The ground is barely broken on a new production facility for SunOpta's line of plant-based milks in Texas, and already the company is talking about expanding further to meet consumers' growing thirst for oat milk.
"It is highly likely we will soon begin construction on another oat extraction facility in the very near future," Joe Ennen, SunOpta's chief executive, told investors Wednesday morning. "Oat revenue tripled versus the prior year."
The Edina-based company is working to double its plant-based sales over the next several years after selling its organic commodities business in late 2020 and making a major pivot into non-dairy milks.
SunOpta makes and packages plant- and nut-based milks for some of the nation's best-known retail brands. Starbucks is also one of its largest customers.
Ennen said the extra oat milk production space would be in addition to the recently announced 400,000-square-foot "mega" facility under construction in Midlothian, Texas, outside of Dallas. The new capacity would likely be tacked on there or at its Modesto, Calif. plant.
SunOpta also has plant-based milk facilities in Alexandria, Minn. and Allentown, Pa. The company will also be moving into a new $20-million headquarters and R&D center in Eden Prairie by the end of the year.
Despite 16% growth in its plant-based business, SunOpta reported a $3.8 million loss for its third quarter on $198.5 million in revenue, missing Wall Street estimates. Company leaders pointed to the decline in its fruit-based business plus labor and raw-material shortages disrupting supply chains worldwide.
"As we try to throttle from fourth gear to fifth gear, it's a little bumpy," Ennen said in an interview. "You love it when you can say it's this or that, but it's just a ton of tiny little things."
Whether it's apple puree from Chile stuck on a ship at a congested port or a lack of forklift drivers at customer warehouses creating shipment delays, Ennen said the recent challenges are "transitory" — meaning temporary. SunOpta's rapid growth beyond its own forecasts is also causing some short-term headaches.
"It's a short-term blip, nothing structurally has changed about the company," Ennen said.
The company's stock price reached an all-time high of $17.07 in February and has been slowly slipping since then, closing at $7.74 on Tuesday. Shares dropped another 13% on Wednesday to end trading at $6.73.
