Wide Open Agriculture (ASX: WOA) has secured its largest distribution deal to date, locking in supermarket giant Woolworths Group (ASX: WOW) as a supplier of its carbon-neutral, regenerative oat milk.
The regenerative food and farming business today revealed its oat milk OatUP, produced under the Dirty Clean Food brand, will be available for purchase in “approximately half” of Woolworths’ stores across Australia.
The product will launch at the supermarket chain’s premium concept store “The Kitchen” in Double Bay (Sydney) from next March under an initial one-year term.
The agreement represents the largest distribution deal for Dirty Clean Food to date and is expected to generate more than $750,000 in sales per annum.
Wide Open Agriculture managing director Dr Ben Cole said the company is thrilled to collaborate with Woolworths and has been impressed by the group’s knowledge of regenerative farming practices.
“Woolworths Group’s Sustainability Plan 2025 demonstrates their commitment to encouraging regenerative farming practices and to have net carbon positive emissions by 2050,” he said.
Key terms of the deal
The first shipment of OatUP is expected to be delivered to Woolworths by 4 March 2022.
Both parties anticipate a demand of approximately 10 litres by store per week. This figure will be revisited post-launch.
Wide Open has agreed to 12 months of exclusivity with Woolworths from April 2022, which excludes sales to Coles and Aldi during this period.
The company will begin production of new flavours, which will be made available to Woolworths if desired. These include Barista Oat Milk, Chocolate Oat Milk and Cold Brew Coffee Oat Milk (in a can).
Dirty Clean Food plans to continue expanding its distribution network in Australia and Asia over the next six months and expects the total store count of partners carrying its oat milk to eclipse 1,000 this fiscal year (June 2022).
“Phase one of Dirty Clean Food’s plan was to prove that customers will embrace the opportunity to purchase regenerative and truly ethically produced food,” Dirty Clean Food chief executive officer Jay Albany said.
“Having done that in Perth, we are now focused on extending our distribution and reach.”
“We are now on track for distribution in over 1,000 locations by the end of this fiscal year, which we see as an incredible positive response for a new product launched less than 12 months ago,” he added.
“Our brand is driven by taste, quality and unmatched environmental credentials – attributes that consumers everywhere can appreciate.”
Dirty Clean Food’s OatUP is currently available in more than 350 outlets across Australia with support from major independent grocers in New South Wales, Western Australia, South Australia and Victoria.
The company receives ongoing positive feedback and repeat orders from independent distributors including European Foods (WA), Ultimate Fine Foods (SA) and the Market Grocer (NSW and Victoria).
OatUP was also recently accepted into the Metcash ‘cash-thru program’, which is expected to extend penetration into the national IGA network.
Wide Open is also focused on launching its OatUP product range globally and reported it has received and shipped multiple orders from its Singapore distributor GrowHub.
The company believes Dirty Clean Food’s OatUP is “ideally positive to take advantage of a number of promising commercial tailwinds” across the current US$3.7 billion (A$5.1 billion) oat milk market.
It is estimated that the sector will grow at a compound annual growth rate of 9.8% each year to 2027. Sales are also outpacing more established alternative milk types including almond and soy.