Latest / Building Brands with Fexingo: Identity, Reputation, and Long-Term Business Equity / How Oatly Made Sustainability a Brand Asset Not a Slogan
Transcript
- Lucas: If you walked into any coffee shop in 2018 and asked for oat milk, the barista probably looked at you like you had two heads. Fast forward to 2026, and oat milk is in maybe sixty percent of US coffee shops. The brand that made that happen — Oatly — is a masterclass in turning sustainability from a buzzword into a real brand asset. Luna: And they did it with a tone of voice that would make most corporate lawyers absolutely furious. I remember when they ran that ad during the Super Bowl or whatever with the CEO singing — it was so weird, and everyone talked about it. Lucas: Right. That was 2021, and it cost them about a hundred thousand dollars for a thirty-second spot that looked like it was shot on someone's phone. But that's the thing with Oatly — they've always been willing to look a little ridiculous if it means people remember them. Luna: So where do you want to start? The product itself is just oats and water and a little oil. It's not exactly proprietary technology. The magic is all in the brand. Lucas: Exactly. And I think the most interesting place to start is how they thought about transparency. Most food companies have a sustainability page buried somewhere on their website with a lot of vague promises. Oatly put their carbon footprint numbers on every single carton. On the side of the package, you can see exactly how many kilograms of CO2 were emitted to produce that carton. Luna: That's incredibly bold because if you're wrong or if your numbers get challenged, it's right there in the consumer's hand. It's not hidden in a PDF. Lucas: And they did get challenged. In 2022, a British advertising regulator ruled that some of their carbon claims were misleading. Oatly had to pull some ads. But here's the thing — the average consumer probably didn't even hear about that. What they did hear was that Oatly was serious enough about the environment to put numbers on the package. That willingness to be specific is rare. Luna: Let's talk about the tone of voice, because that's what really set them apart. They called their milk 'the milk that's made for humans, not for baby cows.' That's a direct shot at the dairy industry, and it's funny. Lucas: They also had that 'Wow No Cow' campaign. And the dairy industry sued them. In Sweden, the dairy lobby actually took them to court over the word 'milk.' Oatly lost that case and had to change their packaging in some markets. But the lawsuit itself became free advertising. Every news article about 'Oatly can't call it milk' just made more people curious. Luna: It's the Streisand effect in action. The more you try to suppress something, the more attention it gets. Oatly's legal team probably hated it, but the brand team loved it. Lucas: Exactly. And that leads to another key decision: they chose to partner with coffee shops rather than compete with them. Instead of trying to sell directly to consumers through grocery stores and hoping people would switch, they went to baristas. They gave them training, free samples, branded equipment. If you ordered a latte at a trendy cafe in 2019, the barista would ask, 'oat or dairy?' That's not an accident. Luna: That's a classic B2B2C strategy. You win the business customer first, and they sell your product to the end consumer. But it only works if your product actually performs well in coffee. Oatly's barista edition was engineered to foam and not split in hot coffee, which a lot of other plant milks couldn't do. Lucas: Right. There's a real product advantage. But then they went a step further: they licensed their brand to coffee shops. Starbucks, for example, doesn't just sell Oatly — they sell the 'Oatly Latte.' Oatly's name is on the menu. That's incredibly unusual. Most ingredient brands stay in the background. Oatly demanded to be front and center. Luna: And that created a halo effect. Once you saw Oatly at Starbucks, it felt like a real brand, not just some niche health food thing. Suddenly it was everywhere. Lucas: Let's look at the numbers. Oatly was founded in the 1990s by a Swedish food scientist named Rickard Öste. For years it was a small regional brand. But around 2016, they brought in a new CEO, Toni Petersson, who completely overhauled the brand. By 2020, Oatly's revenue was about 420 million dollars. In 2021, they went public at a valuation that briefly hit ten billion dollars. It's come down since then, but the brand equity they built in that five-year window is extraordinary. Luna: And they did it with very little traditional advertising. It was all PR, social media, and those coffee shop partnerships. They spent maybe ten percent of what a typical food brand would spend on marketing. Lucas: There's a lesson there about focus. Oatly didn't try to be all things to all people. They went after a specific audience — urban, educated, environmentally conscious millennials and Gen Z — and they spoke to them in a language that audience loved. If you're not in that audience, the ads probably seem annoying. But that's fine. You don't need everyone. Luna: It's polarizing by design. And that's risky. But when it works, you get fanatical loyalty. People don't just buy Oatly; they evangelize for it. Lucas: So what's the takeaway for someone building a brand today? I think it's this: don't be afraid to take a stand. Oatly's entire brand is built on the idea that dairy is bad for the planet and oat milk is better. That's an opinion. It's not neutral. But in a world where consumers are overwhelmed with choices, an opinion helps them decide. Luna: And be specific. Don't say 'we're sustainable.' Say 'this carton created point-two-nine kilograms of CO2.' Specificity builds trust because it feels like you have nothing to hide. Lucas: Exactly. And that's a good note to end on, actually. We talk a lot on this show about brands that win through clever marketing or distribution hacks. Oatly is different. They won by being honest — or at least, by being convincingly honest. And that honesty became their moat. Luna: If these conversations have moved your work forward in any small way, you can support the show and keep it ad-free at buy me a coffee dot com slash fexingo. It's a small gesture that means a lot to us. Lucas: Yeah, we really appreciate that. And it keeps us independent, so we can keep diving into brands like Oatly without any outside pressure. So thanks for listening.