Why Is There An Oat Milk Shortage?

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Food Dive claims that at the end of 2021, significant rain affected the rail lines in charge of transporting the oat supply, causing even more delays and subsequent price spikes. The good news is that representatives for various modes of transportation have stepped forward to reassure the public that despite some obstacles, items like oats have been packed and are prepared to leave as soon as the weather improves. Thus, companies like Oatly still intend to “reach its growth targets for 2022,” but not everything seems to be going according to plan.

Due to a scarcity of oats and underlying transportation issues that have made it difficult to keep up with the surge in demand, the alt-milk company, which experienced a major boom during the epidemic, has been forced to scale back its goals. Food Dive reports that the current value of its stocks has dropped by 80%. All of this means that if you enjoy the oat milk from Oatly, get ready to feel the financial pinch this year. Hopefully, these transportation issues will be resolved, but if you adore this kind of plant milk, you could still have to deal with oat supply issues.

Will there be a 2022 Oatly shortage?

For sixteen months, the world hasn’t been adorable. A plague of cicadas quickly followed by ongoing lockdowns caused by a global you-know-what successfully kept us under lockdown. Oatly is now in low supply. Come mid-year 2022, wake us up. We’ve learned how to create oat milk up until that point. (DIY saves the day!)

It’s difficult to understand why our holy grail oat milk is so difficult to locate. Could it be that Starbucks receives it first? Or a rumored holdup in an Oatly factory’s opening? Or are they merely playing havoc with our feeble minds? We urgently require solutions since OUR COFFEE IS CURDLING.

Our pals informed us the following, “Simply try a different oat milk. They were relegated to the “acquaintances because they lack comprehension. Heck, we still don’t fully comprehend it. We don’t wish to compete with other oat milk brands, but

A quick introduction: Oat milk has been sold in the United States since the 1990s. The 1990s, ah. They had a lot of positive aspects, like TLC and Tamagotchis, but oat milk wasn’t one of them. It was just awful (i.e., shelf stable). It eventually became as common as cow’s milk in the fridge, so it was no longer strange, though it was still not very well-liked.

Then Oatly made its way to the United States with a fantastic product as well as an AMAZING marketing team. Both experts and beginners in oat milk like its lighthearted, lighthearted approach. Around this time, this hitherto obscure genre’s expansion into popular culture skyrocketed. Oprah Winfrey and a group of investors made a $200 million investment in Oatly, which completely transformed the game and attracted attention. The corporation is currently valued at between $10 and $13 billion. Having a B.

However, it’s now difficult to obtain, and, well, we’re not angry; just disappointed. No, we’re furious. However, our therapist advised us to use our rage constructively. Thus, we made the decision to manufacture our own oat milk. The first few batches were discouraging, but we eventually discovered the ideal ratios, and we’re thrilled to share them with you so you can make your own oat milk as well, before Oatly decides to twirl down from the holy heavens and bless us once more with the priceless drops of its golden soul-salve.

Why will milk be scarce in 2022?

A 15% price increase resulted in the average milk price rising from $3.53 in 2021 to $4.19 in 2022. The conflict in Ukraine, tight labor markets, and rising fuel prices all have an impact on the supply chain, driving up the price of milk.

Retailers in the Midwest will only have two distributors to select from for their milk products going forward due to the closing of the milk processing factories. The only milk processors left in Northern Illinois, Wisconsin, Michigan, Minnesota, the Dakotas, and Missouri are DFA and Prairie Farms.

Midwest consumers may anticipate seeing milk prices grow more quickly locally than in other regions of the country since there is less supply on the market and less competition.

Is there a scarcity at Oatly?

Ryan Knutson: However, as Petersson sang to the crowd about oat milk, Oatly was fighting behind the scenes to produce oat milk, which was a very difficult task.

Oatly introduced a new partnership a month after making its Super Bowl debut in 2021, which has the potential to take Oatly mainstream. This is Jesse.

Jesse Newman: Oatly signs a contract to provide Starbucks with oat milk, and Starbucks has also introduced a number of new drinks that use oat milk. It’s a really big deal for them to land such a major account, and it also kind of opens up the world of potential consumers of oat milk since Oatly is no longer only available in some cool, expensive, independent coffee shop in New York City. Theoretically, oat milk is now available in smaller American towns and cities.

R. Knutson Things initially went really well. Starbucks baristas were busy using Oatly to make specialty drinks like honey oat milk lattes and espressos with oat milk swirled in. Until they began to run out of oatly, that is.

Jesse Newman: So, within only a few weeks of its launch, Starbucks’ inventory shortages became so severe in some areas that the company was forced to temporarily remove its oat milk and drinks made with it from its app while it replenished.

R. Knutson Starbucks eventually hired a second oat milk vendor to assist in satisfying their oat milk requirements. However, Jesse claims that Oatly had previously experienced supply issues with Starbucks. In reality, the business had been having problems producing enough oat milk for years, at least since 2018.

Jesse Newman: As they attempted to increase production in the US, they encountered numerous difficulties. I also consider that there were many growing pains for the Swedish corporation that came to the United States in order to meet people, form partnerships, and find out who to collaborate with and how to make goods abroad.

R. Knutson When Oatly initially began producing oat milk in the United States, it was entirely dependent on contractors, but outsourcing manufacturing was costly and occasionally unreliable. Oatly began constructing its own American factories in an effort to accelerate the scaling up of manufacturing. And this is where, according to Khadeeja, things only became trickier.

Khadeeja Safdar: Their first facility was established in Millville, New Jersey, after which a second plant was established in Ogden, Utah. We talked to a number of the workers who were engaged in starting up those factories, and they indicated a number of difficulties, including inadequate planning and uncertainty about who was in charge. Since the demand in the U.S. is increasing, one employee claimed that they simply tried to assemble a plant as rapidly as they could. They therefore want to start operating these plants as soon as possible because rivals are encroaching and taking advantage of the demand. So they hired consultants, attempted to hire staff quickly, and tried to basically move on this swiftly, but they were having problems.

Ryan Knutson: Oatly encountered issues at both of its American facilities. For instance, the corporation was creating a lot more wastewater than anticipated at its Millville plant in New Jersey.

Khadeeja Safdar: They had informed the local authorities that they would discharge a specific volume of wastewater, which is essentially what you flush down the toilet after you’re done. Therefore, it might be water, a mixture of oat base residue, or cleaning agents. They then began going beyond that limit; I believe it was more than four times what they had originally told the city.

Ryan Knutson: Until the issue was resolved, Oatly had to halt production at the facility. Although an Oatly representative claimed that the plant’s construction timeframe was typical and that the wastewater treatment problems had been fixed, things haven’t exactly gone according to plan in Ogden, Utah. A corporate presentation claims that Oatly executives first informed the board of the company that they required $50 million to start the Ogden, Utah production. However, a year later, when the factory finally began making oat base, the cost had increased to $100 million, according to a source with knowledge of the situation. According to workers, the plant continues to experience technological problems that keep it from producing as much oat base as it might.

The pandemic made opening the Ogden factory more challenging, according to an Oatly spokesman. Additionally, Oatly shortages were brought on by the enormous demand for oat milk in the United States, according to firm CEO Toni Petersson in an interview with Jesse and Kadheeja. He claimed that despite the company’s best efforts to meet customer demand, it fell “below our expectations.” Even if we had Ogden, he said, we would not have been able to meet the demand. Who is meeting the enormous demand for oat milk if Oatly, while having produced it, is unable to properly meet it?

Jeremy Newman As a result, many new businesses have stepped in and are now producing oat milk products. They vary as well. A line from HP Hood, a 176-year-old food and beverage business best known for its dairy products, is currently in the lead in its category.

R. Knutson Hold on a second. Is a dairy corporation the major producer of oat milk in the United States?

That’s correct, Jesse Newman. A large dairy company also produces oat milk. Another illustration is Chobani. Oat milk was the Greek yogurt manufacturer Chobani’s first venture outside the yogurt section. These two large dairy corporations, or companies with a dairy-related past, are entering the market for plant-based foods.

Jeremy Newman It’s a good question, I agree. They are rapidly growing throughout the world, not only in the US. Asia and Europe, specifically. And I believe that after looking at the data, they believe they still have a lot of time to attempt to persuade customers to switch from cow’s milk or other dairy milk to oat milk. They are moving forward at full speed, but there are growing pains and mistakes. There are now other businesses that they must compete with in the category that they made, so any manufacturer who wants to continue in the game must take note of those things.

R. Knutson The CEO of Oatly claims that various actions may have been taken. It was difficult to spend so much money while oat milk was still gaining popularity in the U.S., he said Jesse and Khadeeja, adding that Oatly definitely should have started establishing plants earlier. Are Oatly’s difficulties a lesson for other businesses?

Khadeeja Safdar: This demonstrates, in my opinion, that marketing is only one aspect of business. It’s a very crucial component of a business, and you can get a lot of people excited about a service, a product, or a concept, but frequently delivering on it is an entirely different story than actually carrying it out.

Jesse Newman: I believe that it also demonstrates how difficult execution is. It can be challenging to just sort of figure out the guts and bolts of company, especially in a foreign nation, developing production facilities, and simply cranking out a product. There are therefore initial efforts to create demand for your goods, but fulfilling that need is a very important aspect of company that you don’t want to overlook.

Why is Oatly milk acting this way?

The goal of Oatly, a Swedish company that produces oat-based milk, ice cream, and cream cheese, is to replace cow’s milk with alternatives that will lessen the impact of climate change. Oatly has conducted extensive research to demonstrate that manufacturing cow’s milk results in far higher greenhouse gas emissions than producing oat milk. Fans of Oatly who support its environmentally friendly business model were therefore shocked to learn that Oatly had sold a 10% stake in its company to a group led by Blackstone, an investment company that has been connected to the destruction of the Amazon rain forest and backing for U.S. President Donald Trump (via Green Matters). In addition to withdrawing the United States from the Paris Climate Agreement, the Trump administration has taken more than 130 other actions to stop addressing climate change (via BBC).

According to CNBC, Blackstone CEO Steve Schwarzman contributed $3 million to a political action group that backs Trump’s re-election. Blackstone has also been charged by the United Nations of contributing to the global housing crisis by raising rents at its residential buildings (via The Guardian). Unhappy Oatly supporters have announced their boycott of their preferred oat milk on social media. Among them is Less Waste Laura, a Twitter user who declared, “I’m not going to put my money into firms which potentially look to be selling out to the highest bidder.”

Has Oatly turned to the dark side or are they attempting to improve the planet from within the system?

Why is oat milk usually unavailable at Starbucks?

We have temporarily removed oatmilk and drinks made with oatmilk from the app until we are able to replenish inventory since there is a shortage of oatmilk in some US retailers. We value your patience as we work diligently to replenish the supply of oatmilk in stores. Thanks!

Oatly is down; why?

S&P Global Market Intelligence data shows that Oatly Group (OTLY 2.24%), a manufacturer of oat milk, saw a 28.9% decline in share price in April. The firm not only significantly underperformed the S&P 500 for the month, but it has also lost almost 90% of its value since its June all-time high, which it reached soon after its May 2021 IPO.

Shareholders are undoubtedly glad that Oatly stock hasn’t dropped further in May given how much it has already dropped. Even though its recently released financial results for the first quarter fell short of experts’ forecasts, it has remained steady so far this month.

In 2022, which foods will be in short supply?

A sluggish transition back to life before the pandemic began in 2022. There are more people out and about, fewer health restrictions, and a lot of activities, such sporting events and concerts, have returned. To enable employees to continue working from home while still finding time to come into the office, businesses are developing hybrid work arrangements.

Due to the enormous demand in response to the health risks that COVID-19 posed, household essentials like toilet paper, hand sanitizers, and disinfectants became limited towards the beginning of the pandemic in 2020. Some products were more pricey or challenging to find nearly two years later.

Groceries and Food

Grocery stores all around Europe and North America are increasingly stocking empty shelves. Over 50% (51%) of customers polled in March 2022 reported suffering product shortages of particular categories of goods and food, up from 43% in September 2021, according to Morning Consult’s most recent U.S. Supply Chains & Inflation research.

Product shortages, however, change from year to year and from one place to another. Some merchandise might be on hand at one store but not in another.

“According to Katie Denis, vice president of research for the Consumer Brands Association, which represents the consumer packaged products sector and includes firms like General Mills and Kellogg, the condition is patchy and not pervasive. “It’s not like when the pandemic first started, when people frantically cleaned stores to stockpile.

Meat (particularly meat and poultry), eggs, baby formula, canned foods, and paper products are only a few examples of items that eventually became expensive or ran out.

Aluminum

Due to the limited availability of aluminum, a key ingredient used in the production of cans, one of the main reasons why canned foods are more difficult to locate in stores. Monster Beverage, a well-known energy drink manufacturer, struggled to meet the rising demand for their products. The production of aluminum and other energy-intensive metals was slowed down as a result of China’s efforts to minimize its carbon emissions.

European gas price increases have also slowed output, which has resulted in a decline in world stockpiles. Because aluminum cans are easier to transport than glass bottles, breweries in particular have expanded their demand for them. Cans are a favorite among those who stay at home because they are ideal for storage in the home.

Semiconductors

Because there is a greater than ever demand for cutting-edge computer microchips, the supply of semiconductors will remain constrained. Semiconductors are essential to modern electronics, from 5G-ready smartphones to high-tech automobiles. Due to the famously difficult-to-sped-up production process for semiconductors, several major companies have a significant backlog. Companies have begun using “strip-down tactics,” or designing products with fewer features to account for short supply, to lessen their reliance on specific chips.

Tampons

On social media, reports of stocked-out feminine hygiene items in supermarkets have gone viral. social media, worrying a lot of American customers.

A significant manufacturer of personal hygiene products, Edgewell, claimed that supply problems in late 2021 and early 2022 were a result of personnel concerns tied to Covid. Major pharmacy chains in North America like CVS and Walgreens report stock shortages in a number of their locations.

Although the supply of tampons and other hygiene products will probably increase, many businesses think the shortfall will only last a few weeks. For instance, Kotex claimed to have a large supply on hand.