Simply Oatly

Oatly are fast-growing lifestyle company, whose foamable oat drink is offering a healthy alternative to the European dairy market.

Lucy Chesters spoke with Oatly's chief executive, and classic disruptor, Toni Petersson about building an ethical brand, adversity, and environmental awareness.
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12.09.16
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Oatly is a Swedish food company, founded in the 1990s. Rooted in research from Lund University, Oatly make oat-based drinks, which – through their patented enzyme technology – replicate nature’s process and transforms oats into nutritional drinks, as an alternative to the dairy market. The range includes a variety of products, including plain, foamable and chocolate oat drinks, custard, a cream and crème fraiche equivalent. In Sweden, this extends to ice cream, yoghurt and fruit flavoured natural energy drinks. Since its inception, Oatly has been gaining traction, not just in its Swedish homeland, but in many countries worldwide.

Oatly’s products are stocked in supermarkets, convenience stores and health food shops; as well as independent cafes which stock its foamable oat drink, around Europe. As a brand, they’ve managed to occupy a niche in the food industry, at once rejecting a prevailing orthodoxy concerned with efficiency whilst targeting a demographic keen on purchase experience and identity.

Oatly’s chief executive, Toni Petersson, 49, likes to do things differently. “We truly let values dictate our strategies; our business – not the other way around, and that’s what makes us different from other companies,” says Petersson. “If you look at my CV, it’s a complete mess. I’m not somebody you’d want to hire.” It’s not exactly the sort of elevator pitch you expect of an aspiring business executive, much less a successful serial entrepreneur with a host of CEO positions to his belt.

In 2014, Oatly was sued by Svensk Mjolk from the Swedish Dairy Association, for discrediting milk through its use of the lines ‘No milk, no soy, no badness’ and ‘It’s like milk, but made for humans’.  While officially Oatly lost, awareness of the consequences of the global food industry – particularly meat and milk – continue to bubble to the surface. Petersson seems unconcerned, neither deterred nor repentant. “All [politicians] want to do is get re-elected,” he says – a classic disruptor – recognising the vested interests of the food industry: “It’s a huge industry with all the lobbying organisations working with public affairs.”

His view is aimed squarely at the bigger picture. “There are really strong forces in our society, affecting our daily lives”, he says, asking, “What is our role in society? Just to disrupt it. Big food, dairy industry and all that, it’s really sad to see what’s going on right now.” Asked about his company’s focus on marketing to a younger age group than the rest of the industry, he is clear about cause and effect: “The younger generation, the millennials, they’ve inherited this shit, they’re the ones that have to live with this.”

It’s a classic little-guy-versus-big-machine position. Oatly is the ethical, environmental, clued-up company, agitating – and clearly growing fast – in a world looking increasingly into environmental concerns and their health implications. Petersson has succeeded in importing the style into the previous calm waters of the Scandinavian food industry – much to the obvious displeasure of Svensk Mjolk.

But the argument is about more than milk. Petersson is on record as saying that he wants to turn Oatly into a lifestyle company rather than merely a food manufacturer.  For Oatly, that lifestyle is about the values you hold and choices you make. Because those beliefs are mirrored in the lifestyles of its customers, that gives the brand licence to offer branded merchandise – in the form of slogan t-shirts or boomboxes – positioning itself at the cutting edge of a self-consciously healthy and socially-aware millennial generation. It’s all a far cry from the company’s origins as a chemistry research project at Lund University in the early 1990s.

The market positioning of Oatly is very much in keeping with a wholesome image of ethical business, environmental sustainability and a positive legacy for, as yet unborn generations. “We’re living in an age that’s still about ‘good for you, good for me’,” says Petersson, “now we’ve got to see a trend coming that says: ‘good for planet’; you and the younger people, it’s more about good for the planet.” It’s a laudable statement – perhaps paraphrased as “we are too individualistic in the developed world, we need more collective accountability with a focus on environmental sustainability”.

Oatly is building a brand and a product range that appeals directly to the tastes and lifestyles of the urban under thirties in Europe. This necessitates a corporate focus on ethical trading, lack of exploitation and environmental awareness. But underneath the hood, Oatly balances that millennial twist with a model that is traditional, successful and financially-capable.

When asked finally about the reaction that Oatly engenders in consumer and producer circles, Petersson is bullish: “To me, we’re all about being transparent because, as an industry, it’s not always about the good things you do, but also the bad things you do, and we rarely talk about where we want to improve – to be an open and honest company, we need to talk about both. “

“But if you look at how much criticism we get – and also fans and loyalty and love of course –  it’s because we talk about those things and we’re open about it. What is so surprising, and why big companies don’t talk about it, is because when they do, they get criticized.  Whereas the companies who don’t speak about it, they fly under the radar, and nobody cares.”

We expect Oatly to be around for many years to come.