Operational cuts have defined Oatly’s Asia strategy since 2024. The closure of a $30 million Singapore facility last year eliminated 59 jobs, part of an “asset-light” cost-cutting plan. China operations now rely solely on the Anhui plant, opened in 2021, after canceling plans for expansion.
A broader supply chain review across Asia aims to streamline operations and improve profitability. Adjusted EBITDA losses shrank by 67% to $3.6 million in Q2 2025, but executives warn challenges persist.
Oatly’s Asia supply chain overhaul slashed Q2 2025 EBITDA losses by 67% to $3.6 million, though challenges remain despite profitability gains.
A mid-2025 strategic review of Oatly’s China business could lead to restructuring or full withdrawal. The strategic review process incurred $1.4 million in costs during Q2 2025, according to company disclosures. The review comes as Oatly’s Greater China sales fell 6.4% year-over-year in Q2 2025, primarily due to reduced orders from foodservice partners. CEO Jean-Christophe Flatin acknowledged reassessing the company’s business model and growth expectations there, citing weaker sales and economic pressures. This follows a $9.25 million class-action settlement in 2024 over claims Oatly overstated its China growth, revenue, and market penetration during its 2021 IPO.
Investors accused the company of exaggerating café partnerships and production capabilities, triggering lawsuits and negative media coverage.
Despite setbacks, China’s plant-based market shows promise. Valued at $2.37 billion, it’s projected to grow nearly 11% annually through 2029. Oatly claims its China sales by January 2025 could make 1.4 billion oat lattes, with products in coffee shops, stores, and restaurants.
The firm continues targeting eco-conscious consumers shifting from dairy. However, leadership now prioritizes profitability over expansion, signaling tough choices ahead. While recognizing China’s long-term potential, Oatly’s next move hinges on balancing optimism with the financial toll of its rocky three-year journey.
