Swedish Farmers Take 10% Stake in Pea Milk Startup Sproud

Swedish agrifood company Lantmännen has become a part-owner of Malmö-based pea milk maker Sproud, as part of its larger pea protein push.

On the back of another year of sales growth, Swedish plant-based milk startup Sproud has gained the backing of the country’s largest farmer cooperative.

Lantmännen Biorefineries, part of the namesake group, has acquired around a 10% stake in the pea milk maker, with further terms of the deal undisclosed.

The group was part of a new round of funding for Sproud, which saw Findeln Holding and VGC Partners join in as well. Sproud staff were also given the opportunity to buy into the round, which closed at 21.6 million kronor ($2.2M), CEO Sara Berger told Just Drinks.

It follows multiple investments in the company over the last 12 months, including a 14.4 million Swedish kronor ($1.4M) round in September, and a cash injection by Love Island host Maya Jama a month later. It means the company has raised $19.6M since being founded in 2019.

Sproud sales soar in nascent pea milk market

Sproud’s core range of pea milks is made up of its unsweetened, barista, sugar-free barista, vanilla, and chocolate flavours, as well as two ready-to-drink iced lattes. And last month, it launched a 2-in-1 cream alternative for use in both whipped applications and cooking.

While its core market remains in Europe, Sproud exports to 30 countries, including in North America and Asia, with retailers, coffee shops and restaurants alike stocking its non-dairy milks. The firm recorded 43 million kronor in turnover in 2023 ($4.1M at the time), a 37% hike from the year before. It sustained that momentum last year, when sales hiked by another 35% to reach 58 million kroner ($5.9M).

It’s a small cog in the $22B global plant-based dairy industry, but for Sproud, there is cause for optimism. Among consumers’ biggest complaints about the non-dairy category are the perceptions that non-soy options have low protein content, soy milk itself can be too beany, oat milk causes glucose spikes, and almond milk is bad for the bees and planet.

While most of these issues are largely unfounded or unproblematic, they still cut through to the public. By using peas, though, Sproud seeks to address concerns around protein and sugar content. It has 2.5% protein content, much higher than almond or oat milk, while its flavoured versions aren’t as high in sugar.

For example, while Alpro’s vanilla milk contains 6.8g of sugar per 100ml, Sproud’s pea protein version only has 3g per 100ml. This would make it exempt from the UK’s soon-to-be-updated soft drinks industry levy, which will place an 18p per litre tax on products with 4g or higher of sugar per 100ml.

According to CarbonCloud, Sproud is the most climate-friendly milk alternative out there. Its unsweetened version generates just 0.28kg of CO2e per kg – in comparison, Oatly’s Semi oat milk has a footprint of 0.47kg of CO2e per kg.

There’s another crucial advantage: when it comes to pea milk, the number of brands is far and few. In the US, this market is dominated by Ripple Foods, while in Europe, Sproud’s only competition is Mighty, though the latter now only has one pea milk SKU after shifting focus to oat milk. It gives Sproud a major advantage to fill the gap.

“We are in an exciting phase with an expanded innovation pipeline and strong growth. Global demand for plant-based products is rising, driven by consumers’ growing interest in health, sustainability and the food of the future,” said Berger.

Lantmännen’s pea protein focus amid supply chain disruption

Lantmännen’s backing of Sproud is part of its wider pea protein push. “This investment is an important step in strengthening our presence and knowledge in the entire pea protein value chain,” said Fredrik Krook, managing director of Lantmännen Biorefineries.

“We have great interest in plant-based proteins, not least considering our current efforts in Lidköping,” he added, a reference to the company’s plans to build a 1.2 billion kronor pea protein facility ($116M at the time) in the Swedish municipality.

The cooperative, owned and operated by over 17,000 farmers, received a €50M ($55M) loan from the European Investment Bank last month to help fund the construction of the factory.

It will be able to process up to 40,000 tonnes of peas grown by the group’s members every year, producing around 7,000 tonnes of protein. It’s expected to be completed in the first half of 2027f and contribute up to 30 new jobs in the region.

It will produce plant proteins for use in applications like protein bars, drinks, breads, as well as non-dairy alternatives and meat analogues. The group explains that peas and beans are climate-smart, versatile crops that require relatively little water and nutrients, and benefit biodiversity. It is unclear if the factory could be a future ingredient source for Sproud too.

This focus comes amid widespread uncertainty in the pea protein segment. Chinese pea protein had been determined by the US government as being dumped into the North American market at “less than fair value” prices, while unfavourable weather conditions in Europe brought disruptions across the ingredient’s supply chain.

Lantmännen argues that ramping up the use of Swedish-grown legumes could help lower the share of imported soy in the region’s food production, bolstering both Sweden and the EU’s sustainability goals.

It is also working with Örebro University’s PAN Sweden research centre on a state-funded plant protein project and with ingredient giant Ingredion to speed up the development of pea protein isolates.