Starbucks (NASDAQ:SBUX) announced Tuesday that it would introduce oat milk regionally and add two new dairy-free drinks to its U.S. and Canadian menus.
Oat milk will be coming to 1,300 cafes in the Midwest, including locations in Illinois, Iowa, Michigan, Minnesota, Missouri and Wisconsin.
The coffee giant has cautiously embraced the latest trendy dairy-free milk. In March 2019, it announced that it would offer oat milk supplied by Elmhurst 1925 at five Starbucks Reserve locations, about a year after it started offering the dairy-free alternative in European locations.
The oat milk in Midwestern locations will be supplied by Oatly, the Swedish oat milk maker that kicked off the trend.
Oat milk’s surge started in late 2016 when Oatly entered the U.S. and targeted trendy coffee shops like Chicago-based Intelligentsia. Oat milk sales have skyrocketed 636% in the 52 weeks ended Oct. 26.
But oat milk makes up only a small fraction of the larger alternative milk market, which reached $2.3 billion in 2018, according to Mintel estimates. At the same time that non-dairy milks have been surging, Americans are drinking less cow’s milk.
With its sweet flavor and a smooth texture that froths like cow’s milk, oat milk has won over consumers and baristas alike. The dairy-free drink is made by soaking oats in water.
The coffee chain is also adding two dairy-free coffee drinks: the Almondmilk Honey Flat White and the Coconutmilk Latte. Both beverages are made with Starbucks’ Blonde Espresso and will be available in participating U.S. and Canadian cafes.
Shares in SBUX faded 16 cents to $87.97
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