SunOpta has injected $26m into its shelf-stable oat milk production site in Modesto in California.

The money was used by the group to build a new oat extraction production line at the plant, which started operations last month.

SunOpta claims the addition is its “second largest” expansion project completed to date in the US.

The move is expected to help the group grow its annual oat milk production by 60% starting from 2025, it told Just Drinks.

The technology installed uses a “proprietary enzymatic processes”, which turns oats “into a liquid oatbase” to be used used to manufacture oat-based products such as oat milk, ice creams and yogurts.

SunOpta processes dried and liquid oatbase as an ingredient for other food and drink manufacturers at the Modesto plant, as well as private-label oat milks for brands, foodservice and retailers in the US.

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It also owns three plant milk brands: West Life, Sown and Dream.

Seventeen new jobs have been created at the new production line, bringing the total number of employees at the factory to 208.

Besides Modesto, SunOpta owns three other US-based shelf-stable drinks and broths factories in Allentown, Pennsylvania, Alexandria, Minnesota, and Midlothian, Texas.

The company said it predicts the shelf-stable plant-based milk category to grow in “mid-single digits” in volume terms in 2024, “across all channels combined”.

Commenting on the news, SunOpta CEO, Brian Kocher, said the investment means it is “well positioned to meet the increasing market demand for plant-based milk and other oat-based products”.

Joe Gerhardt, senior manager of the Modesto plant, added: “We are proud to be a leader and partner in the local community for the long term, fueling the future of food.”

In May, the plant milks manufacturer indicated it would be open to M&A by the end of the year.

Speaking to analysts following the release of its first-quarter results for the period ending 30 March, Kocher said: “We’ll look at attractive ROI projects, we’ll look at potential share buybacks based on the stock price at that point in time, or attractive M&A deals”.

He added: “Those continue to be the options we continue to evaluate every day. And once we get there towards the end of the year, we’ll give you a further update.”