MINNEAPOLIS – SunOpta, Inc. made oat milk processing a strategic priority in 2018 and began making investments to become a leading manufacturer of the product. Today, oat milk is on track to be the leading plant-based beverage sold by the company. Now SunOpta management has made the development of a nutrition beverage business a strategic priority.

Michael Buick, general manager of SunOpta’s Plant-Based Food and Beverage business unit, forecasted sales in the new category will reach $50 million by fiscal 2025.

“We’re going to leverage our core capabilities (in aseptic beverage processing) to get into nutrition,” he said June 2 during the company’s investor day presentation.

SunOpta is adding the capabilities to process 330 ml packages, the primary format for ready-to-drink nutrition and protein beverages. The company also is in negotiation with a “leading brand” in the category to buy 90% of SunOpta’s capacity, Buick said.

“I think there’s a lot of room to run,” he said. “We’re very excited to be able to partner with a leading brand to really kind of create a foothold in that category.”

The initial foray into the category will focus on whey-based beverages, said Joseph D. Ennen, chief executive officer.

“We would need to add incremental capacity to really drive hard against the plant-based side of it, and we would look to do that with a partner,” he said. “These are expensive manufacturing lines. They are massive. You need volume flowing through them.

“I mean you couldn’t put a single line in and say we’re only going to run plant-based protein drinks. You wouldn’t like the look of that for the first couple of years … We’re getting into it with the whey-based drinks, but we are fully looking to bring our plant-based milk manufacturing knowledge and expertise to bear there and help drive and build the plant-based side of it.”

Buick also noted during his presentation that oat milk sales have surged for SunOpta.

“Oat in 2022 will be the largest type of anything that we do,” he said. “If this was 2018 … oat would be one-third of 1% of our total business — one-third of 1%. In 2022, it will be one-third of our total business.”

Looking ahead to fiscal 2025, he forecasted that SunOpta’s oat milk sales will double from $80 million in fiscal 2021 to $200 million. The growth will be driven by expanding beyond its core shelf stable oat milks and creamers into oat milk base, oat milk lattes, oat milk with protein, oat ice cream and oat spreads.

“Oat is the fastest-growing segment in plant-based milk,” Buick said. “Shelf-stable, refrigerated, retail or foodservice — the leading national brands have less than a 40% ACV at retail. There’s not enough extended shelf-life processing. There’s not enough aseptic processing. And there’s, most certainly, not enough oat extraction in the market to fuel and to service the demand of oat milk.”

SunOpta has plans to build out its oat extraction capabilities in California.

“You can imagine, again, when the leading brands have a 40% ACV, they're busy building refrigerated extended shelf-life capacity,” Buick said. “And they're counting on us to build more oat extraction.”