Saturday 29 May 2021 10:00 am

Oatly has climbed to the top of the legion of alternative milks. Can it keep up the momentum?

Sairah Ashman is the CEO at Wolff Olins

Oatly shares soared in its stock market debut last Wednesday and the alternative-milk giant was valued at a staggering $13bn, after its sales doubled in 2020 to $421m.

The Swedish brand benefits from being born green; with dairy alternatives measurably better for the planet and far better tasting than a decade ago. Climate change concern and the rise of the plant-based movement mean Oatly has managed to capture and capitalise on a moment.

It’s predicted dairy alternatives will double in the next five years. There’s the potential for longevity and Oatly has the ability to use its growth to build a global brand that could eventually catapult the category, making them a mainstream lifestyle choice of the future.

A lot of the right brand ingredients are already in place.  Their company mission, attitude and tone are key to their success. It works as well in kitchens as it does in supermarkets and coffee shops. CEO Toni Petersson, a master marketer in his own right, has made himself central to the brand, with Super Bowl ads featuring him singing “Wow, no cow”. 

Oatly has honed in on a zeitgeist, much like Innocent Drinks jumped on the start of a juice craze. In our own Conscious Brands 100 list, produced with Hall & Partners, UK consumers put the brand in the top ten, an impressive performance given its relative youth. 

There are, however, potential hazards ahead for Oatly as they push towards exponential scaling. Oatly’s entire image centres around being approachable and familiar. Last year, the brand sparked outrage after taking on investment from Blackstone, who has been accused of investing in deforestation of the Amazon. After the anger and threats to boycott the oat milk giant, they put out a statement saying “on multiple occasions, we’ve found ourselves stepping on the toes of both our friends and those who disagree with our mission, and now we’ve gone and done it again.” It was an astonishing 900-word defence of its work with Blackstone in order to alleviate any damage done to its green-friendly image. It exposed Oatly’s achilles heel. 

The US market, where Oatly has chosen to list, can quickly turn unforgiving and hostileif they appear to take an activist stance without following through, or taking steps which are not aligned with their “mission”. Its green credentials and commitment to social good are at the core of what has made Oatly such a strong contender in the league table of wellness brands. Especially as they scale across the US, Europe and China, it will be a delicate dance to ensure they do not dilute their core values. 

Petersson will likely need to spend a bulk of his time communicating with investors and on operations than on the brand building and creative side. Not everyone is able to make this transition smoothly. 

For now, Oatly is well placed to continue to benefit from the boom in a plant-based, healthy, sustainable diet. They have managed to carve out a distinctive personality in a sea of sameness. None of its competitors in the UK have been able to capture the same credibility and familiarity among consumers.

Their plans to expand in Britain have extended to building their very own factory, providing jobs to local areas and fulfilling climate promises by bringing the product closer to consumers. Don’t be fooled, the easy-going brand image is pulled together by huge amounts of hard work and maintaining its distinct personality as it takes hold of the global market will be a monumental task. 

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.