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Swedish oat milk company Oatly has revealed it is conducting a strategic review of its Greater China business amid a broader evaluation of its operations in Asia.

The announcement was made as part of Oatly’s financial results statement for the second quarter of 2025, shared yesterday (23 July).

A range of options will be considered as part of this, including a potential carve-out of the Greater China segment. Oatly said there is no definitive timetable for completing the strategic review, which aims to 'accelerate growth and maximise the value of the business'.

In Q2 2025, Greater China revenue decreased by $1.9 million (6.4%) compared to the prior year period, with the decline primarily driven by a reduction in sales across the foodservice channel.

Approximately 62% of Greater China revenue was from the foodservice channel for the second quarter of 2025 compared to 70% in the prior year period.

The review of the Greater China business comes amid a broader, previously initiated evaluation of Oatly’s Asian supply chain.

In December 2024, the company announced the closure of its facility in Senoko, Singapore, as part of an ‘asset-light’ strategy that aims to improve cost structure. 59 employees were impacted by the closure of the $30 million site, established in 2021 in partnership with local F&B producer Yeo Hiap Seng (Yeo’s).

In its fourth quarter results for 2024, the company also announced the discontinuation of construction of what would have been its second manufacturing facility in China.

Currently, the group's China operations are based out of one facility in the country's Anhui province, opened in 2021 shortly after the Singapore site was established. According to Oatly, the China factory can produce up to 150 million litres of oat-based products annually at full capacity.

The oat milk giant, which reported revenue of $208.4 million in Q2, refined its 2025 outlook to reflect a ‘softer than expected’ macro-environment in Greater China, as well as reduced expectations in the North America segment.

Revenue growth is now expected to be in the range of approximately flat to 1%, compared to the prior expectation of 2-4%.

Oatly's CEO, Jean-Cristophe Flatin, commented: “In the first half of the year, we made good progress on our 2025 priorities”.

“We continue to drive cost efficiencies in our supply chain and overhead structure, and our disciplined execution of our growth playbook has seen success in our Europe and International segment, where we are seeing top line momentum. All of these steps are aimed toward our goal of consistently improved profitability.”