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Oatly Stock Price Jumps in Trading Debut

Shares of Oatly soared 30 percent on Thursday as investors jumped at the chance to take part in rapid changes in the food industry driven by consumer tastes shifting to plant-based products.

The company, which makes an alternative to dairy milk based on oats, priced its initial public offering Wednesday night on the high end of its range, giving the company a value of about $10 billion. Shares were priced at $17 and began trading at $22.12 on the Nasdaq under the ticker “OTLY.”

The offering comes as money is flooding into the food tech space, with investors eager to catch a ride on the next Beyond Meat — the vegan food company valued at about $6.6 billion by public investors. And investors have put a heightened focus on companies like Oatly that say they meet environmental, social and governance standards.

“Long term, it’s an opportunity for us to create a fantastic shareholder base,” Oatly’s chief executive, Toni Petersson, said of the offering. “So E.S.G. was definitely a huge, huge part of it — so we’re excited, we’re really excited, about the outcome here.”

complained about Oatly’s marketing around its use of sugar. But Oatly has no plans to address its sugar content.

“We’re just replicating what nature does before it enters your stomach,” Mr. Petersson said in describing the process of making oatmilk.

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Oatly, a Maker of Oat Milk, Is About to Have Its IPO

Private equity has a place at the table, and so do Oprah and Jay-Z. Food giants like Nestlé are scrambling to get a foot in the door. There are implications for the climate. There are even geopolitical rumblings.

The unlikely focus of this excitement is Oatly, producer of a milk substitute made from oats that can be poured on cereal or foamed for a cappuccino. Oatly, a Swedish company, will sell shares to the public for the first time this week in an offering that could value it at $10 billion and exemplify the changes in consumer preferences that are reshaping the food business.

It’s no longer enough for food to taste good and be healthy. More people want to make sure that their ketchup, cookies or mac and cheese are not helping to melt the polar ice caps. Food production is a leading contributor to climate change, especially when animals are involved. (Cows belch methane, a potent greenhouse gas.) Milk substitutes made from soybeans, cashews, almonds, hazelnuts, hemp, rice and oats have proliferated in response to soaring demand.

“We have a bold vision for a food system that’s better for people and the planet,” Oatly declared in its prospectus for the offering. The company’s shares are expected to start trading in New York on May 20.

Stephen A. Schwarzman, Blackstone’s chief executive, was a steadfast supporter of former President Donald J. Trump, who has maintained that climate change is a hoax.

Blackstone’s backing also helped lend Oatly credibility on Wall Street. And there was no sign that Blackstone’s involvement slowed Oatly sales, which doubled last year.

Oatly’s image benefited from a roster of celebrity investors, including Oprah Winfrey, Natalie Portman, Jay-Z’s Roc Nation company, and Howard Schultz, the former chief executive of Starbucks. All have some connection to the plant-based or healthy living movement.

Oatly declined to comment, citing regulations that restrict public statements ahead of an initial public offering.

Oat milk is part of a larger trend toward food that mimics animal products. So-called food tech companies like Beyond Meat have raised a little more than $18 billion in venture funding, according to PitchBook, which tracks the industry. Plant-based dairy, which in the United States includes brands like Ripple (made from peas) and Moalla (bananas), raised $640 million last year, more than double the amount raised a year earlier.

In the United States, milk substitutes like oat milk and rice milk make up a $2.5 billion industry that is expected to grow to $3.6 billion by 2025, according to Euromonitor. Globally, the $9.5 billion industry is expected to grow to $11 billion.

Once a niche market, alternate milk has become as American as baseball. A frozen version of Oatly that mimics soft-serve ice cream is being sold this season at Yankee Stadium, Wrigley Field in Chicago and Globe Life Field in Arlington, Texas, where the Rangers play.

China Resources, a state-owned conglomerate with vast holdings in cement, power generation, coal mining, beer, retailing and many other industries. The new financing helped Oatly to expand in Europe and begin exporting to the United States and China, where many people cannot tolerate cow’s milk. China Resources’ involvement undoubtedly helped open doors in the Chinese market. Asia, primarily China, accounted for 18 percent of sales in the first quarter of 2021, and is growing at a rate of 450 percent a year, according to Oatly.

In Europe, there is growing alarm about Chinese investment in strategic industries like autos, batteries and robotics. The European Commission has begun erecting regulatory barriers to companies with financial links to the Chinese government. But so far no one has expressed fear that China will dominate the world’s supply of oat milk.

Just in case, Oatly’s prospectus gives it the option of listing in Hong Kong if the foreign ownership becomes a problem in the United States.

The potential of the market for dairy alternatives is not lost on big food producers. Oatly acknowledged in its offering documents that it faces fierce competition, including from “multinational corporations with substantially greater resources and operations than us.”

That would include British consumer goods maker Unilever, which said last year that it aims to generate revenue of one billion euros, or $1.2 billion, by 2027 from plant-based substitutes for meat and dairy, for example Hellmann’s vegan mayonnaise or Ben & Jerry’s dairy-free ice cream. Unilever has not announced plans for a milk substitute.

dairy alternatives are a poor substitute for cow’s milk because they don’t have nearly as much protein.

Stefan Palzer, the chief technology officer at Nestlé, took issue with those who say a big company can’t move as fast as a bunch of Swedish foodies. A young team at Nestlé developed Wunda in nine months, including three months of market testing in Britain, Mr. Palzer said in an interview.

substitutes for almost any kind of animal product. The next frontier: fish. Nestlé has begun selling a tuna substitute called Vuna and is working on scallops.

“It’s a great opportunity to combine health with sustainability,” Mr. Palzer said of plant-based alternatives to milk and meat. “It’s also a great growth opportunity.”

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Australian Company Loses Ugg Trademark Battle

MELBOURNE, Australia — An Australian company’s long-shot bid to scrap a U.S. trademark on the word “Ugg” has suffered another blow after an American appeals court rejected its argument, in a loss that could have far-reaching consequences for Australian makers of the sheepskin boots.

It’s the latest step in a five-year, high-stakes legal battle between the brand’s owner in the United States, Deckers Outdoor Corporation, and a company called Australian Leather. They have been wrangling over ownership of the name of a shoe that has been derided as unfashionable and downright ugly but that has still found its way onto the feet of celebrities like Oprah Winfrey and Tom Brady.

The Australian news media called the lawsuit a “David vs. Goliath” battle, and the case hit a nerve for many Australians, who consider the footwear a national, albeit unfashionable, symbol. The case also illustrated how global access to products on the internet could create clashes between local legal systems.

Australian Leather’s owner, Eddie Oygur, said after the court ruling on Friday that he would take the case to the U.S. Supreme Court.

2020 annual report.

The stakes for both companies were high. Before the verdict, Nicole Murdoch, an intellectual property lawyer at Eaglegate Lawyers in Brisbane, Australia, said a legal success for Mr. Oygur would have a “catastrophic effect for Deckers,” costing the company the trademark on which it had built its brand.

Mr. Oygur said before the verdict, “All the ugg boot makers in Australia will turn to imports because of the prices, and Australia will lose what’s been Australian since the 1930s.”

Personally, he had put everything on the line: the business he had run for nearly 40 years and a house he had mortgaged to pay his legal fees. He said he had spent over a million dollars on the case, lost the majority of his staff and seen the legal challenge scare off many of his customers.

“God help me, I’m not going to back down,” he said. “They gave me no choice. Absolutely no choice.”

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