Forbidden Foods acquires Steve Smith’s Oat Milk Goodness for A$3.4M, enhancing its distribution and expanding OMG’s oat milk into international markets, starting with India. The deal leverages Forbidden Foods’ infrastructure and OMG’s brand, aiming to accelerate product development and capitalize on the growing demand for plant-based milk.
Australian plant-based milk startup Oat Milk Goodness (OMG), co-founded by cricket star Steve Smith, is set to be acquired by Forbidden Foods in a notable A$3.4 million ($2.25 million) deal. Expected to finalize by the end of September, this acquisition will facilitate OMG’s international expansion, starting with the Indian market. Founded in 2019, OMG is celebrated for its high-quality oat milks, leveraging Australia’s strong oat production. The brand’s product lineup includes original and barista-friendly oat milk, along with flavored varieties such as chocolate and PrOATein, which contains added protein. These products are currently available at major Australian retailers like Woolworths and Ampol Foodary.
Forbidden Foods, known for its Blue Dinosaur vegan snacks, seeks to bolster its portfolio through this acquisition. The deal aligns with Forbidden Foods’ strategy to expand within the health-focused FMCG sector. The acquisition will not only enhance Forbidden Foods’ product range but also leverage OMG’s brand and distribution network to capture growing demand for plant-based products in new markets..
Strategic Implications
The deal allows Forbidden Foods to utilize its extensive distribution network and retailer relationships to increase OMG’s market presence. Forbidden Foods’ CEO, Alex Aleksic, highlighted the benefits of this acquisition, noting the potential for improved product development, marketing, and operational efficiencies.
“This acquisition represents a unique opportunity to merge our strengths and create a multi-channel, health-focused product business,”
Alex Aleksic- Forbidden Foods’ CEO
Forbidden Foods plans to leverage OMG’s brand recognition and ambassador network to boost its own Blue Dinosaur brand while accelerating OMG’s international growth, particularly in the Indian market.
Market Dynamics
In Australia, plant-based milks like oat, soy, and almond are gaining popularity, especially in coffee shops. Despite plant-based milk comprising only 7.5% of overall milk sales in Australia, it accounts for a quarter of milk-based drink sales in coffee shops. This growth is driven by health-conscious consumers, a trend that OMG’s clean-label oat milks are poised to capitalize on.
OMG’s expansion into India reflects a strategic move to tap into a growing market for milk analogues, where health and sustainability are increasingly important to consumers.
Financial and Market Impact
OMG currently generates annualized revenues of A$1.2 million (about $800,000) and anticipates growth following the acquisition. Forbidden Foods, despite reporting a net loss before tax of A$1.1 million ($730,000) in the first half of 2024, has shown improved earnings performance and raised additional funds to support its expansion plans.
The acquisition underscores Forbidden Foods’ commitment to becoming a key player in the health-oriented FMCG sector, capitalizing on the rising demand for plant-based products both domestically and internationally.
