Quaker Enters Plant-Based Market With Oat Beverage

With oat milks appearing behind coffee bars and inside store coolers at an increasing rate, it was unlikely that one of the country’s largest oat producers would miss out on the action for very long.

Though it conspicuously avoids using the term “milk,” Quaker Oats, a division of PepsiCo, will officially enter the non-dairy plant-based milk space in January with the launch of Oat Beverage, a refrigerated three-SKU line available in 48 oz. multi serve bottles in three varieties: Original, Original Unsweetened and Vanilla. The product is pasteurized and has a shelf life of 70 days. The suggested retail price will be $4.29.

Quaker’s offering gives the brand a natural entry into the plant-based milk market, which has grown 9 percent year-over-year and now accounts for 13 percent of total U.S. milk sales as consumers shift away from traditional dairy products. More specifically, oat milk, thanks to its traction with baristas as a non-dairy option behind the bar at high end coffee shops, has separated from the pack to establish an identity for itself as a standalone product. Swedish oat milk brand Oatly, which entered the U.S. market in 2016 and is available in over 2,000 coffee shops nationwide, has helped set the the tone for the nascent category, while the past year has seen oat milk and coffee paired in some fashion in several new products, including a barista-focused oat milk from Elmhurst 1925 and an nitrogen-infused oat milk latte from Rise Brewing Co.

While acknowledging that the company examined the top uses for plant-based beverages, including coffee, Brian Hannigan, head of innovation for PepsiCo’s North American Nutrition Team, a group which also includes Tropicana, Kevita and Naked, said that Quaker’s Oat Beverage wasn’t developed specifically for coffee consumers and will instead aim to give users a versatile experience.

“What we tried to do was design a product that would deliver against cereal, that would deliver in coffee; it was really more of a well-rounded, versatile product that we tried to create,” he said. “Having that super smooth texture and creamy flavor we thought would pair across multiple uses.”

Quaker’s Oat Beverage, which is produced by Shamrock Farms in Augusta County, Va., is made using an oat bran concentrate that contains .75 grams of beta-glucan, a soluble fiber in each 8 oz. serving. Hannigan said the line’s nutritional benefits will be a primary feature, but that Quaker also looked to the launch with the top three flavors in the category to maximize appeal. He said Quaker will look to build the on-shelf presence for Oat Beverage quickly upon launching in January. “The launch is being built for scale so that the product will be ready at a national level immediately,” he said.

Quaker had previously released the dairy based ready-to-drink line Quaker Breakfast Shake, which has been discontinued.