Oat-based Beverage Market

Oat-based Beverage Market Outlook from 2024 to 2034

The global oat-based beverage market is estimated to reach USD 1874 million by 2034 and rise at a CAGR of 8.1% during the evaluation period. The industry is anticipated to attain a value of around USD 859.4 million in 2024. Growth is mainly attributed to the universal shift towards veganism and rising awareness to take steps against animal cruelty.

The plant-based beverage market has witnessed significant growth in recent years, with oat-based beverages emerging as a dominant category across the globe.

Looking ahead, the oat-based beverage industry’s future looks promising. In August 2023, for instance, Moma Foods, a United Kingdom-based oat milk company, stated that oat is the future of the plant milk category.

The cereal grain makes up 52% of the dairy alternatives category in the United Kingdom, with a growth rate of 12%. As leading oat-based beverage companies continue to introduce new products tailored to evolving consumer preferences, demand for oat-based beverages is expected to rise significantly.

While the oat-based beverage industry is generally more sustainable compared to dairy, it still faces scrutiny regarding the environmental impact. Hence, manufacturers are prioritizing sustainability measures, such as optimizing production processes, minimizing water usage, and exploring regenerative agricultural practices to maintain the industry’s sustainability credentials.

Ongoing advances in technology, such as the ultra-high-temperature processing (UHT) technique, are making storage and transportation easy while lowering the environmental impact. The technique helps to kill all the bacteria and extend the shelf life of products, which is pushing demand.

Companies are also changing the packaging of new beverages by using recyclable paper-based cartons to reduce the overall environmental footprint. A few players are taking advantage of data analytics and artificial intelligence to reach a wide audience and stay ahead of the competition by introducing products tailored to varying needs.

The plant-based beverage industry is saturated with traditional players and emerging, innovative start-ups. These brands are constantly vying for consumer attention, which is creating a complex scenario to earn consumer trust and loyalty for continued growth.

Attributes	Description
Estimated Global Oat-based Beverage Market Size (2024E)	USD 859.4 million
Projected Global Oat-based Beverage Market Value (2034F)	USD 1874 million
Value-based CAGR (2024 to 2034)	8.1%

Key Industry Highlights

Emergence of Doorstep Delivery Services to Fuel Demand

In recent years, customers have been inclined towards convenience while making purchases. Brands are readily capitalizing on this convenience trend by offering subscription-based and doorstep delivery services, thereby driving steady growth in the plant-based product industry.

Brands have also made the process easy for customers to maintain a healthy lifestyle by providing the option of regular home deliveries. These doorstep delivery services have enabled customers to purchase things without having to leave the comfort of homes. This is further contributing to a convenient experience for modern consumers while helping brands increase consumer base and revenue.

Brands are set to continue to innovate and offer new products that cater to customers' evolving needs and preferences. This convenience trend is projected to play a crucial role in propelling growth of the plant-based beverage sector, including oat drinks.

Individuals with Lactose Intolerance Seek Alternatives to Traditional Dairy Products

Individuals with lactose intolerance and dairy allergies are actively seeking substitutes for conventional dairy products. These substitutes mainly include plant-based drinks such as soy, almond, or oat milk. The easy availability of these products allows individuals with certain dairy-related conditions to enjoy a wide variety of delicious a nutritious food.

Surging Demand for Oats Putting Pressure on Product Supplies

The oat-based beverage industry has seen significant growth in recent years, with more consumers opting for healthy and eco-friendly alternatives. This increasing demand for oat beverages has put immense pressure on the supply chain.

Companies will be required to find sustainable ways to increase oats production while maintaining quality and affordability for long-term business stability. These issues in production are anticipated to lead to fluctuating prices of oats, thereby posing a challenge for manufacturers to balance production costs while maintaining competitive consumer prices.

2019 to 2023 Global Oat-based Beverage Sales Analysis Compared to Demand Forecast for 2024 to 2034

The oat-based beverage market value increased at a CAGR of 10.4% between 2019 and 2023. The total size at the end of 2023 reached USD 787.7 million. This high growth was fueled by increasing demand for healthy and sustainable food choices. At the same time, the easy availability of oat milk and other plant-based beverages in retail stores, cafeterias, and online e-commerce platforms augmented sales.

Online sales for plant-based beverages skyrocketed during the historical period when lockdown restrictions were in place due to the COVID-19 pandemic. This surge in online sales highlighted the adaptability and ability of plant-based drink companies to meet consumer needs during challenging times.

Analysis predicts continued growth for the oat-based beverage industry in the upcoming decade, with a CAGR of 8.1% from 2024 to 2034, taking the value to USD 1874 million by 2034. This growth is attributed to the increasing popularity of oat-based drinks, mainly oat milk. The drink has seen widespread use in various applications such as coffee, smoothies, and baking.

The expansion of distribution channels is anticipated to further fuel growth, making oat-based drinks a prominent segment in the ever-growing plant-based beverage industry. With changes being made in manufacturing and packaging, these products are set to achieve close to zero carbon footprint soon, thereby increasing the total sustainability profile.

Country-wise Insights

The following section offers an analysis of the oat-based beverage industry across various countries from 2024 to 2034. South Korea is leading the trend with an estimated CAGR of 10.2% throughout the forecast period, closely followed by Japan and China with a 9.9% and 8.9% CAGR, respectively.

All three countries are anticipated to create increased oat-based market opportunities in Asia Pacific. The section will further provide a regional analysis of the oat-based beverage sector, discussing the latest trends, growth opportunities, and restraints in particular countries.

Countries	CAGR 2024 to 2034
United States	8.4%
China	8.9%
United Kingdom	9.4%
Japan	9.9%
South Korea	10.2%

Rising Entry of Start-ups with Unique Strategies in the United States Fuels Sales

The United States oat-based beverage market is projected to surge at a CAGR of 8.4% during the forecast period, totaling USD 333.5 million by 2034. This surge is attributed to the robust coffee culture coupled with the rising popularity of plant-based diets in the country.

As people around the country are becoming health conscious, there is a rising demand for lactose-fee and dairy alternative beverages as well as snacks. As a result, the United States oat-based snacks and beverage market is experiencing an upsurge. The well-established retail landscape of oat-based beverages in the United States further strengthens sales.

Established oat-based beverage companies in North America are facing tough competition from innovative start-ups and traditional dairy companies. These players are entering the United States due to vast growth potential in terms of revenue. They are focusing on unique selling points and attractive functionalities to allure customers.

Increasing Government Support in China to Motivate Healthy Eating Habits

The oat-based beverage industry in China is estimated to witness significant growth at a CAGR of 8.9% during the assessment period. This increased CAGR is projected to bring a value of USD 295.7 million by 2034 to the non-dairy beverage market. High demand is set to be driven by the growing popularity of Western coffee culture in China.

Lactose intolerance is common in China, thereby creating a significant demand for dairy alternatives. Further, the government in China is actively initiating healthy eating habits by taking significant measures. Many government agencies are reducing their dependence on dairy products, which is favoring the growth of the plant-based beverage industry.

Many international brands are present in China, like Oatly and others. Despite their penetration, China-based brands are emerging as leading players to serve the local tastes and providing competitive pricing.

Players in South Korea Benefitting from the Shift toward Veganism and Flexitarianism

The oat-based beverage sector in South Korea is predicted to increase at a CAGR of 10.2%, totaling a value of around USD 120.6 million by 2034. The growth in the nation is significantly driven by veganism and flexitarianism.

Such practices are set to be the key drivers of the oat-based beverage industry in South Korea. However, the price point of oat-based beverages is a sensitive issue in the country. This is mainly attributed to the expensive nature of oat-based products compared to traditional milk that is produced locally.

Category-wise Insights

The section below offers detailed information on the dominant segments of the oat-based beverage industry and anticipates growth rates for the next decade. This detailed segmentation of the industry helps companies to make decisions and formulate strategies accordingly.

Rising Sustainability Concerns Push Demand for Organic Sources

Segment	Organic (Source)
Value Share (2023)	65%

The organic source segment dominated the industry, accounting for a market share of 65% in 2023. The segment is estimated to record a CAGR of 7.8% over the forecast period. The organic category remains widely sold mostly due to several health benefits owing to the use of clear ingredients.

Oat beverages having organic certifications strictly adhere to government regulations and third-party inspections. Organic beverage manufacturers tend to prohibit the use of animal by-products in fertilizers, which is appealing to customers who prioritize animal welfare. Companies are focusing on releasing organic beverages to establish trust through transparency.

Plain or Original Products to Gain Impetus with High Affordability

Segment	Plain/Original (Product Type)
Value Share (2023)	62%

The plain/original product type generated a market share of 62% in 2023, thereby creating significant revenue-generation opportunities for oat-based beverage manufacturers. The segment is anticipated to rise at a CAGR of 7.6% through 2034. The dominance of plain/original product type is attributed to the ability to function as a true substitute for dairy. This type of product can also be easily used in various recipes and beverages, thereby bolstering demand.

Plain oat milk contains fewer added sugars and is less processed compared to flavored milk. Hence, the drink helps cater to the needs of those consumers looking for clean and simple ingredients. Plain beverage is also less expensive compared to flavored oat milk options. Thus, meeting the demand of budget-conscious consumers seeking affordable plant-based milk alternatives.

Competition Outlook

The oat-based beverage market players are fiercely competitive. To expand in this market, they are constantly exploring current trends and developing their products accordingly. Certain key players, such as Oatly, Chobani, and Califia Farms are internationally recognized and boast of a loyal consumer base. These players maintain their customer base by releasing high-quality, innovative product offerings.

For this, they allocate finances for research and development activities aimed at improving the taste, texture, and nutritional value of oat-based beverages. New technologies are being explored by brands to improve the shelf life of oat-based beverages. For instance, advanced packaging technology is used to improve the storage and transportation of these products.

The packaging products are also designed to have reduced environmental impact, which resonates with the sustainability-conscious consumers. Additionally, data analytics and artificial intelligence are continuously becoming advanced. This is helping firms to understand consumer preferences and create new oat-based beverages customized according to changing consumer demands.

Industry Updates

• In April 2024, YOOK, an Estonian oat milk brand, entered the Asian and Middle Eastern markets, to meet the rising demand in the Middle East for oat-based beverages.
• In January 2024, Oatly, based in Sweden, introduced two innovations in the United States, namely, the Unsweetened Oatmilk and Super Basic Oatmilk, catering to the evolving preferences of consumers.
• In February 2023, India-based Life Health Foods launched So Good OAT beverage, a dairy-free, plant-based milk in the country.

Leading Oat-based Beverage Brands

• Oatly AB
• Califia Farms
• Alpro
• Quaker Oats Company (PepsiCo)
• Pacific Foods of Orego
• Hälsa Foods
• Rude Health
• Elmhurst 1925
• Happy Planet Foods
• Nature’s Path Foods
• Pureharvest

Key Segments of Market Report

By Source:

The industry is segmented into two sources, namely, organic and conventional.

By Product Type:

Based on product type, the industry is categorized into plain or original and flavored.

By Specialty:

The market has various specialties, including gluten-free, dairy-alternative, heart-healthy, and others.

By Distribution Channel:

The oat-based beverage market growth is attributed to various distribution channels that include retail stores, online retail, specialty stores, and food service/HORECA.

Frequently Asked Questions

What is the global oat-based beverage market value?

The market is set to be valued at USD 859.4 million in 2024.

Who are the leading oat-based beverage players worldwide?

Oatly AB, Califia Farms, Alpro, and Quaker Oats Company (PepsiCo).

What is the estimated growth rate of the oat drink market by 2034?

The market is expected to rise at a CAGR of 8.1% by 2034.

Which product type is leading the industry?

The plain/original product type is leading the industry.

Is there oat-based beverage demand in China?

China is projected to reach USD 295.7 million by 2034.

What are the growth drivers for oat-based beverages?

Shift towards veganism and rising consciousness of the environment.