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Oatly has announced a multi-year investment to expand production capacity at its Landskrona facility in Sweden, as demand for plant-based drinks continues to grow across Europe.

The upgrade will increase the site’s output capacity by more than 33%, raising annual production from 150 million litres to 200 million litres. The expansion will take place within the plant’s existing footprint.

Operational since 2006, the Landskrona site employs more than 300 people and serves as a fully owned production hub for the company. The facility also hosts several core business functions alongside Oatly’s nearby science and innovation centre in Lund, Sweden.

Simon Broadbent, SVP of sustainable operations at Oatly, said the investment reflects rising demand for the company’s products.

“We’re seeing growing demand for our products, so the time is right to upgrade our Landskrona site which has performed fantastically well in recent years, both in stability of output and outstanding cost management,” he said. “The Landskrona factory is a key site for us, not only because of our roots in Sweden, but also because it’s a fully owned, end-to-end production hub and home to many of our core functions.”

The project is also expected to reduce the company’s corporate climate impact in 2026 and 2027 through efficiencies in ingredient sourcing, distribution and energy use. The Landskrona facility already operates on 100% renewable energy.

Demand for plant-based drinks in Europe has increased by 6% over the past year, according to Oatly, with the company reporting double-digit growth in the region. Out-of-home and foodservice channels grew by more than 20% during the same period.

The company has been expanding its product offerings and consumption occasions, including new Barista Edition flavours and the launch of the Oatly Baristamatic system for automated coffee machines.

Following the expansion, Oatly expects to source more oats from Swedish farmers. Around 70% of the production from the Landskrona facility is currently exported, with volumes set to increase to support demand in markets including Germany, the UK, France and Spain.

The investment was first outlined during Oatly’s full-year 2025 financial results, when the company reported profitable growth in both the fourth quarter and the full year.

At the time, CEO Jean-Christophe Flatin said the results reflected strategic efforts over the past three years to restructure the company’s supply chain and cost base while reinvesting in growth initiatives.

Construction at the Landskrona facility is scheduled to begin in March 2026 and is expected to be completed by March 2027.