British people are renowned for their ability to talk (and complain) about the weather. However, the weather in 2020 is worth talking about because reports claim that rising temperatures caused by climate change will cause more deaths than all infectious diseases.
Experts agree that if we act now, we can help to reduce the impact of climate change. One of the easiest ways to do this is by reducing our carbon footprint through dietary changes. According to the Committee on Climate Change, a shift towards a more plant-based diet would help people to reduce their dietary emissions by 35%. This has seen a rise in the number of people embracing plant-based foods with the number of vegans quadrupling between 2014 and 2019 in the UK.
Walking into your local coffee shop, you may have noticed that you can get a range of alternative ‘milks’ to accompany your coffee. From coconut, almond, hazelnut, and oat milk, the variety marks a desire from consumers to move away from traditional dairy, one of the largest contributors to greenhouse emissions.
What has brought about this relatively sudden shift in mindset? I believe that brands like Oatly have helped raise awareness of the positive impact of making small lifestyle changes. They were one of the first brands that clearly displayed the climate footprint of their products on their packaging, and they encouraged the food industry to be more transparent and ‘show people their numbers.’
In 2018 Oatly increased its turnover by 65%. They sold over 71 million litres of oat drink worldwide, which resulted in a 56,471 ton reduction in greenhouse gas emissions. Without context, these figures can be hard to gauge, but Oatly says that this saving corresponds to 28,335 round-trip flights between their base in Malmö and New York. This year, they were valued at $2bn after they sold a stake of their company to a group of high profile investors, including Oprah.
What is the secret to their success? I believe that it’s primarily due to their marketing strategy. I’m not just referring to their great advertising campaigns, but the whole marketing mix. As a Brand or Marketing Manager, each part of the marketing mix must be carefully considered. Using the 7p framework developed by E. Jerome McCarthy in the 1960s, we can break down different elements that make Oatly the 2nd most innovative company in the world when it comes to branding.
Oatly develop, produce, market, and sell oat-based products which they say ‘make it easy for people to eat better and live healthier lives without recklessly taxing the planet’s resources in the process.’
In the U.K. the cost of a litre of chilled Oatly is £1.80, whereas a litre of milk is 48p. The higher price is one that many people are willing to pay to help the environment. As Oatly sells its stock to stores, it is ultimately the retail trade that determines the price, but they aim to price their product at the same level as other high-quality plant-based drinks.
This is where I feel that Oatly really come into their own. Many people would assume that they are a relatively new company, but they were founded 26 years ago. For two decades, they were a pretty nondescript brand that resembled a dutch multinational, far from the Oatly that we know today. Everything changed when they hired Toni Petersson as their new CEO in 2012, who then hired John Schoolcraft to be Oatly’s new creative director. Schoolcraft had worked with Petersson before and was apprehensive at first, explaining in an interview with The Challenger Project that he initially wanted to take the oats out of the mix, but when he learnt more about Oatly’s vision, he was converted…
“What I soon realised was, that although the brand was invisible, everything inside the pack was fantastic, and so the oats actually ended up becoming key to everything. I then started working in stealth, so just working with Toni on how we might turn this into what we called a lifestyle brand — not necessarily like a Red Bull, or Nike but a brand that would fit very naturally into people’s lives.”
By adopting a challenger mindset Toni and John transformed the brand. Their new bold, brash, and unapologetically political packaging gained people’s attention. Not everyone loved Oatly. When one unhappy customer remarked that ‘It tastes like shit! Blah!’ Oatly put the quote on their packaging and promoted it online which certainly got them noticed…
Tates like shit:
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“This tastes like shit! Plant-based drinks don’t taste anything like cow’s milk,” is a real comment by a real person. “Plant-based drinks don’t taste like cow’s milk because they aren’t cow’s milk,” if you stop to think about it for more than a second, would be the simple and highly logical response. Because if you have been drinking cow’s milk all your life and think of its taste as a starting point or the standard, and also expect other drinks to taste exactly the same, then oat drink (for example) may seem rather unpleasant (or no, let’s say “unusual” instead). On the other hand, if you ask someone who only drinks oat drink how they think cow’s milk tastes, he or she will probably say “unpleasant” or we mean, “unusual.” Of course.
To successfully market your product, you need to ensure that it is in the right place. To ensure that Oatly was in ‘the right place’ Petersson took an innovative approach to break into the U.S. market. He developed a strategy to get Oatly stocked in 10 high-end coffee shops. This helped them achieve a cult status. As the popularity of Oatly grew, the demand soon outstripped supply in 2018 with Sky news reporting oat milk shortages. This was one of the reasons why Oatly was named the 9th most innovative company in the world by Fast Company.
There is so much to talk about when it comes to ‘process.’ From harvesting the oats, turning the oats into Oatly and then transporting their products from their factory in Sweden to your local supermarket.
Farming: In 2018, 90% of Oatly oats were grown in Sweden using conventional and organic farming methods. They’re currently involved with several research projects regarding sustainable production and consumption and have financed a research study on sustainable farming conducted by the Swedish University of Agricultural Sciences.
Turning oats into Oatly: 25 years ago, Oatly’s founder, Rickard Oste developed a manufacturing process that enabled him to turn oats into a milk alternative without losing its fiber. This process has been patented and helps to set them apart from their competitors.
Transportation: Oatly’s goal is to deliver products that have maximum nutritional value and minimal environmental impact. Initially, they focused on what they believed they could directly influence, but as they’ve grown, so has their ambition…
“When we were small we said, ‘Let’s influence what we can influence. Let’s just start with our factory and try to communicate in a way that allows us to create social change.’ But now we have opportunities to go further back in the process—to look at farming, for example, and taking ownership of the entire chain.” Petersson, Sustainability Report, 2018
With transport representing a quarter of their total climate footprint, Oatly has partnered with electric truck manufacturer Einride to transport their products in Sweden, which will reduce their greenhouse gas emissions by 87%.
Oatly supply their products to retailers and coffee shops, and while they don’t have any of their own physical stores, there are several ways that consumers can interact with their brand, which include but are not limited to:
Online channels: Oatly has over 14.5 followers on Twitter and 13k followers on Instagram. Their social channels rarely simply promote their products. Instead, they share content to make people smile. They also use their social platform to raise awareness of food sustainability and environmental concerns. Establishing an open dialogue with consumers is important for brands that don’t have physical stores, which is why in 2018, their communications department responded to more than 13,000 emails.
Oat Academy: In 2018, Oatly organised 22 workshops with 1,400 chefs to discuss sustainable meal preparation, climate and health.
At festivals and events: You’ll often find an Oatly pop-up at festivals like the London Coffee festival, where they collaborate with other brands like the coffee supplier, Old Spike.
“What would we be without our employees? Nothing. And we’re not just saying that because our employees will probably read this page. Because we know our success and development is entirely dependent on dedicated and knowledgeable employees who are thriving in their jobs.” 2018 Sustainability Report
To gauge if Oatly’s employees feel committed to their mission and sustainability, they created an index called “Committed Coworkers.” Every year they ask their coworkers if they believe that:
- Oatly should have high ambitions for its sustainability work.
- Know how they contribute to sustainability, in their roles and in their daily work.
- They are developing their commitment to sustainability at Oatly.
In 2018 86% of staff at Oatly were Committed Coworkers.
Oatly has also partnered with a social enterprise called Be – Change to offer “climate impact diets” to help staff to reduce their carbon footprint. As a result, 53% of participants felt that their quality of life had increased.
Oatly’s 2018 Sustainability Report
The CEO Magazine – We’re unconventional: Toni Petersson
The challenger project – An interview with John Schoolcraft, the Creative Director of Oatly
Forbes – Carbon Labels Are Finally Coming To The Food And Beverage Industry
Fast company – How Swedish oat milk exploded into a $15 million business last year