Singapore plant-based milk startup sings a new Oat to joy
GOT milk? Interest in alternative and sustainable protein is at an all-time high, attracting billions of dollars in investments and the trendy endorsement of celebrities.
Some experts even believe the pandemic quickened the adoption of plant-based meat and dairy as consumers became more health-conscious and grocery-shopping surged globally.
It was also around this time, as Singapore entered a lockdown in 2020 and many hunkered down in their homes to whip up dalgona coffee, that budding entrepreneur Benedict Lim began experimenting with making his own oat milk.
As an executive in the food industry, he was obsessed with getting it perfect. Lim wanted a drink with a distinct creamy texture that wouldn't overpower other drinks it was paired with. He definitely didn't want the strange aftertaste that has turned many off.
The taste of oat milk varies, he said, depending on the source of the oats, the extraction process and the treatment method.
"I tried everything I could find," Lim said with a pained laugh.
Having spent about 2 years refining and producing the product, the former Kraft Heinz executive has launched a brand called Oatside that wants to take on the likes of Oatly and Minor Figures in markets such as Indonesia, Malaysia and Taiwan.
Oatside's rendition of oat milk has malty notes and many people who grew up in Asia have commented that the drink tastes familiar, Lim said.
His company raised S$22 million in December 2020 in a round led by Proterra Investment Partners Asia, a private equity firm Lim interned at before entering university. Proterra focuses on investments across the food production value chain.
Commonwealth Ventures also participated in the pre-Series A round. The investor is an affiliate of Singapore-based Commonwealth Capital, whose portfolio includes PastaMania, Swissbake and Barramundi Asia.
Wee Teng Wen of The Lo & Behold Group and the family office of Cher Wang, co-founder and chairperson of VIA Technologies and HTC Corporation, invested in Oatside as well.
Most of that money has gone into research and development, which took 6 months, and setting up an oat milk production line, which took 12 months.
Instead of using a contract manufacturer, Oatside has a factory in Bandung, Indonesia where it has access to natural spring water. The quality of water matters, Lim said, because it makes up 80 per cent of the drink.
He declined to say what the factory's production capacity is, but believes it can support the company's expansion in the next 2 to 3 years.
Oatside has started selling to consumers in Singapore through Redmart and Shopee, and will be available in major supermarkets this month (February). The product is available in barista blend, chocolate and chocolate hazelnut variants, and retails for S$6 (Oatly's regular oat milk variant retails for S$6.85 online at NTUC Fairprice).
The company is tapping F&B houses as a marketing channel - a tactic that has been well-employed by rival Oatly.
"Our partners provide a fantastic platform for trials. It's a lot less intimidating to try the new product for the first time when you're in a cafe," said Lim.
Coffee chains Baker & Cook, PPP Coffee and The Coffee Bean & Tea Leaf use Oatside in their drinks and desserts.
Lim has plans to scale the business in South Korea and Japan as well. The 2 markets and China are huge opportunities for Oatside because they have the largest dairy markets, he said.
The 31-year-old is hoping to tap his experience at Kraft Heinz, where he was chief financial officer of Heinz ABC Indonesia and head of mergers and acquisitions for Kraft Heinz Asia Pacific.
"I learnt how a food company works in terms of supply chain management, finance, distribution and marketing. But the most impactful thing I learnt from Heinz was product obsession - how do you create a product that tastes the best?" he said.
Still, Oatside is coming up against some strong competition. Oatly, for instance, has tied up with Singapore's F&B manufacturer Yeo Hiap Seng to invest S$30 million in producing the drink in Singapore.
It's the first time the Swedish company will be producing its popular oat milk brand outside Europe and North America. Oatly raised US$1.4 billion in an initial public offering on Nasdaq in May last year at an implied valuation of around US$10 billion, though its shares have since fallen 67.7 per cent amid heavy competition and supply chain issues.
But players like Oatside and Oatly will likely continue to benefit from the growing alternative protein industry globally. Venture capital investment in the plant-based dairy and eggs space reached US$1.6 billion in 2020, from US$64 million in 2015, according to data provider Dealroom.
Besides Oatside, Singapore-based companies working on plant-based milk include WhatIf Foods, which launched BamNut Milk made from the Bambara groundnut.
Meanwhile, TurtleTree Labs is developing lab-grown cell-based milk and recently raised US$30 million for its exploits.
