OMG: Australia’s Forbidden Foods to Acquire Cricketer Steve Smith’s Alt-Dairy Brand

Oat Milk Goodness, the Australian plant-based milk startup co-founded by cricketer Steve Smith, is to be acquired by Forbidden Foods. It now eyes an Indian expansion.

Australian cricket may be on a break, but one of its greatest batters is still keeping as busy as he’s on the pitch.

Steve Smith’s plant-based milk brand Oat Milk Goodness (OMG), which he co-founded with Tony Adams and Daniel Rootes in 2019, is set to be purchased by fellow Australian company Forbidden Foods in an A$3.4M ($2.25M) deal.

The parent company of vegan snack startup Blue Dinosaur, Forbidden Foods will leverage its domestic distribution footprint and relationships with major retailers to boost the presence of OMG’s oat milks. It will also tap into the profile of OMG’s ambassadors to raise awareness about the Blue Dinosaur brand.

OMG itself is looking to expand internationally, starting with India, a country where former Australia captain Smith harbours a giant fanbase, and one where milk analogues dominate the smart protein sector on the back of growing health consciousness.

“While there are a number of synergies between the businesses, OMG has the potential to benefit from the agreement through access to capital markets and international expansion opportunities,” Smith said, calling the deal a “springboard for OMG’s future growth”.

Forbidden Foods sets sights on better-for-you segment

OMG was established to take advantage of Australia’s native oat supply – it is the third-largest producer of the grain globally. The brand is known for its clean-label, seed-oil-free oat milks that have gained traction in the country’s renowned specialty coffee industry.

The lineup consists of the original, barista-friendly oat milk, a chocolate flavour, as well a chocolate PrOATein version with faba bean and pea protein. The products are available at Woolworths and Ampol Foodary locations, health stores, and online.

For Forbidden Foods, the acquisition represents “considerable upside from an operational and corporate standpoint”. The company’s existing infrastructure and capacity can help manage OMG’s accounts, sales and distribution, and both businesses will be able to leverage their expertise to accelerate product development.

“Both parties have also identified numerous synergy opportunities in sales and marketing and the streamlining of overheads and internal administration costs, which will drive growth and cost efficiencies,” said Forbidden Foods CEO Alex Aleksic.

The deal marks the first step in his company’s goal of becoming a capital-light “brand manager in the ‘better for you’ segment of the FMCG sector to further capitalise on the consumer shift towards healthy choices”.

“The company is currently assessing a number of other value accretive opportunities and will provide further updates over the coming months,” Aleksic added.

OMG taps Australia’s evolving oat milk market

Following the acquisition, which is expected to be completed by the end of September, OMG’s near-term priorities include fast-tracking product launches (primarily in the PrOATein range), overseas expansion, and building out its sales team and targeted marketing campaigns.

“The proposed transaction represents a unique opportunity to leverage the respective strengths of both companies and create an integrated multi-channel, health-focused products business serving domestic and international markets,” said Aleksic.

“Strategically, the Forbidden Foods board and management team holds the view that OMG’s product suite specifically complements Forbidden Foods’ core range of Blue Dinosaur healthy snack foods, by adding a leading health-drink range in a fast-growing market.”

According to the filing on the Australian Securities Exchange (ASX), OMG is generating annualised revenues of A$1.2M (about $800,000), and anticipates near-term revenue growth after the transaction is completed.

Meanwhile, Forbidden Foods posted a net loss before tax of A$1.1M ($730,000) in the first half of 2024, a 104% improvement on the same period last year, and its best earnings performance since being listed on the ASX in September 2020.

The company has simultaneously raised A$600,000 from investors alongside the acquisition agreement, and has previously indicated interest in expanding the Blue Dinosaur range across Asia-Pacific, as well as the Middle East and the US.

While plant-based milk only makes up 7.5% of overall milk sales in Australia, oat, soy and almond milk account for a quarter of milk-based drink sales in the country’s coffee shops. A spokesperson for The Alternative Dairy Co. – another milk analogue maker from down under – told Green Queen earlier this year that while almond milk is the most popular, oat is catching up and represents the future of the segment.

Research by industry giant Vitasoy also suggests that these products have made it into 40% of Aussie households, and have the potential to hit another 30%. And the main reason for buying plant-based milk in Australia is health, according to a survey where nearly half (49%) of respondents said these products are better for their health – so OMG’s clean-label oat milk would appeal to these consumers.

Other oat milk players in Australia include Milklab, Minor Figures, Australia’s Own, Chobani and Oatly. And just this week, the latter – the world’s largest oat milk company – relaunched in the New Zealand market too.