Plans to build an oat milk factory able to produce up to 25 million litres a year - much of it destined for export - could be the beginning of an industry worth millions to New Zealand.
The move is being applauded by global packaging giant Tetra Pak's Oceania managing director Andrew Pooch, who says a Kiwi oat milk industry has the potential to add a valuable string to the country's bow as the economic fall-out from Covid hits industries like tourism.
His comments come as Otis, a small New Zealand oat milk producer, has announced plans to build the country's first large-scale oat milk factory in Dunedin with the aim of significantly expanding the amount of milk it produces.
Pooch says the industry is a massively untapped business opportunity and believes if oat milk production grew to even a small percentage of the 21 billion litres of dairy milk produced in New Zealand each year, the result could create a multi-million dollar industry and a huge boost to the economy.
He also believes the move is an opportunity to take advantage of a trend in which the consumption of oat milk is exploding in the plant-based food and beverage market. According to Mintel, a global new products database, oat milk now makes up 16 per cent of the world-wide consumption of dairy beverage options, a figure that has doubled since 2016.
Pooch, who says Tetra Pak is keen to be an "added value partner" as processing and packaging supplier to potential producers, welcomes both the Otis move and that by Southland's economic development agency earlier this year to form New Zealand Functional Foods (NZFF) to commercialise production and make oat milk in New Zealand.
"What we have in New Zealand is a unique situation where local farmers send their oats overseas to be processed, turned into oat milk and then sent back to New Zealand supermarkets," he says.
"The capabilities and skills have always existed in New Zealand to produce world class oat milk from locally grown oats," he says. "But what has been lacking until the Otis and NZFF developments is the appropriate infrastructure, processing facilities and willingness in the market to diversify.
"It has always needed this because oat milk production has the potential to be a thriving industry within New Zealand – one that could fuel both the domestic and export economies."
Kiwi farmers produce about 33,000 tonnes of oats a year (according to FigureNZ data) and Pooch says its climate, soils and regular rainfall - particularly in Southland where just under 9000 tonnes are grown - gives the country a natural advantage.
"While dairy will always remain a cornerstone of the New Zealand economy, consumers young and old are looking for alternatives and oats are one of the latest of many nutritious plant-based materials that have emerged including coconuts, soybeans, almonds, buckwheat, peas and hemp," says Pooch.
"We want to raise awareness and tap into the growing consumer trend around making choices that are good for the environment and sustainability – and show the economic opportunities being missed by businesses in New Zealand."
"Our research shows there is a high potential for oat-based alternatives in western Europe and North America," he says. "These drinks are consumed as a morning supplement and young people drink them as snacks. In many cases they command premium prices, two to five times that of ordinary milk."
Pooch says oat milk is being produced in New Zealand on a boutique scale but people are still worried about "writing out the big cheques" and hopes the Otis announcement will give them confidence and lead to more investors.
"Another big international company which has beverage manufacturing in New Zealand is also looking," he says. "So we are close, but we need to be manufacturing here, not importing."
Pooch says as well as packaging Tetra Pak also provides processing equipment and solutions - Kiwi dairy companies are huge users of this - and it could use the knowledge gained to build a plant not unlike a dairy factory," he says.
"We are talking to a number of other interested parties and ultimately an operation may be set up as an oat growers co-operative or be established as a stand-alone company."
Pooch says oats are a healthy grain crop, has relatively high protein content, is high in soluble fibres, is naturally free of gluten and is high in polyunsaturated fatty acid.
It also has sustainability properties. According to a study conducted by Joseph Poore, a researcher at the University of Oxford in the UK, and Thomas Nemecek, deputy leader of the Life Cycle Assessment Group at Zhaw, a university of applied sciences in Switzerland, oat milk uses 0.2kg of emissions, 0.2sqm of land and 10 litres of water to produce one 200ml glass.