Few brands have stormed the food industry like Oatly, but a string of supply stumbles means it now needs to show it can meet rising expectations.

The Swedish oat milk producer took off after a full launch in the U.S. in 2017. Unlike other milk alternatives, Oatly achieves dairy’s creaminess without the usual cloying sweetness of offerings made with soy or almonds. That sparked rapid growth slowed only by the company's inability to keep up with demand, including selling out at Starbucks.

To fix that, Oatly Group raised more than $1.4 billion in an initial public offering in May to help build multiple production plants around the world. Those new facilities can’t come soon enough because the company is still only filling about 70% of its orders. That’s weighed on its stock, which is now trading below its IPO price. And it has a lot more to prove, with analysts expecting sales to surge 85% to $1.3 billion next year.

As the company expands, it’s continuing to focus on sustainability, both for its core dairy replacement product and the infrastructure needed to make it. CEO Toni Petersson says the brand’s popularity is largely from this commitment to the environment, but all those out-of-stocks and a flood of competition may be taking a toll.

Bloomberg recently spoke with Petersson about sustainability, why the Oatly brand is strong enough to overcome shortages and how Wall Street will eventually come around.

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Let’s start with your sustainability goals, like reducing water withdrawal by half and sourcing 100% renewable energy by 2029. What steps are you taking to get there?

That is continuously happening as we’re bringing more capacity onboard and building factories, which are more modern. We did reduce water usage about 60% last year in the two new plants. In Europe, we use electric cars and trucks, something we’ll bring to the U.S.

Leading a shift to a plant-based diet is a big part of your sustainability platform. How much bigger can this market get?

We know across our five key markets [the U.S., U.K., Germany, Sweden and Asia], that 35% to 40% of the population are purchasing plant-based milks. We also know that 60% to 70% of the current users across the key markets joined only two years ago.

There is a massive exploration happening here. A lot of people who care about sustainability still haven’t tested our products. This is a new phenomenon. It’s hard to predict, but something big is going on in society today.

So how do you convince consumers that Oatly is the brand for them, especially since so many likely tried competitors while you were sold out?

Not all oat milks are created equal. We know our consumers care about the emotional connection to the brand and the sustainability credential. We know we’re better than our competitors in driving that.

Are you relying on the brand too much, though?

We never could have done this without world-class products. If we look at Sweden, our home market, we had a supply shortage in Europe, too. During that period, we know from the biggest retailers that 30% of our consumers moved back all the way to dairy. They didn’t pick a competitive oat milk brand or soy milk.

When we’re on shelf again, people are coming back to us.

Why was Oatly so poorly prepared for the Starbucks launch?

The shortage is related to the incredible success of the launch — it’s beyond what we — anybody — thought. We’re delivering twice the forecast. It just speaks about the strength of this collaboration and the demand that is out there for our products.

Once all that new capacity is online, how much more will you be able to produce?

Because of the massive acceleration of demand, is it going to be enough? We don’t think so. I think we’ll have to add more capacity to the plants to be able to reach demand. We have to be very mindful in how we expand, and how we grow.

So with demand still so high, why has Oatly’s stock declined about 50% since hitting a high in June?

It’s not something we can focus on as management. We’re a new company. We’re a different animal. The commercial strategy is very different. The branding is very different. I think the market is going to get to know us more. Every quarter, they’re gonna learn more about us and our company.

Editor’s note: This interview has been edited and condensed.

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—Bloomberg News