Dive Brief:
- Oatly Global President Jean-Christophe Flatin will be the company’s new CEO as of June 1. Current CEO Toni Petersson, who has led the company since 2012, will transition to co-chairperson of the board of directors.
- Flatin, a three-decade food industry veteran, first joined Oatly last year. Through his leadership, the company simplified its organizational structure. He led the company toward a new “asset light” operating structure, selling some of its manufacturing capacity to Ya YA Foods in January.
- The Swedish oat milk giant is reaching firmer financial footing, beating expectations with both sales and gross margins up and net losses down in its quarterly earnings reported Tuesday morning.
Dive Insight:
Oatly, which has found itself struggling with operating and operational challenges in the last 18 months, had many positive things to share on Tuesday morning, including a promotion for one of the people who helped the company get to this point.
Before getting to Oatly, Flatin had worked at Mars in positions that included managing brands in areas such as pet food and chocolate. He was hired at the same time as Chief Operating Officer Daniel Ordonez, and their hiring was seen as a way to bring more solid and established leadership to the quickly growing company.
Oatly board co-chairperson Eric Melloul said in a release that the company’s board and Petersson worked on a succession planning process when hiring Flatin last year, so this transition was expected.
“Jean-Christophe is a proven leader and the ideal person to help usher Oatly in our next phase,” Petersson said in a statement. “He has already strengthened our company for the better by putting our supply chain back on firmer footing, renewing our focus on innovation, and enabling our organization to go on offense to drive profitable growth.”
In its earnings report released Tuesday, it’s clear that Oatly is on the path to that type of growth. Total revenue for the three months ending on March 31 was $195.6 million, 17.7% more than the prior year. The company posted sales growth in all three regions in which it does business. Gross profit more than doubled compared to the same quarter a year ago, and the gross margin was 17.4%. Sold product volumes have also grown — 128 million liters in the most recent quarter, compared to 118 million liters in the year-ago period.
And while Oatly still posted an operating loss for the quarter, Petersson said on the earnings call the company is on track to be profitable by 2024.
In January, Oatly announced it was selling much of its manufacturing capacity in Ogden, Utah and Fort Worth, Texas to contract manufacturer Ya YA Foods Corporation for $98.1 million. Petersson said on Tuesday’s call that the sale and transition is progressing well, and is allowing Oatly to consolidate its co-packer network in the United States. A final transition, including terminating most of Oatly’s co-packer contracts, should be done in the third quarter, he said.
Many of the larger challenges Oatly faced before Flatin came aboard seem to have abated through behind-the-scenes work on manufacturing and supply chain, new contracts the company negotiated, aggressive marketing and expansions in retail and QSRs worldwide. On Tuesday morning, investors supported the announcement, bringing Oatly’s share price up nearly 7% in early trading.
