A new Southland company which aims to take a leading role in New Zealand's oat milk industry has appointed its first boss.

Justin Riley is now chief executive of New Zealand Functional Foods Ltd, which plans to be open for business in 2022.

Based in Makarewa, Southland, the company's current shareholders are Great South (the Southland Regional Development Agency) and K1W1, Sir Stephen Tindall's investment company.

New shareholders will be coming into the company to fund the development, its board chairman Roger Carruthers says.

Originally from Invercargill, Riley has had a distinguished and successful career, including 18 years with Barker's of Geraldine in several senior roles, including CEO.

"I'm incredibly proud to be returning to Southland, a province which has given me so much," he says.

"Working with the New Zealand Functional Food Board and Southland’s oat growers to harness the region’s productive soils and to lead New Zealand forward in this innovative category is great for Southland, great for consumers and great for New Zealand."

The company intends to initially producing oat milk for individual New Zealand brands, as well as leading research in further developing this rapidly growing market space.

"Alternative milks and especially oat milk has moved quickly from being a niche food and is gaining enormous global traction amongst those who are consciously prioritising sustainability in their food choices", Riley says.

Carruthers says Riley is a "highly experienced executive with a strong background in the food industry".

He was chosen through a competitive selection process from a strong field of candidates, both locally and internationally.

The company is planning for an initial factory capacity of 40 million litres per annum, after gaining confidence from positive discussions with the country's current and planned oat milk brands.

"It is very important to us to be leading the shift in industry toward carbon neutral manufacturing practices and is central to our planning and development," says Carruthers.

"We are also in discussions with New Zealand research institutes and government to develop New Zealand’s expertise in this burgeoning industry.

“We really want to develop the New Zealand provenance story around Oat Milk. Supporting farmers to employ sustainable farming practices is key to that story."

He says there has been strong interest from investors.

"We are looking forward to taking those conversations to the next level in the coming weeks. Justin’s appointment is a key milestone in that work programme."