The Rebrand That Saved Oatly...
Before Oatly became the well known brand it is today, they struggled for 20 years. When their new CEO, Tony Peterson stepped in, his marketing strategy made Oatly one of the top milk brands...
Happy New Week,
As surprising as it sounds, Oatly wasn’t always a popular milk brand. Before becoming the $10 Billion Oatmilk brand they are today, they struggled for 20 years. In 1994, a company started by two brothers from Sweden created a perfect lactose-free milk alternative, oat milk, but they were unable to make a splash in the market. They were competing with other plant-based options, including soy within a small market (15% of the dairy).
Oatly began with a belief in oats as a nutritional alternative to dairy. Rickard Oste, a food-science professor, figured out a way to liquefy oats into milk while still retaining their fiber. Oatly’s team saw the potential in their product to target people with a dairy sensitivity, vegans, or anyone who simply didn’t want cow's milk. Their branding was very weak and didn’t catch enough eyes of the Swedish audience. The then creative director of Oatly John Schoolcraft said.
“It looked like a Dutch multinational, just indistinguishable from anything else on the shelves.”
It wasn't until 2012 when Oatly got a new CEO, Tony Peterson, who completely transformed the company and took the company in a completely different direction. With the help of the creative director Schoolcraft, they were able to rebrand Oatly into a challenger brand. They also rebranded Oatly’s packaging to something more human, humorous, and environmentally friendly, which was very attractive to consumers. They were finally able to differentiate themselves from every other dairy/ non dairy product on the shelves.
Following their rebrand, the product gained popularity in Europe and became a staple in US coffee houses. Its singular focus on one plant-based ingredient helped the company take off in the dairy alternative market. Instead of selling milk, they decided to sell a “sustainable lifestyle”. They felt that their potential customers in the US are willing to pay more to avoid dairy, but their potential customers were unaware of how much they would prefer oat milk over the other alternatives, so to make the potential customers aware they decided to target the baristas.
They created the “Barista Blend”, which has 3% more fat content making it extra creamy and perfect for an espresso and coffee. Baristas loved it because they were able to make cool designs on their cappuccinos with this thicker alternative. It also gave the same experience as foaming whole milk so baristas agreed to promote it to curious customers. Securing the baristas was a great route to bringing the product to the US market.
Oatly making their brand more human, more aesthetically pleasing, and making the perfect product for baristas worked wonders for them. In 2020, it made $424M in revenue, and in 2021, it went public and raised $1.4 billion, at a valuation of $10 billion. With consumers becoming more health conscious, dairy alternatives are now the popular thing and Oatly is one of the top brands to consider, though I’m more of an Almond milk guy.