How did oatmeal drinks change the planet? This company wants to redefine “milk”
A company focused on the production of oat milk hit an IPO.
On April 19, US Eastern Time, the Swedish brand Oatly formally submitted a prospectus to the US Securities and Exchange Commission (SEC) for a public listing on the Nasdaq. The prospectus shows that Oatly's underwriters include Morgan Stanley, Credit Suisse, BNP Paribas, Barclays and many other institutions, and the lineup is very luxurious.
Due to the particularity of Oatly starting with oat milk, this IPO has attracted much attention from the outside world. In February of this year, relevant news about Oatly's impact on the IPO has been frequently exposed. Last summer, they even got investment support from private equity groups Blackstone Group and Oprah Winfrey, and rapper Jay Z. According to the "Wall Street Journal" report, after obtaining that investment, the company's valuation has reached 2 billion US dollars.
▲ Picture from unsplash
In fact, this brand, which seems to be far away from Chinese consumers, has been interspersed in our lives long before the bells and news flew.
Relying on its oat milk products, how did the plant-based company Oatly get to the position of IPO step by step? Is its launch an impact on traditional milk? After experiencing milk and other plant-based milks, will oat milk give consumers new imaginations about future beverages?
"Our intention is real"
Why is Oatly special?
Although this year, the Swedish company took an important step towards the capital market, the history of Oatly can be traced back to the 1990s.
Oatly is not complicated. This plant-based product company was founded on the basis of a research conducted by Deron University in 1990, when Swedish food scientist Rickard Öste and his brother Bjorn Öste used enzyme technology to make oats into "oat milk."
In layman's terms, this oat-based drink is not a mixture of "oats + milk". It is a drink made from oats with a texture and taste similar to milk. Therefore, in a strict sense, the drink now called "oat milk" is not real milk.
▲ Picture from unsplash
In 1994, Oatly was established on the premise of possessing this technology.
Theoretically speaking, until new value is discovered, Oatly's own value may only be a substitute for animal dairy products. The direct benefit of this patent is that it can provide a new category of dairy products for people with lactose intolerance, but it is also limited to this.
In addition, the global food consumption pattern has not matured for more than ten years after Oatly was founded. Oatly brand marketing has also been out of place. For a long time, Oatly has been regarded as a niche consumer brand and has been tepid in the market.
Until 2012, when the new CEO Toni Petersson took office, Oatly began to rebrand.
What makes people talk about it is Oatly's marketing. Peterson decided to associate Oatly with environmentalism or vegetarianism. The reason is simple: Oatly uses oat base to make oat milk, and growing raw oats consumes less greenhouse gas emissions, energy consumption and land resources than raising cattle.
According to a study by the University of Oxford, the greenhouse gas emissions of the same amount of plant milk are 1/3 of that of animal milk.
This simple logic quickly added social value to Oatly.
▲ Picture from unsplash
Oatly, which has social value, has undergone a core change. Its consumer population is no longer a fixed lactose intolerant, even if the proportion of lactose intolerant is already large. But now, Oatly's consumer base has been expanded to include environmentalists and vegetarians.
It is obvious that after the new century, the social enthusiasm of environmentalists and vegetarians is huge.
Take the UK as an example. According to a survey conducted by the British Vegan Association, the number of vegan dieters in the UK in 2006 was only 150,000, and in 2016 this number had reached 540,000. A festival was also established earlier. On November 1, 1994, World Vegan Day was established.
Whether for reducing carbon emissions or protecting animal welfare, more and more people are called to join the ranks of vegetarians and environmentalists. To achieve the goal by changing consumer behavior is what these people can do with low cost and high benefit. According to a consumer lifestyle survey conducted by Euromonitor in 2019, it was found that nearly 50% of non-vegetarians in the world reduce their intake of animal dairy products.
▲ Picture from unsplash
In this context, Oatly's way of conveying value is radical.
In 2019, Oatly applied for the registration of the slogan "It's like milk but made for humans". To a certain extent, this slogan implies a complete confrontation with traditional animal dairy products.
In addition, Oatly also proposed the concept of "Post milk generation". This company redefines its own consumer groups and directly proposes the future development direction of dairy products. Similar to those lifestyle brands, Oatly wants to make the simple consumption behavior of buying oat milk into a lifestyle that supports environmental protection and maintains a healthy lifestyle.
Objectively speaking, as environmentalism and vegetarianism are becoming more and more popular today, especially in the European and American markets, the benefits of this rhetoric for Oatly are huge. Until this time Oatly launched an impact IPO, its prospectus also stated that "Gen Z and millennials will become the main generations of the world in the future, bringing a series of new values and expectations to the market."
▲ Picture from unsplash
According to a report by Tastewise in December 2020, “everything based on plants” will become one of the top ten trends in the United States.
Oatly soon circled a large number of its own fans and began to become a compass for "future milk" from a niche brand.
Under Oatly's official website, there is a column titled "What makes Oatly Oatly, not just another company". In it, Oatly declared to everyone:
"We are not a perfect company, or even an intimate company. But our intentions are true. We want to be judged for the good things we do, not just the beautiful words we say. Our goal is to always provide Products with maximum nutritional value and minimum environmental impact."
"Tall, blond, beautiful, hard to come by, very free, without any attachment or sense of responsibility. I'm sorry to let you down, it's not us." Oatly also said.
▲ Picture from Oatly official website
Oat milk burst into the coffee shop
Frankly speaking, even if you are not a vegetarian, or even if you do not agree with environmentalism, Oatly's propaganda is exciting.
Oatly's image is like a person with a sense of social responsibility and practical work. Compared with the Internet celebrity products that we have been accustomed to, Oatly seems to be more worthy of making people nod for it. Because even if the brand is changing the production method for profit, changes to the living environment have already taken place.
More importantly, Oatly's success actually goes far beyond brand marketing. Anyone who has ever drunk oatmeal latte knows it.
As a beverage, taste and nutrition are destined to be the core competitiveness. For consumers of oat milk, its direct benefit is that it can provide an alternative to animal milk products for people with lactose intolerance.
▲ Picture from unsplash
This consumer market is brought about by the attributes of oat milk itself. During infancy, the lactase in the human body can break down the substances in milk. As adults, the lactase will become less and less, and some people who lack the gene that can produce sufficient lactase will become lactose intolerant. Trying foods or drinks with animal dairy products can cause symptoms such as diarrhea. This is undoubtedly painful.
The emergence of oat milk is a good substitute for milk. Statistics show that about 70% of adults in the world lack lactase. In China, this figure is even as high as 90%. And if you only look at it intuitively, at the moment, the nutritional value of milk is not even enough to compare with the low-fat, low-sugar and high-fiber of oats. This is a good choice for consumers.
When Oatly began to mention nutritional value, the market it could open up was vast.
In terms of taste, Oatly is also impeccable. Compared with traditional animal dairy products, vegetable milk does not have the fishy smell of milk, and liquid oats will not taste as strong or sweet as milk. Compared with other plant milks-like almond milk or soy milk, it tastes more like milk, silky, and does not coagulate. Oat milk is a more balanced drink.
▲ Picture from unsplash
But how will oat milk be seen by consumers and gain an advantage in the market? Brand marketing alone may not be enough.
Just like the "rural surrounding the city," Oatly chose to break through from the coffee shop. Oatly's CEO Peterson once opened a coffee shop, and he knows the degree to which milk and coffee are related.
In 2017, Peterson's cooperation with Internet celebrity coffee shops such as Intelligentsia and La Colombe officially entered the US market. In addition, Peterson asked the barista to jointly develop a "barista version" of liquid oatmeal products for baristas, linking Oatly with coffee more closely.
Peterson can make coffee shops willingly introduce Oatly oat milk, on the one hand because Oatly tastes really good. "Rrfinery29", which pays attention to food trends, interviewed a number of local coffee shop staff and owners in the United States in a report in 2018. Most people tend to choose oat milk instead of milk and other plant milks to make coffee milk foam.
A barista said in the report:
It tastes better! You can definitely taste almond milk in a drink, and sometimes the taste is unbearable. Oat milk is more neutral.
On the other hand, the Oatly brand is closely integrated with the barista. "Curiosity Daily" once had contact with Peterson. He told "Curiosity Daily" that many Oatly employees themselves come from the barista community, and everyone knows and knows baristas and respects them. at Hong Kong. Almost everyone on the Oatly team has a background in the coffee industry.
"Community operation makes it easy for Oatly to talk about cooperation with cafes," the "Curiosity Daily" summarized.
When a coffee shop starts to use Oatly, another coffee shop may be recommended to use Oatly. In this way, Oatly quickly spread from the shelf to the coffee shop.
▲ Picture from unsplash
As of December 31, 2020, Oatly has more than 7,500 retail stores and coffee shops in the United States. After its success in the European and American markets, Oatly will look to the Chinese market where the wave of specialty coffee is surging.
In 2018, Oatly officially entered the Chinese mainland. At first, it cooperated with Ole, a boutique supermarket under China Resources, but found that Chinese consumers have low awareness of this brand. So, as in the past, they began to promote Oatly to various specialty coffee shops. At least in China, this group of people who consume specialty coffee and Oatly's consumer portraits partially overlap.
Oatly has formulated a "three focus" strategy, namely one product, one city, and one market. The product is "BARISTA Coffee Master Oatmeal Drink". The city chose to start from Shanghai, a representative city of specialty coffee culture. The market refers to small third-generation boutique cafes. The response to this strategy has been very good. At the end of 2018, Oatly had settled in more than 1,000 specialty coffee shops in mainland China. Among them, Pacific Coffee and Starbucks Coffee were all discussed by Oatly for cooperation and promotion.
▲ Picture from @星巴克中国
Oatly uses coffee to make Chinese consumers truly aware of it. The "Oatly Latte" that can be drunk in major coffee brands today is Oatly's masterpiece in China.
In addition, Oatly also plans to complete the construction of its first Asian factory this year, which means that capacity expansion has reached the Asian market. This factory is expected to produce 70 million oat-based beverages each year. In the prospectus for the impact of the IPO, Oatly expressed its intention to open a factory in Ma'anshan, Anhui.
In the future, the Chinese consumer market will be the key target of Oatly's attack.
There is no doubt that Oatly has transformed from a niche brand into a brand with brand charm and capital. It is reported that after the successful IPO of this shock, Oatly's valuation may reach tens of billions of dollars.
▲ Picture from @OATLY Oh Mai Li
Can disputes create the future?
A fact that cannot be ignored is that Oatly, a Swedish company, is taking risks while creating the future.
If the consumption pattern of traditional dairy products is a bunker, then Oatly's aggressive brand marketing is dynamite.
As Oatly's slogan said, "Like milk, but made for humans", this copy caused a lot of controversy after its launch. In 2014, Oatly was sued by the Swedish Dairy Association for this radical slogan. The Swedish Dairy Association believes that Oatly’s text is very suggestive, as if it is telling consumers that milk is not healthy, and devalues animal dairy products.
Although this seems more like a protest out of interest rather than value, it does show that Oatly's aggressive propaganda will incur risks.
As a result, Oatly lost the lawsuit and was ruled by the court that Oatly's products in Sweden should not be called "milk". In the prospectus for this IPO, Oatly told the outside world, "This decision has resulted in us being banned from further using a variety of promotional copywriting in Sweden to promote our products, and the liquidated damages for each promotional copy is 2 million Swedish kronor."
Controversies caused by promotion and marketing are not uncommon in Oatly.
▲ Oatly's advertisement
This year, Oatly brought an advertising video that was banned in Sweden in 2014 to the US "Spring Festival Gala" Super Bowl. In the video, Oatly CEO Tony Peterson plays the piano in a vast wheat field and sings repeatedly: "it's like milk, but made for humans" and "wow, no cow" "(Wow, no cows).
This advertisement is 60 seconds long, but the picture is just Peterson singing repeatedly monotonously. You know, the advertising space of the Super Bowl is expensive, and Oatly took a low-cost, and some dull or even stupid video to complete the brand expression is annoying to the audience.
To give an improper analogy, this incident is like a brainwashing advertisement that you often see in elevators in an advertisement that is inserted between the Spring Festival Gala: repeating a sentence and repeating a dance move.
▲ Tony Peterson
However, although the advertising controversy is huge, the discussion of Oatly has also increased. A youtube user commented in the comment section of the ad video of "Wow no cow":
They make an advertisement so bad that they let others write articles, find, and talk about their brand for them. Any publicity is good publicity, friends.
Fortunately, the benefits of these disputes are not so precise, and they may not be able to hit Oatly at the sales level. The fatal thing is the vacillation of Oatly's core values.
In 2018, some consumers questioned how Oatly handles oat residue. The plant-based company responded that the company sold the residue to a local pig farm. This caused dissatisfaction among the vegetarians who originally supported Oatly.
Does this mean that the company that advocates vegetarianism is actually supporting the animal husbandry industry indirectly? Is its sustainable development just a lie?
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Perhaps Oatly himself has no answer. The best option to eliminate waste is to step into this cycle.
As a plant-based company, in July last year, Oatly sold $200 million in shares, including Black Stone Group, former Starbucks CEO Howard Schultz, and Natalie Porter. Supported by Natalie Portman and rapper Jay Z. It is worth noting that there are related reports that related companies of the Blackstone Group are promoting the deforestation of the Amazon rainforest. This completely angered environmentalists and vegetarians.
The chairman of Blackstone Group Stephen Schwarzman (Stephen Schwarzman) is an important supporter of former US President Donald Trump. He once donated US$3 million to Trump to support Trump's re-election.
▲ Picture from unslplash
Oatly said on Twitter that the cooperation with the Blackstone Group may be an "unexpected choice" but "helps expand our mission of sustainable development." This is obviously untenable.
Oatly hopes to rely on "ism" to drive business, but "ism" has already been countered. Can Oatly, which has its own controversial attributes, still "liberate the cows" and transform future dairy consumption?
At present, Oatly's weakness in nutritional value has been revealed. Compared with normal milk, the nutrient content of oat milk is not much different from that of milk, and oat milk, which is essential for milk protein and milk fat, is missing.
Commercially, Oatly faces the burden of marketing and operating costs. Due to the importance of the brand to the category, Oatly had a net loss of US$60.4 million last year. The attribution included market investment, production and brand awareness. Among them, Oatly's sales expense ratio was 69.3%. In the process of market expansion, learning to reduce marketing costs while maintaining competition in unique categories will be an important issue that Oatly needs to face.
▲Image from @OATLY Oh Mai Li
In addition, the emergence of new technologies also put pressure on Oatly. Entrepreneurs are using modified bovine DNA to produce animal-free milk and dairy products. Maybe one day in the future, Oatly will be replaced by better quality drinks.
More importantly, this track is now full of ambitious competitors. In 2019, several large companies such as Nestlé, Danone and Pepsi also launched plant-based drinks, and their products are also oat milk. In 2020, the first product of the domestic oat milk brand Mai Ouye appeared, and it was deliberately referred to as "Oatly substitute" in marketing. In addition, Vitasoy, Daily Box, Ogilvy Planet, etc. Brands are looking to the quasi-vegetable protein track. In the future, Oatly will have to face challenges to maintain its position in the industry.
▲ The picture comes from the official Weibo of @ Wheat Ouye Oat Milk
But what needs to be admitted is that Oatly, as an emerging consumer brand, has brought a futuristic category and consumption method. Even now, its face is still a bit vague, a bit complicated, and a bit disguised. The image about the cornfield is no longer autumn from now on. Its romance is related to the survival of human beings, and it includes the goodwill of sustainable development that is conveyed through commercial or humanistic means.
Will the cow be liberated by Oatly one day?
A Swedish company that hit an IPO may have liberated consumers' stereotypes about dairy products.
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