December 2018 Brand of the Month: Oatly! Part I

“We know how it sounds. Tall, blond, beautiful, hard to get, extremely liberal with no sense of attachment or responsibility whatsoever. Sorry to disappoint you,that’s just not us. We are the other Swede – somewhat boring, super practical,painfully honest, notoriously hardworking and independent not because we don’t want to be social but merely because we want to have the right to say what we think and do what we think is right. If we wanted to be one of those gigantic food corporations or have some old man behind a wooden desk in a tall building make decisions for us, we would all quit our jobs and go work for an old man behind a wooden desk in a tall building making gigantic food company decisions for us. Don’t hold your breath.”

Who is this saucy person, you might ask? This is the voice of a beverage start-up that is challenging consumer expectations of product vs. brand, redefining the relationship between supply and demand, and, apparently, eluding a vast population of agonized Brooklyn residents.

Meet Oatly.

Oatly is a 25-year-old Swedish based oat milk company, founded by Rickard Oste, at the University of Lund, who was researching the intersection of lactose intolerance for human populations and the effect of food systems like the dairy industry on sustainability and climate change. We know what you’re thinking – almonds don’t grow in Sweden. But oats do. Oats are an easy-to-grow, durable cold-weather crop with high nutritional value.

The researchers in Sweden created a patented process to liquefy raw oat kernels and turn them into a food base, and voila! Oatly was born. Then it hung around in Europe for a while, before making its way into the U.S. in 2017.

The substantial flavor and creamy mouthfeel of oat milk has made it extremely popular not only with customers seeking dairy alternatives, but with coffee drinkers and baristas too. The thick, milk-like consistency makes it way more appealing than soy milk or almond milk, which tends to congeal into those gross boogers along the rim of your coffee mug. Oat milk has a backbone when it comes to coffees and lattes.

Oat milk itself is a new entrant into an established, large category of plant-based dairy milk alternatives. Dairy milk sales have declined, and sales of plant-based alternatives grew 9% to $1.6 billion in a recent 52-week period, according to Nielsen and the Plant Based Foods Association.

But Mike Messersmith, U.S. General Manager of Oatly (otherwise known as the guy pioneering oat milk in the States) insists that Oatly is not a trend – Oatly moves with true clarity of purpose, due to its unique combination of European heritage and U.S. start-up culture. “For us, there is a much more grounded purpose of why this company exists, why we chose oats, why we think this is an important and big idea. It’s not grounded in a trend or a fad, it’s grounded in making a really nutritious product that doesn’t tax environmental resources in the process of making it,” he says.

In short, Oatly never forgets where it came from.

Product v. Brand

Unlike other start-ups, Oatly treats the two elements of product and brand as one in the same.

(Photo courtesy of TheChallenger Project).

“You can make a lot of products with a plant-based milk, but why? Why do we need these products to exist?” Mike asks. “We have a high degree of clarity around ‘why oats?’ They are an amazing agricultural crop that can help farmers be more sustainable. They don’t require tons of water, herbicide, or pesticide so they have very low taxing of our earth’s resources. They have great nutritional content [including] fiber and protein.”

But Oatly doesn’t often talk about these reasons in clinical, functional “branding” language – and this choice resonates with people. 

John Schoolcraft, the Creative Director of Oatly, has written fun, unexpected (never quirky or frivolous) content for Oatly that disarms the consumer, and makes them feel good. The side of Oatly cartons powerfully states their political and moral beliefs, and their “promise to be a good company.” As heard on podcasts like Pod Save America and as seen on U.S. and European billboards, Oatly reassures consumers that they have the freedom to decide what they like, even going so far as to say in one billboard, “Thanks for your attention. You might want to stop by Irma and try one of these oat drinks. Or not. Whatever.”

“That voice is not trying to take on a persona,” says Mike. “The brand is channeling why we think this company is special and explains it in the real way, and it’s not trying to advertise to anyone.”

One of the driving forces of authentic communication is transparency. Oatly avoids trying to “sell” to consumers – no images of happy cows, or talk of swimsuit bods, or animations of stars made of oat milk circling a globe. Instead, it practices being open and honest about what is great about their product: nutritious, delicious, made with as least harm to the environment as possible.

Oatly also happens to be vegan, non-GMO, non-dairy, nut-free, and soy-free. But Mike insists that they did not make the product with the intention of attracting consumers with those attributes (or that branding, depending on how you look at it). “We have a degree of conviction and confidence in who we are and why we are doing the things we are doing. That may not be for everybody and we are okay with that!”

Redefining Supply + Demand

It’s no secret that Oatly is hard to come by these days.

But we wanted to know: how do you build a product into a consumer’s weekly shopping routine at the grocery store or daily coffee fix, if it’s not on the shelves every week?

(Photo courtesy of FoodNavigator)

Mike explained that we were approaching this question in a not-so-Oatly way. Oatly did not necessarily see this as an urgent “problem” (though they are definitely working on it). It was more a question of values. There was no way they were going to ransom the integrity and quality of Oatly in order to meet demand.

“We have a very specific process by which we turn those raw oat kernels into the core ingredient for our product and that’s what we’ve patented and perfected over 25  years in Sweden,” Mike says. “There’s intellectual property and special manufacturing equipment and techniques that go into making our product. That is what helps make it great and what makes people like it: the way that we make it.”

Remember, Oatly is still a start-up in the U.S., despite its established history in Sweden. Most small companies starting a new venture don’t have the large factories or access to resources in order to build. Oatly found a handful of capable third party manufacturing partners, as many early-stage food and beverage companies do, and expected these systems would last them years. But then things worked.

“Scaling natural products food companies is the one the hardest things and most challenging things you can do. And that is scaling your systems, scaling your culture, and scaling your manufacturing,” Mike says.

So again, it came back to the values of the company, the words they have printed on their packaging. “I could have gone out and found more free capacity on the market but they didn’t have the processing capabilities to make the product to our specifications. You can’t sacrifice the quality of the product that made people want it to begin with in your desire to make sure that you can service all your demand.”

But…Climate Change?

Besides maintaining the quality of the product and integrity of the brand, Oatly also insists on minimizing environmental output by scaling appropriately. The environmental impact of scaling up Oatly is a two-way street. Scaling up might do some damage. But the more Oatly grows (and sticks to and improves on its practices), the more, over time, people will begin to shift to a plant-based economy away from an animal-based economy.

“In the aggregate, the impact agriculturally and the impact of us making more accessible plant-based options for consumers is a really powerful positive for the environment.”

Individuals feel helpless when it comes to climate change, and don’t know how to make a difference at an individual level. Shifting to a plant-based diet “places less strain on the food and beverage systems of the earth and can be a way that people have individual impact in the face of those challenges,” says Mike.

It also gives more market output for food grade oats, which in turn is a great ,and much-needed, agricultural phenomenon for farmers in the U.S. and Canada. “Systems are changing right now. I have appreciation for the challenges that dairy farmers across the U.S. are feeling these days with shifting consumer tastes,price challenges, and innovation challenges.”

There’s a well-grounded concern that the government is not going to take control and fix or even improve the future of our planet. But consumers can lead. As a consumer, your wallet speaks to what your values are and what you believe. Consumers aren’t taught to think of their purchases that way, but power lies in your wallet, and where you put your money.

“If people are genuinely concerned as they should be, they have to think about how they implement changes within their whole life, and one of those is their diet. That’s something that Oatly seeks to make easier for people,” he says.

Thanks Oatly!

By | 2018-12-14T13:03:38-05:00 December 13th, 2018|Blogs|