It’s like milk but made for humans – how Oatly has become a US$2 billion brand

It’s like milk but made for humans – how Oatly has become a US$2 billion brand

Dairy-free consumers and vegans have been longstanding fans of Oatly, the oat-based alternative to milk. But Oatly has now moved far beyond its early adopter market.

Started by Swedish scientists in the 1990s, it is now valued at US$2 billion, with sales in the US soaring by almost 300% year-on-year to June.

Its approach to marketing secures its status as a member of The Innovation 50. But after Blackstone invested US$200 million in the firm in September, there has been controversy. Consumers of one of the world’s most sustainable non-dairy milk brands have been angered as Blackstone’s head is a Trump donor and the private equity firm has also been accused of investing in companies contributing to deforestation in Brazil, which it denies.

Whether disgruntled Oatly fans can be won back will no doubt be a big marketing test. But history shows that Oatly has been up to the task.

Challenging the status quo

From the start, Oatly has not only packaged its product brilliantly but also shown the courage of its conviction. It has challenged the EU over its promotion of milk in Swedish schools, faced down a lawsuit from Sweden’s milk industry (even running ads that said it was being sued because its sales were increasing and stealing market share from milk), and used media to boldly encourage consumers to think about their everyday lives and the planet.

Remarkably for a marketing innovator, the company has no Marketing function. That was scrapped in 2012 and replaced by an internal creative department.

The company claims this has freed the team up to be flexible, take responsibility for ideas and be more creative. It seems to be working.

Keeping it fresh

Michael Lee, Creative Director at Oatly, says the team’s unconventional approach to marketing is what helps it deliver a unique brand personality.

“Staying fresh starts by removing all the obstacles that prevent you from doing good work. At our in-house creative department, the Oatly Department of Mind Control, we do our own strategy, develop our own ideas, produce our own work, approve it and run it. There are no ‘briefing’ meetings, no running the idea past ‘Sales’ or caring about ROI, KPIs or whether our brand awareness numbers are down. Because we work different, the work ends up being different,” says Michael.

Back when Oatly was a minnow compared to the dairy industry with a tiny budget to match, the company decided to seize control of its limited resources – primarily its packaging. This became the main media channel for its unique perspective and voice.

Product samples and t-shirts were also handed out free at music festivals.

A similar, down-to-earth tactic was used when its Oat Drink Barista was launched in the US. The team brought the product to elite coffee shops encouraging baristas to try it. Once they liked it, the Oatly team kept working with them to maintain momentum.

How to be unforgettable

Oatly’s approach to media has evolved since then.

Michael says, “We tend to think a lot about that moment when people meet us on a print ad or billboard or shelf wobbler and how that interruption, which is usually annoying or forgettable, can be something else entirely. Whether it’s provoking a debate or delivering an unexpected and totally detached thought, every interaction for us begins from a place of southern Swedish humility - that anyone at all is interested in something as dorky as oat drink.

Michael Lee... "inspiring consumers, politicians and industries to make changes"

“That said, we actually do believe Oatly can change the world by inspiring consumers, politicians and industries to make changes, toward more sustainable food choices. This means highlighting important issues for people to consider. The campaign ‘It’s Like Milk, But Made For Humans’, where we encouraged people to question the role of milk in our diet, got us sued in Sweden in 2014 but we still believed in the line, so we brought it to the UK.

“In 2019, we controversially called on London to ‘Ditch Milk’, provoking a reaction that managed to spark a meaningful discussion.

“Outdoor media lets us mainline our mission where it belongs – loud and proud in the public space.

"From there, the conversation and debate continues across print and social media and PR, while also giving people the chance to taste and experience the post-milk generation first-hand at festivals and bespoke events,” he says.

The Oatly approach

With sales doubling last year to US$200 million, Oatly’s product portfolio includes spreads, on-the-go drinks, ice cream, and more recently yoghurt.

The marketing strategy remains true to its original approach.

On its current yoghurt – or Oatgurt – campaign strategy, Michael says, “‘Normal’ might seem like a pretty unambitious standard to shoot for. But for a plant-based yoghurt to be described as normal-tasting, well that’s a win in our book. So, we decided to celebrate the launch of our new Oatgurt range with the line, ‘Tastes Totally Normal’ at a time when normal was in short supply, all across London.

“Multiple OOH units and special builds combine with dumb headlines that try, and mostly fail, to make ‘normal’ interesting to passers-by, while print and social media take the ‘normal’ discussion further by questioning whether it’s normal to include a cow as a pre-processing plant for your daily muesli fix,” he says.

So we can expect to see more marketing interruptions from Oatly that spark debate and provoke awareness in future.