Shares of Swedish oat milk manufacturer Oatly Group (OTLY -2.63%) were down 16.2% in the month of June, according to data provided by S&P Global Market Intelligence, as the company established a CEO succession plan.
Oatly has been plagued with production issues that have prevented it from capitalizing on growing consumer demand for oat milk that it is largely responsible for creating. Because it has not been able to keep pace with consumer demand, Oatly has slipped from the market leader into second place while other rivals aim to take further share from it.
The oat milk maker appointed former Mars candy executive Jean-Christophe Flatin as global president starting June 1 with the goal of him eventually succeeding CEO Toni Petersson, though a change is reportedly not imminent.
Oatly has been beset by not having enough capacity to keep pace with consumer demand for the product. Introduced into the U.S. just as plant-based alternatives to meat and dairy were taking off, oat milk became a go-to product.
According to Grand View Research, the global market for oat milk is expected to grow at a compound 14% rate annually and hit $6.45 billion by 2028. Amid rampant inflation, though, Oatly's product is finding itself losing market share to lower-priced alternatives that have entered the space to fill the vacuum left by the oat milk maker's inability to keep up.
Its market share dropped 6 percentage points in 2021 from 2019 to 26% as privately held HP Hood caught up to and passed Oatly as the market leader. Greek yogurt maker Chobani also entered the space and is now the third-largest oat milk manufacturer.
The persistent problems have weighed on Oatly's stock, which has lost half its value so far in 2022, but it's down more than 80% over the last 12 months. It only went public on the Nasdaq Stock Market in May 2021 at an offer price of $17 per share and today sells just over $4 per share.
Oatly has expanded with more production facilities and recently announced it was adding a fleet of five electric trucks to expand its sustainable transportation operations.