Oatly

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Oatly Group AB
TypePublic
Nasdaq: OTLY
Founded1990s
Headquarters
Malmö Edit this on Wikidata
,
Sweden Edit this on Wikidata
Area served
International
ProductsDairy alternatives
Number of employees
792 (2020) Edit this on Wikidata
Websitewww.oatly.com

Oatly Group AB is a Swedish food company that produces alternatives to dairy products from oats.[1][2] Oatly was formed in the 1990s using research from Lund University.[3][4][5] Oatly has headquarters in Malmö and a production and development center in Landskrona.[6][7][8][9][10] Oatly's key markets are Sweden, Germany and the U.K., and its products were available in 60,000 retail stores and 32,200 coffee shops around the world as of 31 December 2020.[11] Oatly can also be found in 11,000 coffee and tea shops in China, and at more than 6,000 retail and specialty shops across the US, including thousands of Starbucks locations. [11]

History[]

Shelves of Oatly products
Oatly Salty Caramel Hazelnut vegan ice cream

Oatly was founded in 1993 or 1994 by food scientist Rickard Öste and his brother Bjorn Öste.[12][13] The parent company of Oatly AB is Ceba AB, which was founded by Rickard Öste, Ingegerd Sjöholm, Inger Ahlden and Lennart Lindahl together with the cereals company Skånska Lantmännen on February 17, 1994[14] [15] Oatly Group changed its name from Havre Global AB on 1 March 2021.[11]

Oatly is now part-owned by The Blackstone Group (7%), Verlinvest, China Resources, Industrifonden, Östersjöstiftelsen, and the employees.[16][17][18] The group also included celebrities such as Oprah Winfrey and Jay-Z, as well as Starbucks founder Howard Schultz.[19]

In 2020 Oatly's sale of a US$200-million stake to investors including the Blackstone Group, which has financed companies driving extensive deforestation in the Amazon, as well as driving road development into the depths of the jungle for export of foodstuffs,[20][21] angered consumers and led to a backlash against the company.[22]

The company said It had applied to be listed on the Nasdaq under the ticker symbol "OTLY".[23] Oatly Group AB OTLY which could value at more than $10 billion. [24] Morgan Stanley, J.P. Morgan and Credit Suisse are the underwriters.[25] OTLY stock was priced at $17 but had its first public trade at $22.12 on the first day. [26]

Products[]

Oatly has a range of products including: oat milk, ice cream, cold coffee, yoghurt substitutes, cooking cream, spread and custard.[27][28][29] All products are certified kosher and vegan and are non-GMO project verified.[30] All US Oatly products are certified gluten free.[30][31] However, in Europe and Asia, Oatly's products are not gluten free.[31]

Oat milk's growth is surpassing other plant-based drinks. US sales of oat milk jumped 131% over 2020, to $304 million, according to Nielsen. US sales of soy milk, rice milk and coconut milk fell over the last year, while almond milk sales rose 9%. [32]

In the US, Oatly's oat beverages, frozen desserts, and "oatgurt" are offered. Varieties of oat milk available in the US include the following: barista edition, original, chocolate, full fat, and low-fat oat milk.[33] Oatly also offers a nondairy frozen dessert, similar to an ice cream, in several flavors. Flavors available for purchase in the US include chocolate chip, mint chip, coffee, strawberry, chocolate, vanilla, oat, and salted caramel. Oatly frozen desserts are available in store only, in the United States.[33] Oatgurt, a substitute yoghurt, is made with oats and does not contain any dairy. The product contains active and live cultures.[34] Flavors of oatgurt available in the US include plain, strawberry, peach, black cherry, and mixed berry.[33]

Internationally, Oatly also offers on the go, single-serve beverages packaged in silver containers that resemble cans, but are made of recyclable paper. Varieties include chocolate oat milk, cold brew latte, organic matcha latte, and organic mocha latte.[29] Additionally, both boxed oat drink and boxed chocolate oat drink are available outside the US.[29]

Oatly says more and more consumers are trying its oat-based drinks, yogurt and ice cream a try. In the last three months, between 35% to 40% of adults in the U.S., the United Kingdom, Germany, China and Sweden purchased plant-based milk alternatives, Oatly said. [35]

The only nutritional difference between Oatly's original oat milk and barista edition oat milk is fat content. The barista edition contains a slightly higher fat content than the original version (3% versus 1.5%). The higher fat content allows the oat milk to perform better when steamed, frothed and paired with espresso for coffee drinks, hence the name "barista edition". It also makes for a richer and more pleasant flavor compliment to teas in tea lattes, and is commonly used as a milk alternative for matcha lattes. [30]

In 2018 the company was publicly criticized for supporting a local pig farm to which it sold the residue of its manufacturing process. The company said it would "re-visit the issue."[36]

Oatly took a small British firm, Glebe Farm Foods, to court, alleging it had infringed Oatly’s trademark by selling cartons of an oat-based drink called "PureOaty". In August 2021, the judge dismissed Oatly's case at London's High Court, concluding there was only a "very modest level of similarity" between the Glebe Farm branding and Oatly's.[37]

Advertising[]

Oatly advertisement on the Stockholm Metro, 2016

The Danish dairy company Arla Foods produced a series of adverts to discourage people from buying vegan alternatives to cow's milk and used a fake brand 'Pjölk' which was similar to Oatly. In response Oatly trademarked the fictitious brands Pjölk, Brölk, Sölk, and Trölk and began using them on their packaging.[3]

The Swedish dairy lobby LRF Mjölk successfully sued Oatly for using the phrase "Milk, but made for humans" for £100,000. In response to the lawsuit, Oatly published the text of the lawsuit leading to an alleged 45% increase in Oatly's sales in Sweden.[citation needed]

In 2018, Oatly spent £700,000 on advertising in the UK on All 4 and on billboards in train stations in Brixton, King's Cross, Oxford Circus, and Shoreditch using the "Milk, but made for humans" slogan banned in Sweden.[3]

Oatly Barista Edition oatmilk

In February 2021, the company advertised during Super Bowl LV. The commercial, called "Wow, No Cow", featured CEO Toni Petersson singing a jingle in an oat field. It used an ad aired in Sweden in 2014, which got banned due to a lawsuit from LRF Mjölk that sued Oatly for using the phrase "Milk, but made for humans".[38][39]

Later that month, Oatly launched their first Europe-wide advertising campaign[40][41] called "Are You Stupid?",[41][42] showing results from focus group testing,[40] showing people recognising which products do and do not contain dairy, irrespective of packaging,[40][42] and directing viewers to a petition against "Amendment 171",[42] supported by the European Dairy Association,[40][41][43] which seeks to ban non-dairy products from using "dairy-based descriptors" such as "dairy", "creamy", "yoghurt-style dessert" or "does not contain milk"[43] and could be interpreted to ban "packaging designs that call to mind dairy products, such as yoghurt pots or milk cartons"[41][43] and ban climate impact comparisons.[41][43] Campaigners — and one focus group member — argued that Amendment 171 would make it harder for the EU to meet its goal of increasing plant-based food consumption.[40][44] Amendment 171 was approved by majority vote in the European Parliament in October 2020 and went into trilogue negotiations in late January 2021.[43] On 25 May 2021 the EU withdrew Amendment 171, thus allowing plant-free dairy companies to use words like “buttery” or “creamy” to describe their products.[45]

Partnerships[]

Oatly's products are sold in partnership with Alibaba in the Chinese market.[46]

In Korea, Dongseo is in charge of domestic distribution.[47]

On 2 March 2021, Starbucks released Oatly oat milk nationwide in the U.S. to its customers after successful regional trial runs in California and the Mid-West. After positive feedback from customers and employees, oat milk joined the other alternative milks on the menu at Starbucks.[48]

Oatly plans to open the factory in the United Kingdom by 2023, breaking ground in Peterborough, England.[49] Oatly's vegan milk factory will be capable of producing 300 million litres of oat milk per year. The company notes this figure will grow to 450 million litres.[50]

Oatly partners with Yeo's for $30M Asia oat milk factory in Singapore.[51]

Outlook[]

Sales of oat milk are predicted to grow 13.4% per year over the five years 2021–2026, to reach $6.8 billion.[52]

Many companies have entered the alternative milk market. Danone, which sells its products under the brand name Dannon in the U.S., has a soy milk brand called Silk. PepsiCo sells oat milk under the Quaker Oats brand in India. Nestlé markets a pea-based milk it says is more nutritious than oat milk.[52]

On July 14, 2021, short seller Spruce Point Capital published a report questioning Oatly's management and sustainability.[53] After the announcement Oatly's stock briefly went below IPO, resulting in several class-action lawsuits.[54] Glenn Vanzura of Mayer Brown stated that it's common in other industries that after a short-seller targets a company to drive down stock price, a class action lawsuit is filed, noting that such lawsuits are often dismissed.[55]

References[]

  1. ^ "Dairy-free Oatly labels to include climate footprint figure to encourage milk swap". The Drum. Retrieved 29 December 2019.
  2. ^ "Oatly pushes coffee drinkers away from dairy with 'Ditch Milk' creative". The Drum. Retrieved 29 December 2019.
  3. ^ Jump up to: a b c Webber, Jemima (10 December 2019). "Why Sweden Is Terrified of Oat Milk". LIVEKINDLY. Retrieved 29 December 2019.
  4. ^ Goldberg, Jacob. "Sweden's 'Milk War' is getting udderly vicious". The Outline. Retrieved 29 December 2019.
  5. ^ Oat Milk Is Coming To Your Town, retrieved 3 January 2020
  6. ^ Sugar, Rachel (14 August 2019). "Oatly and the quest for the perfect alt-milk". Vox. Retrieved 29 December 2019.
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  10. ^ "Oatly ice cream: Swedish plant-milk company launches UK offering". Verdict Retail. 12 December 2019. Retrieved 29 December 2019.
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  14. ^ Lagnevik, Magnus (1 January 2003). The Dynamics of Innovation Clusters: A Study of the Food Industry. Edward Elgar Publishing. ISBN 978-1-78100-861-4.
  15. ^ "Rickard Öste — Food's Future Global". foods-future.com. Retrieved 12 April 2021.
  16. ^ Bakst, Danny. "I've tried a lot of popular oat-milk brands out there — here's why I think Oatly is the best". Business Insider. Retrieved 29 December 2019.
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  20. ^ Grim, Ryan. "A Top Financier of Trump and McConnell Is a Driving Force Behind Amazon Deforestation". The Intercept. Retrieved 27 August 2019.
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  28. ^ "Oatly's Path to Alt-Milk World Domination Starts in New Jersey". Bloomberg Businessweek. 31 July 2019. Retrieved 29 December 2019.
  29. ^ Jump up to: a b c "Products | Oatly | the Original Oat Drink Company". www.oatly.com. Retrieved 29 December 2019.
  30. ^ Jump up to: a b c "Frequently Asked Questions". OATLY!. Retrieved 22 March 2021.
  31. ^ Jump up to: a b "Frequently Asked Questions". | Oatly | the Original Oat Drink Company. Retrieved 22 March 2021.
  32. ^ www.israelhayom.com https://www.israelhayom.com/2021/05/23/oat-milk-maker-oatly-welcomed-warmly-in-wall-street-ipo/. Retrieved 23 May 2021. Missing or empty |title= (help)
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  45. ^ Barry, Sinead (28 May 2021). "Cheesed off? Controversial bill withdrawn from EU". euronews. Retrieved 8 August 2021.
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  47. ^ "㈜동서, 서울 TOP7 스페셜티 커피 브랜드와 함께 식물성 오틀리 라떼 무료 업그레이드 행사 진행" [Dongseo Co., Ltd. will host a free upgrade event for vegetable oatley latte with Seoul TOP7 Specialty Coffee Brand]. www.dailymedipharm.com (in Korean). Retrieved 23 April 2021.
  48. ^ "Oatly oatmilk coming to Starbucks nationwide in the U.S. on March 2". Starbucks Stories & News. 1 March 2021. Retrieved 22 March 2021.
  49. ^ Maxwell Rabb (15 March 2021). "Oatly Announces Plans for the World's Largest Oat Milk Factory". thebeet.com. Retrieved 12 April 2021.
  50. ^ "Oatly to Open One of the World's Biggest Vegan Milk Factories in the UK". LIVEKINDLY. 18 March 2021. Retrieved 11 April 2021.
  51. ^ Larsen, Mette (31 March 2021). "Swedish Oatly partners with Yeo's for $30M Asia oat milk factory in Singapore". ScandAsia. Retrieved 11 April 2021.
  52. ^ Jump up to: a b InvestorPlace, Contributor Dana Blankenhorn. "Oatly Stock Is Flying off the Shelves After its Initial Public Offering". www.nasdaq.com. Retrieved 23 May 2021.
  53. ^ "Wild Oats? Inside Spruce Point's 124-Page Attack Alleging Mismanagement And False Claims At Oatly". Forbes. Retrieved 21 July 2021. Spruce Point’s 124-slide presentation largely questions both management’s execution as well as the businesses’ broader sustainability claims — and even includes some documents and data uncovered through Freedom of Information Act requests. Here are the highlights.
  54. ^ Dana, Blankenhorn. "Speculation Turns to Consternation With Oatly Stock". NASDAQ. Retrieved 4 August 2021.
  55. ^ Watson, Elaine. "And now the lawsuits… Oatly hit with shareholder class actions following short seller report, such suits becoming more common, says attorney". Food Navigator. Retrieved 4 August 2021.
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