Its first brand All Oats was launched this year consisting of long shelf-life oat milk and flavoured oat milk selling D2C. It also has a B2B channel, producing oat milk for independent coffee chains and coffee schools.
Among the latest product launches are a fresh oat milk series, which requires cold-chain, and a functional oat milk to help with digestion.
According to Shirley Shen, founder of All Plants, the company aims to cater to the young Chinese population with plant-based products. Its consumers are those born in the 1990s and 2000s in China, accounting for 300 million people.
Although, plant-based food and beverages are not new in China with products such as soy and rice milk readily available, Shen said these traditional flavours no longer attracted younger consumers.
So when Oatly entered China’s coffee chains in 2018, it increased the awareness and acceptance of oat milk among Chinese consumers.
This has led to growing competition in the oat milk space in China. Despite this, Shen said most of these imported companies produce products designed for Western consumers.
Fresh and functional
So, she created a fresh oat milk product because Chinese consumers were already familiar with drinking fresh soy milk, and it was something that overseas brands did not offer.
Because of the short shelf-life, the firm will sell this SKU into ‘new retail’ channels such as Alibaba’s Hema. There are plans to enter similar outlets such as Dingdong Maicai, as well as convenience stores next year.
Another new product launched is an oat milk drink containing oat white kidney bean fibre to help break down carbohydrate and oil in the body, improving digestion.
It was specially developed to be paired with the typical Chinese cuisine such as hotpots or barbeque, which can be oily and spicy.
The company aims to sell this 330mL drink into restaurants in China, and is currently looking for distributors in the catering industry.
Supply chain
It sources oats from Australia and, for its production, has a strategic partnership with New Hope Group, a conglomerate in China with more than 600 subsidiaries in agriculture, dairy, poultry, animal feed industries and more.
It provides in R&D, logistics and production support on a project basis.
For instance, the recently launched fresh oat milk is manufactured in New Hope’s Hangzhou site, and distributed in East China.
When it launches in Beijing, production will be at New Hope’s Shandong or Hebei sites, in the North of China.
This is important since the fresh milk has a short shelf life and cannot be distributed online nor across the country from one site.
For its long shelf life products, these retail on WeChat, JD, Tmall, Taobao, Kuaishou, Hema and several offline supermarkets.
Shen said there are plans to diversify these channels into the bakery and tea house space in the future.
The next two years will focus on building the brand in China, with no intention to export.
She hopes to develop products with more flavours, functions and formats: “Maybe we will have the opportunity to co-brand with other brands to make something different, and to develop new products in ice cream, yoghurt and snacks etc,” she said.
