The brand Oatly has conquered the world in a relatively short amount of time; last year, the company's revenue increased by 52.6%. Although the favourable market conditions have contributed to this success to some degree - after all, 'regular' milk is not particularly good for the environment - this growth is primarily the result of the transformation from a product-driven brand into a lifestyle brand.
To understand the marketing success of the Swedish oat milk brand Oatly, we have to look back to 2012. At the time, Oatly's current creative director, John Schoolcraft, got a call from his friend Toni Petersson who just had been hired as the new CEO of Oatly (that had acquired a small market share as an alternative to cow's milk). There are quite a few lactose-intolerant people in the world for whom oat milk can be an excellent alternative. That's all well and good, but it's no way to build a brand.
At Oatly, they had decided to do things differently. That was when Peterson contacted Schoolcraft to ask him to join his company. Petersson showed Schoolcraft a few extremely ugly packaging samples, which made John very reluctant to take the job. Then he came up with an idea... The goal was to be 'fucking fearless' in its communication. So the first job for Toni and John was to launch a new marketing strategy. In their first YouTube video (later used as tv-commercial) for example, CEO Petersson was shown singing a song he had written himself ("It's like milk, but made for humans, wow... no cow") in an oat field. And Oatly took out full-page ads to publish the legal charges from the powerful cow's milk lobby. The slogan "It's like milk but made for humans" was seen on every billboard you can imagine and the company's revenue quickly rose from €20 million to €200-400 million - and beyond.
He thought: what if I were to get rid of the marketing department entirely? That would create a whole lot of room to have some fun. At a convention: "After all, they are always ruining my work. Toni liked the idea. All of a sudden, creative people stood at the helm of a food company. We no longer had to hold tedious briefings; instead, we could simply dictate how we wanted things to be done. We came up with something and immediately went to work on the execution." Another benefit of doing things this way was that they no longer had to talk about support, as is often the case with campaigns; instead, they could immediately move on to the idea and the execution. That is how Oatly ended up only creating the things they liked, such as the unique design and the milk packaging with the critical remarks people posted on social media. They got rid of all their KPIs and other targets and focused almost entirely on creation.
Become a voice
Another benefit of this novel approach is that it gave Oatly the opportunity to voice its opinion. Schoolcraft: "And do you know what that does? It humanises you. That is why we tell our story on our packaging, even when things go wrong from time to time. We wanted to become a voice and simply said whatever we wanted to say." Besides, it seemed the company could get away with anything. When a major milk manufacturer came up with different fake names for plant-based milk in its commercials, Oatly was quick to trademark all those names and add them to its packaging. It is every marketer's dream: the sky was the limit. On the bottom of their sour cream packaging, the company printed personal ads or sold 300 old editions of National Geographic magazine.
Peter Wennström, founder of The Healthy Marketing Team, an international branding agency specialising in food & health, was brought in to help with the repositioning of Oatly in 2012.. Part of the repositioning work involved profiling the new CEO. "Before that time, the company had an excellent CEO of a food business, but what we needed was the CEO of a brand. We told our recruiters not to bother presenting ordinary industry people to us. At the time, Oatly was a company where the product came first; it was all about the oat milk and why it was so good. The people working there were focused on the science. We advised them to go back to the founder's purpose: changing the world! They had to embrace that ambition to change the world, which meant going all-in in terms of design, brand and management. My key message to the owners and the board was: You're not in the business of oat milk – you're in the business of change." Schoolcraft's story should therefore not come as a complete surprise; it made perfect sense for the brand to rebel. It is the right strategy for an organisation that wants to upset the status quo in so many ways and where the rebellion comes from the founders purpose.''
Cool coffee shops
"We also realised that this ambition and the product really spoke to Generation Z and Millennials," Wennström says. "Oatly had to connect to them and set about conquering the market via the baristas at the countless cool coffee shops." The brand philosophy formed the foundation and the management followed suit and the key innovation to win was the Barista milk. "We could hand over a brand positioning blueprint to Toni Petersson and the rest is history.Toni became visible and John came up with everything, and they hired Sweden's best ad agency at the time, Forsman and Bodenfors... It all happened very quickly because the brands basic principle was so clear."
Coming to America
The focus on GenZ and Millennials, the uniquely meta approach to advertising and the unconventional product design all came together in Oatly's launch in the US. One coffee shop at a time, the baristas were persuaded to use Oatly. They loved the Barista product because it produces excellent foam. In 2021, the old commercial with the singing CEO was dusted off and shown during the Super Bowl.
Let's go back to the design for a moment. Tahir Idouri, creative director at Millford, has a thing or two to say about it: "In terms of design, they did things so differently that almost anyone is tempted to try their products. They really established a new code, which makes it that much more interesting." Idouri explains that Millford does a lot of work for FMCG companies. "Our work is often based on the codes of the market, which state that semi-skimmed milk should be associated with the colour blue, for example. Although those codes can be useful, they can also be restrictive at times. They can make it difficult to really stand out. Brands such as Oatly and Tony's Chocolonely are not afraid to take risks, which sometimes pay off."
One thing that stands out to him is the Swedish brand's honesty. "Other brands tend to focus on the artisanal nature and origin of their products. They tell the stories of the farmers behind the product. That is nice, but not always credible. At Oatly, they are not afraid to admit that not everything is going well yet, they are paving the way toward a better world and have quite a ways to go before they get there. People really get that."Idouri does think it will become increasingly difficult for Oatly to remain honest as the company continues to grow. The company has gone public and is now partly owned by a Chinese corporation. "It gets tricky when you start writing handbooks about your beliefs. That is why Lush shut down its social media accounts. It will be a challenge."
The company appears to be doing fine so far. These days, the unconventional Oatly earns $643.2 million in revenue and operates in twenty countries around the world - all by thinking like a brand instead of a product:Oatly wants to change the world. That's a great idea, but Peter Wennström knows the future holds a major challenge. "Oatly is still a challenger brand at the moment, a rebellious small-time player who is rocking the boat by doing things differently. As the company begins to function more and more like a corporate, they will have to find a way to hold on to that quality."