12th October 2021 By Bridget O'Connell | email@example.com | @foodtickernz
The boss of what is set to be New Zealand’s first oat milk factory has got things to do, and the clock is ticking.
Invercargill native and former chief executive of fruit processor Barker’s of Geraldine, Justin Riley, is leading the Great South-initiated project to have a proposed $50m carbon neutral oat factory in Southland up and running by the end of next year – including a 40-week build.
“Timeframes are tight, but we’ve got to get into the race. New Zealand has got to get into the race – and it is a race,” Riley told the Ticker.
The Makarewa-based plant would be New Zealand’s first purpose-built oat milk processing facility, which means that a growing number of domestic oat milk companies such as Otis, Sunny South and All Good, who all go off-shore to countries like Sweden or the UK for production, would have the option to move production home.
“New Zealand is being a bit left behind in the whole plant beverage area,” Riley said.
“There are so many innovative brands wanting to get on and do things and being frustrated, so that is what is driving and motivating us.”
This means lining up both prospective customers and investors to back the project, which has been seeded with $1m of capital from Warehouse founder Sir Stephen Tindall’s investment firm K1W1.
Riley says interest was strong from both sides and is confident that the project, being developed under the New Zealand Functional Foods moniker, would have contracts signed this quarter.
“The industry desperately wants us and is very keen for us to succeed. They are very supportive but they also have to be sensible,” Riley says.
“Customers have to know we can make their product. They’ve put a lot of time and energy into developing formulations that are specific to their brand so there is a bit of time taken around product matching and making sure they are feeling comfortable. As well as the commercials.”
On the investor side, they need to know the factory has customers before stumping up cash. There also needed to be a cultural fit with the business, which has sustainability at its core and plans to be carbon neutral by 2025. The ambition is for the factory to be a five Green Star-rated building.
While the build would primarily be an oat milk factory “because you’ve got to specialise in something,” Riley said it would also be able to support other plant-based milks or blend innovation, which are seeing rapid growth both internationally and domestically.
In New Zealand, the supermarket plant-milk category grew by 12% in the year to August 2021, while oat milk sales grew 230%, Riley said. This saw oat milk’s market share move from around 5% to now account for close to 20% of plant milk sales in supermarkets.
“There are two key features to this factory – we will have a high speed, highly competitive, international best practice line that runs at 12,000 litres an hour – you’ve got to have something like that because you have to be internationally competitive in order to get the right price to attract brands home.
“The other thing – and this is just as important – is that we need to have an innovation line that runs at around 2,000 litres an hour. That allows us to nurture and grow an industry and develop new brands and allow innovation to take place and that is equally as important because this is a revolution.”
Being integrated into the wider food industry in New Zealand would be an important part of being able to support innovation and make the project stack up commercially, Riley said.
“Our approach to this is to dovetail in with the New Zealand Food Innovation Network – we are meeting with [FoodSouth chief executive] John Morgan to have an ideation session which will be us sitting down with the team to say ‘what are you guys seeing at the front end?’ so that we make sure we are designing the back end to work.
“We’ve got to get the linkages into the food industry to really make this work as a business.”
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