Oatly invests US$16 million to expand Swedish oat drink production hub

Oatly has announced a US$16 million investment to expand its oat drink production facility in Landskrona, Sweden, increasing output capacity while aiming to further reduce the site’s climate footprint.

The plant, one of the company’s longest-running manufacturing hubs, will see its annual production capacity rise from 150 million liters to 200 million liters following the upgrade.

• Oatly is investing US$16 million to expand its Landskrona production facility in Sweden.

• The project will increase production capacity from 150 million to 200 million liters annually.

• Construction is expected to begin in March 2026 and finish by March 2027.

The expansion forms part of a multi-year investment strategy designed to support rising global demand for plant-based dairy alternatives.

Active since 2006, the Landskrona plant employs more than 300 people and serves as one of Oatly’s core manufacturing and operational centers.

Simon Broadbent, senior vice president of sustainable operations at Oatly, said the site plays a central role in the company’s production network.

“We’re seeing growing demand for our products, so the time is right to upgrade our Landskrona site which has performed fantastically well in recent years, both in stability of output and outstanding cost management,” Broadbent said.

“The Landskrona factory is a key site for us, not only because of our roots in Sweden, but also because it’s a fully owned, end-to-end production hub and home to many of our core functions. You can think of it as one big oat campus.”

The facility operates entirely on renewable electricity and will expand production within its existing physical footprint. According to the company, improvements in ingredient sourcing and distribution efficiency are expected to contribute to a reduction in its overall corporate climate impact in 2026 and 2027.

Oatly reported that European demand for plant-based drinks has rebounded in the past year, increasing by approximately 6%. The company said it had experienced double-digit growth across the region over the same period.

Growth in out-of-home and foodservice channels has been particularly strong, with sales in those segments rising by more than 20%.

The company attributed this momentum in part to new product launches and expanded consumption occasions, including new flavors within its Barista Edition range and the introduction of the Oatly Baristamatic automated coffee solution designed for high-traffic beverage environments.

Many of these innovations have been developed through Oatly’s research and development ecosystem in southern Sweden. The Landskrona production facility sits near the company’s science and innovation center in Lund, forming what Oatly describes as an integrated operational hub.

The planned expansion will also increase demand for locally sourced oats. Oatly said the upgrade would allow it to purchase more raw material from Swedish farmers as production scales up.

Currently, around 70% of the volume produced at the Landskrona plant is exported to international markets. The company expects that share to rise as production increases.

Key export destinations include Germany and the United Kingdom, alongside emerging growth markets such as France and Spain, where the plant-based dairy category has expanded rapidly in recent years.

The investment was first disclosed as part of Oatly’s 2025 full-year financial results, where the company outlined its expected capital expenditure plans for 2026.

Oatly reported profitable growth in both the fourth quarter and the full fiscal year, reflecting efforts over the past several years to restructure its supply chain and reduce operational costs.

Chief Executive Officer Jean-Christophe Flatin said the company had spent the past three years strengthening the foundations of its business.

“Achieving this milestone reflects the disciplined, strategic actions we have taken over the past three years to strengthen the foundation of our entire business,” Flatin said.

“We have right-sized our supply chain and overhead structure while simultaneously reinvesting behind our refreshed growth strategy.”

He added that the company remained confident in the long-term growth potential of plant-based dairy alternatives.

“As we look forward, we see significant potential ahead, and we are confident that we are taking the right steps to drive durable, scalable, and profitable growth as we execute on our mission.”

Construction work at the Landskrona site is scheduled to begin in March 2026 following a preparatory phase. The project is expected to be completed by March 2027, at which point the facility will begin operating at its expanded capacity.