BUSINESS
19sweet liquid that’s the main ingredient in all Oatly
products—on a monthly basis, according to the
company. (It won’t disclose total volume.)
Since the factory’s opening, stories of $200
12-packs selling on Amazon have subsided. Many
Americans can now pick up a half-gallon at the
corner grocery store. And though Oatly encour-
aged coffee shops to stock rival brands during the
shortage—better to keep training customers to order
oat milk, it smartly figured—it’s now available in
about 7,000 cafes and grocery stores nationally.
Retail sales of oat milk in the U.S. have risen to
$29 million, up from $4.4 million in 2017. Several
companies are going after a piece of the market.
PepsiCo Inc.’s Quaker Oats launched an oat drink
in January, and plant-based-beverage maker Califia
Farms introduced a variety in February. Even so,
Oatly is the brand sought out by many hipsters and
coffee snobs from coast to coast. “We knew that
we would do well,” Chief Executive Officer Toni
Petersson says of Oatly’s move into the U.S. in 2017.
“But we weren’t quite prepared for this level.”
Its popularity echoes other plant-based prod-
ucts’ journey into the mainstream, with diners, even
meat-eating ones, increasingly asking for Beyond
Meat or Impossible Foods patties by name. Rising
demand has forced these companies to quickly fig-
ure out how to mass-manufacture products made
with ingredients that often aren’t widely available.
Oatly employs the same proprietary, “very hard
to copy” process in the 25,000-square-foot New
Jersey factory that it does in Landskrona, Sweden—
it won’t share many details, since it’s proprietary.
“The process is very sensitive,” says Anca Gavris,
the Millville plant manager and its first employee.
“Everything needs to be to perfection.”
The oats used to make the milks—there are full-
fat, low-fat, and chocolate versions as well as a
barista variant—are sourced from farms in Canada.
Oatly makes just the oat base in Millville; it part-
ners with other facilities to turn the base into var-
ious products.
The company plans to open another U.S. facil-
ity, in Ogden, Utah, to serve customers on the West
Coast, in the first quarter of 2020. It will have three
times the capacity of Millville, Petersson says. “Will
that be enough to meet demand?” he asks. “No.”
Oatly’s sales were about $110 million in 2018, up
from $68 million a year earlier, Petersson says. He
expects double that, about $230 million, for 2019.
The company’s success is closely tied to its mar-
keting. Petersson embarked on a rebranding cam-
paign after he joined the company in 2012. At the
time, Oatly wasn’t attracting mainstream attention.
It had no presence in the U.S.—the products were
relegated to shelves filled with foods for people
with allergies. That changed when Petersson hired
a friend, John Schoolcraft, as creative director, to
help with the campaign. Schoolcraft had worked
with other iconic Scandinavian companies, includ-
ing Ikea and Carlsberg.
A series of ads were launched in Sweden, pok-
ing fun at the dairy industry with slogans like “Wow
no cow” and “Like milk, but made for humans.”
They got the attention of the Swedish dairy indus-
try, which sued Oatly for suggesting that cow’s
milk wasn’t made for humans. In November 2015
a court in Stockholm issued a verdict, prohibiting
Oatly from suggesting outright or even implying
that dairy milk is harmful in any way and limiting
what the company can call its products. In Sweden,
Oatly can’t call the beverage milk.
The company recently rolled out a new prod-
uct to New York bodegas, as well as Wegmans
stores and FreshDirect—an “ice cr— nondairy fro-
zen dessert,” says Oatly U.S. general manager Mike
Messersmith, quickly correcting himself.
A U.S. ad campaign includes posters on high-traf-
fic, low-cost surfaces—like the fronts and backs of
New York buses, transit stops, and train platforms—
with self-deprecating slogans such as “You actu-
ally read this? Total success.” Messersmith says
the “irreverent introduction” was timed to coincide
with the company’s increased production capacity,
as a way to raise brand awareness without prose-
lytizing. “We wanted people to notice and be like,
‘Huh.’”—Deena Shanker and Niclas RolanderTHE BOTTOM LINE Sweden’s Oatly, whose oat milk has the
coffee-mad hipster seal of approval, has almost single-handedly
created a booming alternative milk category. Testing product
samples○ Oatly’s estimated
2019 sales$230m