Is Oatly On The Verge Of An Oat Milk Meltdown?

I’m peeking out from under my book edits and a crazy news cycle to say helllooo! I haven’t sent a note since Oatly went public two months ago, and maybe it’s just because I’ve been all-in on the Oatly beat this week, but the food industry feels a little different. The big expectations are here. SPACs, IPOs and nine-figure funding deals are flying. And now a short seller is making a lot of investors and industry watchers wonder if Oatly is on the verge of an oat-milk meltdown . Some are even questioning whether it might curdle the broader boom of new food stocks, and the exits investors don't want to dry up any time soon. The fear is out there. One source texted me after my first Oatly short seller story went live, saying it would “terrify other brands planning to list.”?

But frothy valuations don’t look like they’re going away any time soon. Oatly is down 35% from its high near $29 per share on June 11, though the valuation of $11 billion is still really high. The markets value the company at more than 26 times Oatly’s 2020 revenue. Most food stocks trade at two to three times, for comparison.?

What does that mean for the food industry? I’m anticipating quicker listings, bigger deals, higher exits, surprising failures, and, yes, more short sellers.?

(By the way, shorts are confusing. I know. I don’t have an MBA, and you don’t need one either, though cheers to you if you got that degree! Here’s a definition, according to Investopedia : “an investment or trading strategy that speculates on the decline in a stock or other security's price.” It’s as simple as that. But it can also get way more complicated.)?

There’s a lot more to dig up with Oatly and I’ll continue to cover it all in-depth for Forbes and Mind Feeder . Particularly on the sustainability claims side. It never lined up to me that Oatly touted environmental respect, but was still sourcing oats farmed with chemicals that hurt soil health. In the aftermath of the IPO in May, Thrive Market’s chief merchandising officer Jeremiah McElwee talked about it with me and shared his disappointment in Oatly: “Big brands doing IPOs have such an opportunity to create seismic change.”

— Chloe Sorvino

More Oatly Coverage:

Why A Short Seller Thinks $11 Billion Oatly Is More Overvalued Than Beyond Meat. Now that one short seller, Spruce Point Capital, has gone public against Oatly, investors are left wondering if Oatly is on the precipice of a crash .

Wild Oats? Inside Spruce Point’s 124-Page Attack Alleging Mismanagement And False Claims At Oatly. Spruce Point cautions that it believes Oatly has misled investors, including claims of misstating past revenues and other financials, exaggerating claims of success in China, and previously overstating how proprietary its formulas and manufacturing processes are.

Backed By Oprah And Blackstone, Oatly’s $10 Billion IPO Hits The Market. Oat milk sensation Oatly started trading at a $10 billion valuation after an initial public offering that raised $1.4 billion for the Swedish consumer brand.

P.S. I launched a newsletter for Forbes, called Fresh Take, which is all about big ideas changing the future of food. I’d love for you to sign up . It has a paid edition, which also comes with early access to my scoops and other exclusives. There is also a weekly edition which is free and covers my analysis of the latest news and the best from across Forbes’ food section. Mind Feeder will stay Mind Feeder, fear not. It will just incorporate more of what I am loving from across the industry, Internet and otherwise.?I promise to only send it when I have something to say.

Fresh Bites:?

A Funding Frenzy And SPAC Listings Are Fueling The Indoor Growing Industry. But Does It Make Financial Sense? | Revealed: The True Extent of America’s Food Monopolies, And Who Pays The Price. | A Farmer-Owned Local Food App Stands Out From The Venture-Backed Crowd. | Instacart Taps Facebook Executive As CEO , Names Founder Apoorva Mehta To Executive Chairman | Beyond Meat’s Second Attempt At Faux Chicken Tenders Ignites A New Alt Meat War | IPO Lands Krispy Kreme A $3 Billion Valuation | Expect Fungi-Based Steak On Your Plate By 2022: Meati Raises $50 Million | How Rosé Strawberries And Other Specialty Berries Will Help Driscoll's Pull In Millions?

Weekend Reading:

Why Food Blogger Angela Davis Believes Darius Williams Does Not Deserve A Platform. When food blogger Angela Davis first encountered Darius Williams online, she noticed something weird about his recipes. Here's the full story behind #dariuscrooks. (By Forbes.com’s Lizzy Saxe)?

I'm a Frito-Lay Factory Worker. I Work 12-Hour Days, 7 Days a Week. Hundreds of workers at the Frito-Lay plant in Topeka, Kansas are striking for the first time . (From Vice)?

Partake Foods’ HBCU Fellows Program Is A Model For The Food Industry. Founder and CEO Denise Woodard has built New York City based Partake Foods with intentionality. It is majority backed by investors of color, and now the brand is opening up applications to join its second cohort of fellows from Historically Black Colleges and Universities. (By Yours Truly)

What Happens When a Buffett Buys Your Town? Warren Buffett’s son Peter has dropped $160 million—and probably a lot more—to turn a county in upstate New York into his personal farm-to-table utopia , complete with its own radio station, music festival, and currency. (From Tablet)?

Quote I’m Chewing On:

"Who bears these costs is one of the things we tried to make explicit in the report. Even though we didn't put a single dollar number on inequity, we pointed to the fact that across every issue area we looked at, communities of color bear disproportionate costs. Having the hard conversation about who bears the cost and who is in a position to help lessen or minimize or mitigate that cost is an important part"

According to Devon Klatell, Managing Director, Food Initiative, The Rockefeller Foundation. The Rockefeller Foundation recently released a landmark report about the true cost of food, and how America's industrialized production systems shunt $2 trillion in health and environmental costs to consumers. Read more from the report here .?

Recently LIVE:?

Forbes Future of Food Summit: I moderated a panel on the role of the food system in America’s hunger crisis featuring Rise & Root Farm’s Karen Washington, USDA Acting Chief Scientist Chavonda Jacobs-Young, local food systems advocate Qiana Mickie and farmer Phil Haynes, which you can watch here .?

Indoor Ag Tech Summit: I moderated a panel called Scaling at Speed: Delivering the Promises of a Mission-Led Industry with AppHarvest’s David Lee, Gotham Greens’ Viraj Puri, Vertical Harvest’s Nona Yehia, Pure Harvest’s Sky Kurtz, and Brightfarms’ Steve Platt. Coverage here:?

Eventbrite RECONVENE Creator Summit: I led a one-on-one conversation with Food Tank cofounder Dani Nierenberg, which you can now see on YouTube here .?

Forbes IG: Miyoko’s Creamery Founder Miyoko Schinner

Forbes IG: New World Sourdough Author Bryan Ford

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