamic sector?
My advice is start selling before committing too much to the product and production development. You have to have an idea and concept that will work. Usually this can be proven before over committing in terms of time and costs.
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