Known for its guerilla approach to advertising and brash, tongue-in-cheek packaging — Oatly is a stand-out brand that takes a bold approach to marketing.
From publishing the actual text of a lawsuit against its slogan “Milk, but made for humans” in Sweden to launching a European-wide ad campaign called “Are You Stupid?” — Oatly’s irreverent approach to winning over consumers has been surprisingly successful.
Though the company has been around since the early 1990s, it only started picking up steam around 2014 when it relaunched the brand under the guidance of new CEO Toni Petersson. With an increased focus on sustainability and health, Petersson and the marketing team crafted a new brand voice: quirky, somewhat flippant, and definitely humorous — it became their calling card, of sorts.
However, it hasn’t all been smooth sailing for this milk alternative brand — from backlash surrounding chosen investors to fighting Amendment 171 in the EU, Oatly has faced its fair share of setbacks and challenges.
Still, having gone public in 2021 via an IPO valued at up to $10.1 billion, this sassy vegan brand is on the up and up. But how did it reach this point in its growth, and what can you learn from its wins and losses? Let’s dive in.
Oatly’s Journey To Success
Source: Oatly Press Kit
Oatly was founded in the early 1990s by Swedish brothers — Rickard Öste, a food scientist, and his brother Bjorn. The inventors of oat milk, the brothers were researching alternatives to cow’s milk for people who were lactose intolerant.
Though they were successful in creating such a product, Oatly didn’t really make it big on the international scene. That is — until the brand brought in Toni Petersson in 2014 as CEO. With previous roles as CEO in a myriad of companies, Petersson brought a good deal of experience and knowledge to the role.
The first big changes Petersson made? The packaging. Previously, Oatly’s cartons had a small, red “Oatly” logo in the top left corner. Forgettable and somewhat bland, this logo, placement, and overall packaging style had to go.
Source: CNBC Make It
In a bold move, Petersson opted for a combination of block and bubble letters that spelled out “OAT-LY!” in the center of each carton. Additionally, the packaging copy was changed from Swedish to English in an effort to be more accessible to a global audience.
Petersson also did away with the professional, informative tone of the former packaging and utilized Oatly’s new brand voice and personality. Cheeky and fresh, this new copy proved far more eye-catching and entertaining to consumers.
Source: Oatly Press Kit
Petersson’s next move was to focus on Oatly’s environmental impact and sustainability. He commissioned a report in 2017 that would show how Oatly is better for the environment than traditional dairy. The findings? Circular X reported:
“Oatly estimated that its oat drink can reduce greenhouse gas emissions by 80%, land use by 79% and energy consumption by 60% compared to a same size portion of cow’s milk.”
With this kind of data at hand, Petersson could make bold claims about the superiority of oat milk in the areas of sustainability and environmental preservation — which are included in each carton's product information.
Another tactic Petersson used in 2017 to promote their products in the U.S. was to get in at the ground floor with local baristas. Oatly actually sent representatives to high-end coffee shops in places like New York City to share and test their products with local baristas.
The thought was that if baristas could recommend and use Oatly’s milk with customers, it would lead to higher rates of interest. Of the strategy, the brand's U.S. General Manager Mike Messersmith told CNBC Make It:
“We thought about specialty coffee shops and tea shops, where if you were able to take the recommendation of your local barista you see every day, and try our product through an expertly prepared latte or cappuccino that would be a really amazing way to kind of be introduced to even just the idea of oat milk”.
Petersson’s changes paid off. Between 2017 and 2019, Oatly’s revenue in Europe went from about US $15.5 million to about US $69 million. That’s a massive increase for just two years. And in 2020, Oatly reported revenue of US $421.4 million — which is a 106.5% increase from their 2019 revenue.
However, Oatly’s success hasn’t made it immune to controversy or bad decisions. In 2020, Oatly sold $200 million in stake to a myriad of investors — with one such investor being the Blackstone Group, a company that has been accused of financing businesses contributing to deforestation in the Amazon and road development in the jungle to export soy.
Shortly after this was announced, Oatly faced backlash from consumers on social media and had to deal with their first “cancel culture” experience. Though many consumers are still not happy about the brand's association with Blackstone, it hasn’t seemed to damage its reputation or sales in the long run.
Now one of the largest oat drink companies in the world, Oatly offers a wide variety of oat-based products — from milk to ice cream to yogurt to spreads. Valued at $2 billion for the worldwide market in 2021 and having made $669 million in Q1 2022 revenue, Oatly is not slowing down any time soon.
What Can You Learn From Oatly?
Source: Oatly Press Kit
Oatly went from a relatively unknown Swedish oat milk brand to a globally recognized giant of the industry — it just took about 30 years and the addition of a visionary as CEO.
However, when it comes to Oatly’s more recent global success, there are a few pointers other brands can use for their own growth journeys. Let’s take a look.
1. Don’t Take Yourself Too Seriously
Everything about Oatly screams “fun”. From its billboards to its TV spots to its packaging. Oatly’s distinctive brand voice makes its communication entertaining and laid-back, which increases accessibility.
It’s clear to consumers that this brand doesn’t take itself too seriously. In keeping with the younger generation’s more irreverent approaches to humor, Oatly approaches almost every situation with its trademark wit and humor.
However, as the brand grows, it’s nearing the edge of the challenger brand category — which means it will start having to change its approach to marketing and branding in order to find continued success.
The Takeaway? Of course, this type of brand personality won’t work for every brand. However, it’s still a good approach to keep in mind for your brand’s internal workings. Don’t take yourself or your brand too seriously — it can put unnecessary pressure on your employees.
Instead, try and see the humor in your mistakes. By taking a down-to-earth approach, your brand is seen as more relatable.
2. Turn Losses Into Wins
As previously mentioned, Oatly has had its ups and downs. In 2015, Oatly was sued by the Swedish dairy lobby LRF Mjölk for “disparaging cow milk.”
After Oatly lost the case, the brand was ordered to “stop referring to its own product as milk and to stop implying that cow milk is either unhealthy or not fit for human consumption.”
In many ways, this loss could have been a devastating blow for the up-and-coming brand. However, Oatly and Petersson didn’t take this loss lying down — they responded by publishing the text of the lawsuit, “making LRF Mjölk look like it was bullying the tiny oat company.”
This tactic worked, and Oatly’s sales in Sweden soared. In 2018, the brand successfully used its Swedish-banned slogan “Milk, but made for humans” in a £700,000 billboard ad campaign in the UK.
Instead of bowing to a hard loss, Oatly tapped into its ingenuity and devil-may-care attitude to turn it into a win — a strategy that challenger brand Glebe Farms actually used against Oatly in 2022!
The Takeaway? During your own growth journey, you’re bound to deal with a loss or two — something doesn’t go your way or a huge campaign flops.
Instead of lamenting your loss and moving on, take a deep dive into what happened and see if you can turn it into a win. Get creative and take risks — you never know how it may pay off.
3. Be Willing To Fight For Your Future
Source: Oatly Press Kit
Over the last year or so, Oatly has been working hard to fight Amendment 171 in the EU Parliament. They even went as far as to create a campaign called “Are You Stupid?”, which showed results from focus groups of consumers correctly identifying products that do and do not contain dairy.
Supported by the European Dairy Association, this amendment claims that current marketing and packaging guidelines for plant-based products are “misleading” consumers.
If enacted, it would ban non-dairy products from using “dairy-based descriptors” — such as “dairy”, “creamy”, or “does not contain milk”. And according to The Drum, Amendment 171 would also “impact climate footprint comparisons, where comparing the emissions to dairy could no longer be allowed.”
While Amendment 171 was approved by a majority vote in the European Parliament in October 2020, the EU withdrew the amendment on March 25, 2021. This was a big win for brands like Oatly, as it allowed plant-based dairy brands to continue using dairy-based descriptors in their packaging and advertising.
The Takeaway? When something happens that could impact your company negatively, you need to take a stand. While it may sound a bit dramatic, no one will fight for your future if you don’t.
When Oatly saw how Amendment 171 could affect its future, it got involved and took action. As a growing brand, you must also be willing to go to the mat for things that will make or break your company.
Oatly isn’t by any means a perfect brand. While it has great brand values it tries to live up to, it sometimes falls short. However, through creativity, daring, and a knack for problem-solving, Oatly is managing to dominate the oat milk market — and you can find out more by checking out our Oatly Brand Bite.
However, Oatly will need to be careful that it doesn’t cling too tightly to its challenger-stage brand personality as it continues to grow. In order to be successful as a market leader, Oatly will need to accept that the strategic approach that allowed it to reach its current heights may no longer propel the brand further. And, in actuality, could hinder its future growth.
Nevertheless, for brands looking to recreate Oatly’s success, we recommend following the tips provided above. And if you want to go the extra mile and get access to the consumer insights you need to succeed, brand monitoring software is the solution you’re looking for.
After all, brands like Oatly have a deep understanding of what their customers want and need — shouldn’t you follow suit?
Updated by: Cory Schröder on 18.11.22