A chemistry degree has helped Carl Hopwood sell over 25 million bottles of his British-made oat milk brand — along with plenty of trial, error and toil to produce the elements needed for start-up success.
From a testing kit at home in Lancashire where Hopwood launched his business in late 2019, Oato now supplies doorsteps via traditional milk rounds and is the only fresh oat milk in UK supermarkets.
“I knew there was a product to make but I didn’t necessarily know how to get there,” says Hopwood. “It was about conducting multiple experiments and not being put off by failure.”
Growing up in Exeter, Hopwood attended Steiner school and a local community college before studying chemistry at Edinburgh University. It was his first time in Scotland as he sought to get away from the West Country.
“It was an interesting four years and chemistry teaches you to be quite analytical in how you work and not to be too afraid of working hard,” he tells Yahoo Finance UK. “I knew it wasn’t for me but it was a good, gruelling academic experience.”
Carl Hopwood founded Oato as the only fresh oat milk in UK supermarkets.
A high proportion of chemists tend to go on to do accounting, but he instead opted for sales. “It’s a good base before you start a business,” says Hopwood, who also co-founded a customised garment business while at university.
Hopwood started work for a small US firm called Tech Soft 3D as their European business manager, where he would sell 3D visualisation software from his North West base.
“It was a great experience negotiating for the long-term and building up a relationship,” he adds, “having a pipeline of people who were maybe interested in your product, who you can keep the communication up and also learn about marketing.”
At their office, employees purchased their own cow’s milk and over eight years had switched to an oat milk barista for their coffee machine. “When you used the cow’s milk, you put the bottle into recycling, but with the Tetrapak cartons there was no way to recycle them and so the used ones were just stacking up outside the door,” recalls Hopwood.
“I thought there must be a better way to distribute this product than in a non-recycled Tetrapak. That was my first inspiration and creating a liquid product is quite similar to the backbones of chemistry.”
Hopwood purchased a table top stove with a magnetic stirrer where he could blend oats, water and enzymes together at home. Through trial and error he was able to land upon a recipe he and his housemates were happy with.
The business is committed to reducing its environmental impact and support traditional industry.
Having trialled a bigger batch at a local college, Hopwood then partnered with a brewery which could produce 5,000 bottles a week.
“On the production and chemistry side, I was trialling different batches at home and, on the business side, I set up a brand, registered the company, created a website and marketed it on Facebook as ‘Try a free pint delivered by a milkman’ before we had a route to market,” says the entrepreneur.
He quickly acquired a list of 1,500 who were interested in trialling oat milk. Location also proved key, with small, family-run dairies some of the few still existing in the UK who would wash and refill bottles with cow’s milk.
Oato was then able to team up with the dairies on the days no milk was bottled to produce its own product, using milkmen in Kendle and Lancaster where the fledgling company had 1,200 signed up for the trials.
“I thought if that was the volume across that population, what would it be across the UK? It was a good estimate of the potential scale,” adds Hopwood.
Carl Hopwood set up his fresh dairy alternative brand in 2019.
“We now want to be in 50% of fridges in the UK. We realised we could get a long way there through the milk rounds. If we want to reach everybody we need to supply retail.”
Oato now operates from a 55,000 sq ft facility in Preston. The difference, says Hopwood, is that he was previously paying per litre that was packed whereas now it is fixed overheads and staff costs to name but two.
“Although we have a much larger capacity, which we hope to optimise, there is definitely the concern when you are taking on a premises like that with a lot of outlay,” admits Hopwood.
“But I think what we’re doing is quite unique in the UK, coming in with a new product in single use packaging. Because we are a fresh product, it’s a much more tasty product to consume. It has that advantage.
“In retail, we are a small brand in terms of the awareness but our rate of sale is good in supermarkets because of the familiarity and the price point we can do.”
Hopwood is now setting a goal of crossing the 100 million bottles sold barrier within the next few years.
“It’s important to set goals that are achievable in the short term,” he admits.
“Being a single business founder and not taking on loads of investment [£60,000 to date] and not having a board of VCs saying to make that target bigger, which I am quite happy for, it means we can be quite realistic about the next target.”
Business hero Yvon Chouinard, Patagonia founder
He created a brand out of his own need, saw a small market and scaled it. It doesn’t feel like he’s grown a brand out of greed but out of authenticity. Sustainability has been a key factor in his focus for growth; the more you can spread the product out, the more sustainable people’s choices are.
With oat milk consumers and what we’ve done in creating a sustainable product, in terms of CO2 output it is one tenth of the dairy milk output.
Patagonia store owner Yvon Chouinard poses in his California shop in 1993 in California. ·Jean-Marc Giboux via Getty Images
A lot of oat milk doesn’t use British oats, whereas we use 100% British oats, while Tetrapaks aren’t sustainable due to not being recyclable.
The reused life span of a single Oato bottle is used by an average 28 households, with a 97% return rate. Producing a sustainable product in reusable glass was a combination of two things that has allowed us to accelerate our growth.
We had some push back going into the plastics, but the product itself is still very sustainable.
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