USA – Oatly, a Swedish-headquartered food company that produces dairy alternative products from oats, has struck a deal with California-based Ya Ya Foods as a strategy to move to an “asset-light” model.
Under the deal, Ya Ya Foods will take control of two production facilities of Oatly based in North America specifically, Ogden, Utah and Fort Worth, texas. They expect to close the deal in the first quarter of the year.
Ya Ya Foods will acquire technical equipment as well but Oatly will retain sole ownership and operation of the facilities’ oat-base production lines.
Oatly said in a recent statement that the deal is part of a “shift towards an asset-light supply chain strategy to expand its hybrid production network globally to better support its growth, capacity needs and product and format innovations”.
The company hopes that this hybrid partnership will have a net positive impact on the outlook of its cash flow as well as its future expenditure savings.
This deal follows Oatly’s recent downsizing to save costs after disappointing third-quarter results in 2022. The company expected annual savings of up to US$25M from the reorganisation that will take effect this year.
On the other hand, this partnership with Oatly marks Ya Ya Foods’ first plunge into the US manufacturing market. They will take over the lease of the two facilities and the responsibility to complete the construction of the one in Fort Worth Texas.
As per the terms of the deal, Oatly will receive “an additional credit amount towards future use of shared assets” at its Oden facility and “an additional credit toward ongoing construction” at its Fort Worth site.
Ya Ya Foods expects the transition to enhance and strengthen its growth and capabilities as well as increase its geographic profit and scale allowing the company vast exposure to the United States and Canadian markets.
Meanwhile in Sweden, Oatly is expanding its partnership with Norwegian retail group Reitan to make its oatmilk available in self-serve coffee machines at 300 Pressbyrån and 90 7-Eleven convenience stores across Sweden.
The partnership will be promoted through each company’s app, as well as in-store digital screens and social media.
Oatly and Reitan began their partnership in 2011, with Reitan-operated Pressbyrån and 7-Eleven stores stocking a range of Oatly products for purchase.
The new agreement marks the first time Oatly will be made available in self-serve coffee machines on a large scale, with Reitan’s stores serving approximately 10 million coffees annually.
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