A Southland-based oat milk producer is receiving a government backing to help it make a splash in the growing milk alternatives market.
The $6 million loan from the Regional Strategic Partnership Fund has been earmarked for New Zealand Functional Foods.
Economic and Regional Development Minister Stuart Nash said it would help to provide the capital for them to build a specialised, large-scale processing plant at Makarewa.
The plant would have the capacity to produce up to 80 million litres of plant-based milk a year.
Nash said New Zealand didn't currently have the appropriate processing facilities to domestically produce the volumes of oat milk required to make an impact in the burgeoning market.
"Plant-based milk alternatives are a fast-growing segment of domestic and international consumer markets, with the amount spent by Kiwis on plant-based milks almost tripling from $52 million in 2017 to $144 million in 2019 - so the demand is definitely there," he said.
"We know that oats grow well in Southland, and being low in water use, land use and emissions, they are an excellent raw ingredient for an environmentally sustainable alternative-milk option.
"Producing oat milk locally is a lucrative way to diversify our strength as a quality food producer."
Nash said he was confident the new facility would add to the reputation of Southland and Aotearoa as a real player in the sustainable food and beverage sector.
"The investment is part of our wider government strategy to develop a low-emissions, highly-skilled economy that responds to global demands."