Cream of the crop? Alberta farmers see growth opportunity in oat milk

Retail sales of oat milk is soaring in the U.S., surpassing almond milk as the fastest-growing non-dairy alternative to milk

Jessica McCarrel, owner of Kaffeeklatsch coffee shop at Cambrian Wellness Centre, poses for a photo with an oat milk latte. Azin Ghaffari/Postmedia

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Jessica McCarrel clearly remembers the first time she made a latte with oat milk, the new non-dairy milk alternative currently taking North America by storm.

“I got really excited,” says McCarrel, owner of Kaffeeklatsch, a mobile coffee catering company in Calgary. “It didn’t curdle with the acidity of the coffee like some of the other milk alternatives. I could get a really nice foam with it, I could get latte art with it and all of that . . . it was pretty fabulous to work with.”

Since then, McCarrel — who also operates a coffee kiosk in an Alberta Health Services building on Veterans Place N.W. — has been pleasantly surprised by how quickly her customers are going through her supply of the creamy, plant-based liquid.

“There’s always been a demand for milk alternatives, but many of them, frankly, don’t taste good with coffee,” she says. “The oat milk taste works better with the coffee.”

At his farm in Beaver County, an hour’s drive southeast of Edmonton, Brad Boettger has also been pleasantly surprised by the latest trend in plant-based eating. Boettger is an oat farmer, and has long been proud of the crop’s reputation as a heart-healthy cereal. But he didn’t foresee that oats — of which Canada is the world’s largest exporter, boasting 75 per cent of the global market — would become the darling of independent coffee shops and hipster grocery stores almost overnight.

According to Bloomberg Business, retail sales of oat milk in the U.S. soared from $4.4 million in 2017 to $29 million in 2019, surpassing almond milk as the fastest-growing non-dairy alternative to milk. Swedish company Oatly, which is behind the best-known brand of oat milk and sources many of its oats from the Canadian Prairies, has seen skyrocketing demand and triple-digit sales growth annually since entering the U.S. market in 2016.

Recently, Starbucks announced it would add an oat milk beverage to its menu in 1,300 locations in the U.S. Midwest — part of a new sustainability program through which Starbucks aims to push consumers toward plant-based alternatives in an effort to reduce carbon emissions.

“It’s a fun thing to see,” Boettger says. “Anything that puts oats on the map and gets people talking about it is always a good thing for the industry.”

While oat milk is growing in popularity, it still makes up just a fraction of the alternative milk market, which is overwhelmingly dominated by products made with soy and almonds. Canada produced about 4.2 million metric tonnes of oats in 2019, according to Statistics Canada, with most of that production occurring in the three Prairie provinces. For Prairie oat growers to actually feel the effect of the oat milk craze, North American consumer demand for the product would have to grow massively.

An oat harvest underway near Acme, Alta. Postmedia Archives

“From what I understand, from one cup of oats they can make four cups of oat milk,” Boettger said. “So when you think about that, and think about how we’ve got grain trailers of oats and bins of oats, that’s a lot of creamers that have to be used in Starbucks.”

Still, no one can deny that oats are having a moment. Vegan cafes and restaurants across the continent are even serving up oat milk ice cream — in fact, researchers at the University of Alberta and NAIT have developed their own version of the cereal-based frozen treat. If these types of value-added products take off among consumers, it could be good news for Alberta farmers. This province may not be able to grow almonds or other popular dairy substitutes such as rice or coconuts, but oats give Prairie farmers a chance to capitalize on the plant-based juggernaut.

Calgarian Kelsey Linsig, who follows a vegan diet, recently switched from almond milk to oat milk, partly for environmental reasons. A 2018 study from the University of Oxford suggested a glass of cow’s milk produces almost three times the greenhouse gas emissions of any plant-based milk alternative. However, even among its competitors, oats come out an environmental winner. A carton of almond milk, for example, requires eight to nine times as much water to produce as oat milk.

For Linsig, the fact that oats are grown right here in Alberta is also a selling point, she said.

“There’s a huge thing right now with eating locally and buying locally,” Linsig said. “I think that’s definitely something that would play into people’s minds when they’re choosing what they’re buying.”

Sylvain Charlebois, senior director of the agri-food analytics lab at Dalhousie University, said the oat milk trend is a “great opportunity” for Canadian farmers.

“Oat milk checks many boxes, from sustainability and animal welfare to domestic production,” said Charlebois, who has written extensively about his belief that the alternative milk trend spells trouble for Canada’s dairy sector. “It’s really a nice product with a lot of potential and, guess what, it actually tastes good.”

Charlebois said just as companies are investing in lentil and pulse processing on the Prairies to capitalize on the plant-based market, so too should Canada be working to build a value chain to support its oat ambitions.

“It’s happening 10 to 15 years too late with pulses, but at least it’s happening,” he said. “The same has to happen for oats, but we are going to need capital, knowledge and, most importantly, leadership.”

Jessica McCarrel says oat milk blends well with coffee and tastes better than other milk substitutes. Azin Ghaffari/Postmedia

The Prairie Oat Growers Association (POGA) — a voluntary organization that aims to promote the interests of oat farmers and oat marketing in Alberta, Sakatchewan and Manitoba — is pleased by the growing interest in oat milk and views Starbucks’ move to incorporate it into its menus as something that will likely introduce the product to even more consumers.

However, POGA executive director Shawna Mathieson said many Canadian oat farmers also raise cattle or sell oats for feed to dairy producers — therefore the organization is not about to promote the view that consuming animal-based products is somehow harmful or bad. (While Canada’s dairy industry is concentrated in Ontario and Quebec, there are more than 500 dairy farms in Alberta. The Dairy Farmers of Canada says the industry is committed to sustainable practices and is responsible for just one per cent of Canada’s total greenhouse gas emissions).

“Our position on the oat grower board is not that it’s more environmentally friendly to drink oat milk versus dairy milk,” Mathieson said. “We’ve not done that study, and we’ve not looked at it. We would encourage people to drink the milk that’s best for them, and hopefully oat milk fits in for some people.”