Oatier plans to scale for international business

Oatier, a Kildare-based food company that specialises in oat products, is planning to expand into new export markets across Europe as demand for dairy alternatives continues to grow.

The start-up food company, which was founded in 2015, launched its first oat-drink product in August this year and is now planning a new funding round to help scale the business, with Enterprise Ireland set to invest through its high-potential start-up fund.

The company has already raised €1.4 million in investor capital over two separate funding rounds in 2023.

Neil Brady, managing director of the Naas-headquartered firm, said the company started life exporting commodity bulk oats to customers in Italy and Slovenia. However, in 2019, Oatier began research into creating a new oat-based drink that would add value to the staple grains produced by Irish farmers. The research took four years to complete before Oatier had a product it was ready to bring to market.

“Our goal was to be better than the market leaders at the time, but I have to admit the development work took longer than we thought,” Brady said.

Oat drink is an alternative to traditional milk and has grown rapidly in popularity over recent years, particularly in the food service industry where cafés and baristas have seen strong growth in consumer demand for the product.

Made from a combination of oats, water and oils, oat drinks are marketed as low-carbon footprint alternatives to traditional dairy products.

Brady said the science that goes into creating an oat drink is complicated.

“Enzymes and a process called enzymatic hydrolysis are key to how the product is made but this is way out of my depth,” he said.

Brady added that this process is used to improve the texture of the drink and improve its behaviour when foamed, which is especially important for cafés.

“We now have a fantastic product, but after we had the first breakthrough on a lab level, it took another while to bring it into production. One of our main selling points is that we use only Irish oats, but surprisingly there is no facility in Ireland that is able to produce the product for us,” Brady said.

Oatier is currently produced by a contract manufacturer in mainland Europe, which has the potential to increase production up to 20,000 litres per day as demand grows.

Brady said this will be important as the company begins to scale up sales of its new oat drink.

“We didn’t want to start by filling up 100 bottles a day. We wanted to make sure that we are ready to scale,” he said.

Oatier, which currently employs 12 people across the business, generates most of its sales from the Irish market, while it also ships small volumes into the British market. It has also exported some product to a customer in Mexico.

“A Mexican coffee roaster was in one of the cafés in Ireland that uses Oatier and got in contact with us because he could not find something similar in Mexico. Now a pallet of our oat drink is on its way to Mexico, which is very exciting,” Brady said.

The main target market for the company, which will generate sales of around €500,000 this year, is the food service industry, Oatier does plan to launch a consumer-branded product for the retail market in time.

“We feel like we are in the right space at the right time. Some cafés tell us that 60 per cent of coffee sales are now ordered with oat drink,” Brady, who joined the firm in 2020 having previously worked as a business consultant, said.

In early 2024, Oatier plans to launch its second oat-drink product, which will be marketed as broader alternative to traditional milk and not as specifically focussed on the coffee segment of the market.

“The classic oat drink will be for regular use, for example to pour over cornflakes or just as a drink,” Brady said, adding that the company also wants to expand its product line-up to include flavoured oat drinks or drinks with increased protein.