The oats market is in its transformative phase. The market is subject to various growth attributes and opportunities. During the 20th century, the economic position of oats decreased strongly in favor of higher-yielding crops. But presently, oats represent ~1.3% of the total world grain production. Current consumer interest is growing because of recent knowledge of its potential benefits in food, feed, and agriculture. It is transforming from a dietary staple for feed and food into a nutritive whole grain source as a part of a balanced diet.
Oatmeal has chief application and porridge. While the sales of instant oatmeal have been on a downward trajectory, the loss is balanced out by the trending growth in the revenue of healthy, convenient, and slow-cooking oatmeal. The oats market is expected to show impressive growth in the coming decade. The future for the oats market looks bright as many key players are expected to broaden their product portfolios by introducing innovative oatmeal flavors.
Demand for oats outpaced production in 2021 after major North American oat-growing regions suffered a severe drought, which led to depleted supplies that couldn’t keep up with usage. Commercial milling oat use relative to total oat supply had been steadily climbing, going from 6% in 1994-95 to 27% in 2020-21, and is still increasing, Mr. Randy Strychar, president of Oatinformation, said.
Oat fibers are among the most filling and healthiest breakfasts. This is owing to the high soluble fiber content present in oat fiber. Oat fibers provide increased satiety due to the presence of high amounts of beta-glucan. The oats market accounts for ~8% of the overall cereal market. With countless options and even more health benefits let’s take a closer look at the evolution of oats.
Backing Figures for the Upturn in Oat-based Breakfast
The incorporation of oats in the food industry is mainly due to the increasing market penetration of breakfast cereal products. According to Euromonitor International, the breakfast cereals market in India, which was worth Rs 2,246 crore in 2017, touched Rs 3,495 crore in 2021. Moreover, according to the data calculated based on the U.S. Census data and Simmons National Consumer Survey (NHCS) statistic, 283.39 million Americans consumed breakfast cereals (cold) in 2020. This figure is expected to rise to 290.32 million in 2024.
The changing lifestyle of consumers includes the decision to opt for light and healthy meals. This drives the demand for oats, due to their high nutritive content. Consumers believe in the notion that the journey towards wellness can come with something as simple as including oats in one’s diet. This can be attributed to the fact that oats are a nutritional powerhouse that offers a simple and valuable means to boost one’s health.
Oat protein typically contains 80 to 90% protein by weight and is considered a valuable source of plant-based protein. These particularly include protein bars, shakes, powders, and baked goods, to boost the protein content in a diet. Within the natural food industry, Bob’s Red Mill Protein Oats exemplifies a breakthrough by offering a protein-rich alternative to traditional oat cereals.
Oat milk also has become a favorable plant-based dairy alternative due to its taste and sustainability. Planet Oat emerged as the leading brand of oat-based milk alternatives in the United States. In 2023, Planet Oat generated sales of around 10.52 million U.S. dollars. Highlighting the sustainability aspect of oats in marketing strategies can attract environmentally conscious consumers.
Justifying the Spike in Organic Oats: The Vegan Oats Odyssey
About 3% of Americans have opted for veganism, according to recent studies, and the figure is on the rise. Organic oats constitute a widely accepted breakfast option on account of their health benefits in many parts of the world. Oats are fulfilling their commitment to customers looking for healthy vegan choices.
Organic oatmeal is considered to be a high-protein diet containing soluble fiber. This opens an opportunity for the oat market’s major players to meet rising consumer demand. The rise of protein-enriched food products like Bob’s Red Mill Protein Oats responds to consumer demand for healthier, high-protein options. U.S. retail sales for plant-based foods stood at USD 8 billion in 2022, and are expected to grow further. The rising demand for plant-based nutrient-dense breakfast options contributes to the growth of the oats market.
As per Good Food Institute, plant-based butter sales took upward traction in the United States from 2017 to 2019 by 15%. With its popularity and easy availability in grocery stores, health food stores, or online platforms oat butter is expected to remain a key niche in the overall oats market growth.
Food Industry Rises in Gluten-free Trends, Oats Market Shows Potential
The gluten-free oats market has grown exponentially in recent years with a study rise in demand for gluten-free products. As per the American Customer Satisfaction Index, which reflects the total quality of American goods & services, purchases of gluten-free, protein-rich breakfast cereal increased by 10% in the United States in 2017. The increasing product diversity and availability have made it easier for consumers to access these products regularly at stores and supermarkets.
The rising incidences of celiac diseases are expected to bolster gluten-free oats sales, particularly among women. Leading oat manufacturers such as The Quaker Oats Company, Bob’s Red Mill Natural Foods, and General Mills, Inc., are focusing on developing a wide range of gluten-free products.
Consumers who desire to lose weight are opting for gluten-free oats. 6% (approximately) of the U.S. population is gluten intolerant. Rising cases of gluten allergies are expected to boost gluten-free oats sales globally. This accelerates the market demand for oats in general. 23% of U.S. consumers shop for gluten-free products.
Ramping Economies’ Inclination Toward Oats
Shift towards Western Organic Oat Goods in the United States
The United States oats market is anticipated to increase rapidly over the forecast period. The oats market in North America is foreseen to be a USD 1800 million industry by 2028. Oats are primarily found in hot practice serials along with cold cereals in the region. Baby food and granola bars made of oatmeal are also consumed as a major breakfast staple with fruits.
The United States is one of the key markets for gluten-free oats. To reduce the risk of gluten commingling from fields nearby, or shared equipment, the Teff Co. operates from a teff-only facility. In comparison to the US Food and Drug Administration’s gluten-free requirements of 20 ppm, it tests all lots down to levels of 5 ppm of gluten, it tests all lots down to levels of 5 ppm of gluten. One cup of Teff measures down to contain 123 mg of calcium and resistant starch. Such disruptive initiatives significantly help in the oats market expansion in the region.
Key market players in the region such as Advanta Seeds, KWS, and Johnny’s Selected Seeds are focusing on product diversification. Innovation in oat-based products has expanded beyond traditional oatmeal. Manufacturers are launching oat milk, oat flour, oat seed, oat fiber, and other alternative products.
Changing Breakfast Routines in India and China
The Asia Pacific region is anticipated to advance at a CAGR of 5% through 2030. Busy urban lifestyles have changed the market scenario. The increase and demand for quick, healthy, and convenient breakfast options is on the rise. Oats serve as a versatile and nutritious breakfast choice. This leads to a surge in demand for oats in these regions. Consumers in emerging economies such as India and China are adapting to the changing breakfast routine.
A growing number of people are turning to Western organic oat foods like oatmeal, oat noodles, oat cookies, oat drinks, and other organic oat-based food products that are widely available. The oat producers in the oat market are transferring the focus to emerging economies to boost sales in these regions and expand their regional footprint. Many companies are spending on modern technology and state-of-the-art machinery. The governments of these economies offer supportive incentives and tax breaks to propel the oats market expansion.
‘Mariconscious’ At Marico
Marico’s whole business in India approach is based on understanding consumer consciousness. In India, Marico’s entire business operation is based on the understanding of consumer consciousness. Saffola is one such brand that gained traction and was built by the understanding of consumer needs. On one end, Saffola competed with Kellogg’s, and on the other, it had to compete with PepsiCo’s 145-year-old brand Quaker Oats. Marico extended the Saffola brand from heart-friendly cooking oils to Oats in 2010.
Commercial Competition in the Oats Market
The rapid surge in competition is likely to boost revenue in the oats market. It is expected to advance from a value of US$ 7,764.49 million in 2021, to reach a value of US$ 9,939.82 million by 2028-end. The oats market is set to bank a CAGR of 3.6% through 2028 amidst the competitive dynamics.
The rapid growth of grocery delivery and alternative proteins has led to an overrepresentation of delivery and food science startups. The startups focus on game-changing trends to expand their channel of distribution. They are focused on expanding that product portfolio to provide better foods for a better future. They are raising funds to support retail distribution, team building, and product development.
The well-established oats market players are focused on innovation, research, and development. During FY 2022, 73% of inputs were sourced sustainably in Nestle. To obtain high-quality oats and oat-based products, they are indulged in expansions. Producers of oats are working hard and investing heavily to improve their operation and innovational capabilities.
References:
Trend Hunter: High Protein Oat Cereals
Supermarket Perimeter: Gluten-free Baking Trends
Storyboard 18: How Marico’s Saffola Won the Battle for Oats Market in India
Future Life Food: The Evolution of Oats
