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Cricketing legend Steve Smith was drinking a latte in a New York cafe run by Aussie mates when the idea for his new start-up was conceived.
“I dabbled in alternative milks over the years, soy milk, almond milk. There wasn’t anything that suited my palate,” Smith told The Sydney Morning Herald and The Age. “When I tried oat milk, I was kind of hooked straight away.”
Cricketer and entrepreneur Steve Smith and his start-up Oat Milk Goodness (OMG).
He enjoyed it so much he tried to order more oat milk coffees when he returned to Australia, but in 2018 that particular type of alternative milk was yet to explode into the national coffee culture.
Over drinks on a night out, Smith discussed his new discovery with friend and now business co-owner, Tony Adams, a former financial market expert and co-founder of bone broth and wholefoods company Undivided Food Co.
“We were just talking about business and trends, and I was like, I’d love to bring oat milk out here, to Australia. It’s started well in America, and you often see trends that start over there come to Australia,” Smith said. “Tony was like, ‘I reckon I could do that’.”
Cricketer Steve Smith’s new start-up Oat Milk Goodness was made for coffee.
“That was the start of the business. My friends are now doing 80 per cent of their coffees on oat milk in New York.”
On top of his reputation as one of the world’s greatest batsmen, Smith’s knack for spotting a good investment (he invested $100,000 in mattress maker Koala early on, the same amount in online photography marketplace Snappr, and $200,000 in cashback outfit Cashreward) has earned him a reputation as a canny investor.
But start-up Oat Milk Goodness, which is already in 300 cafes across the country, puts him squarely in the driver’s seat for the first time: Smith himself has overseen the product’s flavour profile and formulation.
“In terms of investing, obviously I’ve had quite an interest in it over a long period of time. This one’s very different as it’s my baby essentially, along with the other two [co-founders],” said Smith in a nod to Adams and Daniel Rootes, who is an investment advisor and heads Oat Milk Goodness’ sales in Western Australia.
“It’s really exciting to start something like this.”
The trio has already had a bumpy start: launching the product in late 2021, some four years after the idea’s initial conception, Smith and his co-founders are facing stiff competition in the crowded barista-preferred alternative milk scene, primarily from Sanitarium’s Alternative Dairy Co and Milklab.
“It’s become quite a saturated market,” said Smith, adding that the process was “much more difficult” than they thought.
“We wanted to perfect our recipe and get everything right, and it just took a lot longer than we thought … We’re really proud of the product we’ve got now.”
Nonetheless, the market opportunity is there: Australian revenue from milk substitutes rose by nearly $30 million in 2021 to $327 million, a figure that is expected to hit $550 million by 2026.
Oat Milk Goodness (OMG) cartons.
On top of their use of Australian-grown oats, the trio are eager to differentiate Oat Milk Goodness through their deliberate choice of olive oil in the production process instead of industrial seed oils like sunflower or canola oil.
“Baristas, when they’re making coffees, want to make sure it stretches well, that it doesn’t separate,” said Adams. “Oat milk’s a bit different. It does seem to have a lot more similarities in the way it reacts to coffee compared to cow’s milk … [and] in terms of creaminess and mouthfeel.”
The same drive that made Smith a world-class sportsman is propelling him as a fledgling entrepreneur. In a busy alternative milks market, Oat Milk Goodness is the underdog: the business is still in negotiations with the major supermarkets for coveted shelf space to get directly in front of consumers and gain brand recognition, but the team already have global ambitions to eventually expand into America and India (they already have a small presence in Singapore).
By the end of the year, they want to be stocked in at least one of the supermarket giants (“maybe two,” says Adams) and more than double the number of stores and cafes using their product from 300 to 750. The start-up is averaging quarterly revenue growth of 57 per cent over the last four quarters.
“It’s quite a lot to achieve here, but we feel we’ve got the right infrastructure in place,” said Adams.
To help kick things off, Oat Milk Goodness completed a $1.6 million capital raising, led by Rootes, among friends and family to spend on marketing. The start-up currently boasts a team of six, including the three co-founders.
“The funding we’ve got will keep us running for at least two years, probably longer, and we’ll see how we go down the track,” said Rootes.
On Smith’s part, he seems to be milking his new gig as entrepreneur and says it’s “quite satisfying” to see what started as just an idea blossom into a physical product in a cafe.
“I’m able to see the business from day one and watch it grow and be involved in all of the decisions. It’s something I’m excited about.”
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