This was the conclusion of an expert panel that convened at the recent Food and Beverage Innovation Forum (FBIF) in Shenzhen, China which comprised of OATLY President Asia David Zhang, China Centre for Disease Control Institute for Nutrition and Health Director Gangqiang Ding, Beijing Technology and Business University School of Food and health Professor Duoxia Xu, Shaanxi Normal University Professor Xhinzhong Hu, and Institute of Crop Sciences Researcher Guixin Ren.
With oat milk is emerging to become one of the most popular categories of plant-based dairy in China, Zhang stressed that having a strong connection to local society is the main crucial element to ensure continued growth.
“With OATLY, our first phase of growth or Gen 1.0 was all focused on connecting from emotional and sensory perspectives, which included appealing from visual and taste aspects in order to capture interest and attention,” he told the floor.
“But as the sector has progressed and evolved, we are now moving into Gen2.0 of production and growth, and this needs to be beyond the sensory properties in order to retain consumers, which for oat milk and plant-based dairy in general means a shift to focus on the more functional aspects of our products.
“This will require much more in-depth focus on providing balanced nutrition with plant-based dairy items, and in China we also have the option to explore and draw learnings from traditional nutrition and dietary practices to do this, so as to develop the market further locally.”
Before 2022, OATLY’s China operations were previously fully focused on the marketing of imported oat milk products from western markets such as its Swedish headquarters as well as the mimicking of conventional dairy – but the firm has now moved to greatly broaden its portfolio.
“Since the second half of 2022 we have been locally producing our own oat milk and now have the bandwidth to look at more innovations, such as healthier oat-based ice creams,” he said.
“We are also looking at making oat-based yoghurts once the factory is ready, and collaborating with many well-known beverage brands such as Lanfongyuen milk tea and Peets oat coffee – these are all innovations to drive the market to grow further, faster.”
Hu added that although oat milk is one of the most nutritious and healthy plant-based milk options, it is important for local consumers to also remember that it is not a silver bullet beverage option right off the bat.
“Yes, oats are high in fibre and nutrients, but the fact is that the starch content is also very high so it may not be the most suitable option for everyone,” he said.
“So first off there is a need to ensure that there is both better processing and cultivation of these oats so that the resulting product is better for China consumers from a nutritional perspective.
“Secondly, there is a wide variety of grains and beans and other plants available in China, which makes room for many varieties of plant-based beverage products to be created – and this variety and diversity is actually also very important to consider for health.”
This was seconded by Ren, who suggested that beverages made from mixed grains as well as millets are good options to include in local diets.
In China, the potential of oats as well as other plant-based beverages is widespread within the industry, and efforts are in progress to improve the sector as a whole.
“To grow the oats sector for example, we are aware of the wide potential for innovation here, especially if more improvements are put in throughout the supply value chain,” Xu said.
“One of the initiatives China is looking at is to focus on the origin of the oats, from the very beginning of the supply chain, and there will be scope here to improve the nutrition value, the quality and various other characteristics from here.”
From a governmental perspective, Ding added that the plant-based beverage sector ticks all the boxes that today’s Chinese consumers are looking for and needs to ensure innovation across the board to stay relevant.
“To put it simply, Chinese consumers today find three characteristics very important when making their purchasing decisions: Nutrition, Taste and Trendiness,” he said.
“If the plant-based beverage sector is able to continue to fulfil all three of these characteristics, and importantly is able to offer this combination of all three on a stable, steady basis, there is limitless potential for this sector to grow here in China.”