Oatly enters Starbucks cafes nationwide as it prepares for a big year

Oatmeal is officially the mainstream.

Starbucks cafes nationwide have Oatly’s substitute for non-dairy products starting Tuesday, the coffee chain said Monday. The oat milk will be included in Starbucks’ spring menu through the new Iced Brown Sugar Oatmilk Shaken Espresso.

For Oatly, coffee shops are an important way to introduce consumers to their distinctive product. Consumers can try oat milk – usually for a small extra fee, which is common for alternatives to milk – without buying a whole carton.

The approach has helped Oatly create a large fan base and hold on to it, even as new competitors like Chobani or private label products enter the market. In recent years, sales of oat milk in the U.S. have climbed more than 170% during the 52-week period ending February 13, compared to the same time a year ago, according to Nielsen data.

The permanent menu addition by the coffee giant is the latest major announcement for Oatly, which debuted in US coffee shops just five years ago. The Swedish company aired its first US ad in early February with a Super Bowl spot showing its CEO singing about oat milk. Oatly announced Tuesday that it has confidentially applied for an initial public offering in the U.S.

In 2019, Starbucks added oatmeal from Oatly rival Elmhurst 1925 at select luxury reservation venues. Last year, it began testing a wider audience with Oatly’s version through a launch in the Midwest. The coffee chain has added more vegetable alternatives to the menu in an effort to attract new customers and be more environmentally friendly.

Coffee shops have always played an important role in Oatly’s expansion strategy. In 2016, the third wave coffee chain Intelligentsia Oatly started serving at its cafes. The company focused on getting baristas and coffee drinkers addicted to the creamy texture of oatmeal and on foaming before going to grocery stores.

A shortage in 2018 led to eBay listings for high-priced Oatly cartons and motivated the company to open its first U.S. plant in New Jersey for the first year. Oatly has also expanded into new categories, such as oat-based versions of yogurt and ice cream.