“In terms of investment, obviously I’ve had quite a bit of interest over a long period of time. This one is very different as it is essentially my baby, along with the other two [co-founders]Smith said in a nod to Adams and Daniel Rootes, who is an investment adviser and heads sales for Oat Milk Goodness in Western Australia.
“It’s really exciting to start something like this.”
The trio are already off to a rocky start: With the product launch in late 2022, some four years after the idea was first conceived, Smith and his co-founders face stiff competition in the crowded barista-favorite alternative milk scene, Mainly from Sanitarium’s Alternative Dairy. Co and Milklab.
“It’s become quite a saturated market,” Smith said, adding that the process was “much more difficult” than they thought.
“We wanted to perfect our recipe and get everything right, and it took a lot longer than we thought… We’re very proud of the product we have now.”
Nonetheless, the market opportunity is there: Australian revenue from milk replacers rose by nearly $30 million in 2021 to $327 million, a figure expected to reach $550 million by 2026.
In addition to their use of Australian-grown oats, the trio are keen to differentiate the goodness of oat milk through their deliberate choice of olive oil in the production process rather than industrial seed oils like sunflower oil. or canola.
“Baristas, when they make coffee, they want to make sure that it stretches well, that it doesn’t separate,” Adams said. “Oat milk is a little different. It seems to have a lot more similarities in the way it reacts to coffee compared to cow’s milk… [and] in terms of creaminess and mouthfeel.”
The same drive that made Smith a world-class athlete is driving him as a budding entrepreneur. In a busy market for alternative milks, Oat Milk Goodness is the underdog: The company is still in negotiations with major supermarkets for coveted shelf space to face consumers directly and gain brand recognition, but the team already has global ambitions to eventually expand. in America and India (they already have a small presence in Singapore).
By the end of the year, they want to have stock in at least one of the supermarket giants (“maybe two,” Adams says) and more than double the number of shops and cafes that use their product from 300 to 750. – up is averaging quarterly revenue growth of 57 percent over the past four quarters.
“There’s a lot to accomplish here, but we think we have the right infrastructure in place,” Adams said.
To help get things off the ground, Oat Milk Goodness completed a $1.6 million capital raise, led by Rootes, from friends and family to spend on marketing. The startup currently has a team of six, including the three co-founders.
“The funds we have will keep us going for at least two years, probably longer, and we’ll see how we go,” Rootes said.
For Smith’s part, he seems to be milking his new job as an entrepreneur and says it’s “pretty satisfying” to see what started as an idea turn into a physical product in a cafe.
“I can see the business from day one and see it grow and participate in all the decisions. It’s something that excites me.”
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