Latest / Building Brands with Fexingo: Identity, Reputation, and Long-Term Business Equity / How Oatly Built a Brand on Provocative Transparency
Transcript
- Lucas: So there's this brand that decided the best way to sell oat milk was to insult the entire dairy industry, mock its own investors, and publish its own carbon footprint for everyone to see. And somehow it worked — for a while. I'm talking about Oatly. Luna: Oatly — the brand that made me feel guilty for ordering a latte with regular milk. They're the ones who put 'It's like milk but made for humans' on their cartons, right? Lucas: Exactly that. And that line, which sounds almost like a dare, sums up their whole approach. They didn't try to be friendly or inclusive. They picked a fight. And that's what we're digging into today — how a company built a powerful brand on being provocative and transparent to the point of self-deprecation. Luna: And before we go deeper, I have to say — for me, this show is like that. It doesn't try to please everyone. It just tells you how real brands actually work. That's why it's ad-free and listener-supported. If you get something out of these conversations, you can support us at buy me a coffee dot com slash fexingo. Lucas: Yeah, that's a good parallel. It's not for everyone. But for the people who click with it, it's genuinely useful. And that's exactly the kind of relationship Oatly built with its customers. Luna: So how did they get to that point? Oatly wasn't always the edgy hipster brand. It started in Sweden in the nineties as a pretty niche alternative for lactose-intolerant folks. Lucas: Right. The company was founded in the 1990s by a Swedish scientist who basically invented a way to make oat milk that actually tasted decent. For almost twenty years, it was a sleepy health-food brand. Then in 2012, a new CEO came in — Toni Petersson — and he completely rewired the brand. Luna: What was his big insight? Because I remember all of a sudden Oatly was everywhere, but with this weird, self-aware tone that felt unlike any other food brand. Lucas: Petersson's insight was that nobody gets excited about a healthy alternative. They get excited about a cause. So he positioned Oatly as a crusade against the dairy industry — not just a product, but a movement. And he made the brand voice sound like a person who's a bit too smart for the room, who's in on the joke. Luna: That's where that 'made for humans' line comes from. It's basically saying dairy milk is for baby cows. A little arrogant, but it gets your attention. Lucas: Exactly. And they leaned into that arrogance across everything. Their cartons became mini manifestos. They ran ads with the CEO singing a song called 'Wow No Cow' in a field. They printed their carbon emissions on the packages — not as a PR stunt, but as a challenge to the dairy industry to do the same. Luna: Wait, they actually printed their carbon footprint? That's bold. Most companies hide their emissions numbers. Lucas: They did. The number was about one point nine kilograms of carbon dioxide equivalent per liter, which is roughly a third of dairy milk's footprint. But the key move was that they put it right there on the package, in plain sight. It was like a dare: 'We have nothing to hide. Do you?' Luna: That's a brilliant trust play. But it's also a huge risk. What if you're not actually as green as you claim? Lucas: And that's exactly where things get complicated. Oatly's transparency had a blind spot. They positioned themselves as the eco-warrior, but their production process still uses resources, and they were backed by big investors, including some you wouldn't expect. In 2020, they took a massive investment from a group led by Blackstone — a firm with heavy fossil-fuel exposure. And that created a wave of criticism. Luna: So the brand that preached purity got tangled in the very system it claimed to be fighting. How did they respond? Because I feel like most companies would go quiet and hope it blows over. Lucas: They did the opposite. They basically said, 'Yeah, we're not perfect, and we'll use these resources to help the transition faster.' It was a very Oatly way to handle it — not defensive, but self-aware. And it actually worked with their core audience, because it felt more honest than pretending to be saints. Luna: But that begs the question — how does that approach play in the public markets? Because Oatly went public in 2021, and I remember the IPO was a circus. Lucas: Oh, it was a circus. They published a prospectus that was unlike anything Wall Street had seen. It had sections like 'We are the original oat-milk company' and 'Our brand is everything.' They even included a warning that their marketing might not resonate with everyone — basically admitting they might be too weird for the mainstream. Luna: That is so on-brand. But did investors laugh all the way to the bank, or did it backfire? Lucas: Both, actually. The stock popped on day one, and the company raised over a billion dollars at a valuation that implied incredible growth. But then reality set in. Competition from cheaper oat milks, production issues, and slowing growth hit them hard. By twenty twenty-six, the stock was trading far below its IPO price. Luna: So the brand was strong, but the business had cracks. Do you think that's because the provocative style doesn't survive contact with quarterly earnings? Lucas: I think it's more nuanced. The provocative style can survive, but it has to evolve. Oatly's early ads were genuinely disruptive. But as they scaled, they had to sell in big grocery chains, work with food service partners, and keep investors happy. That's a different muscle. And some of their later campaigns felt a bit formulaic — still edgy, but not as fresh. Luna: So the edginess wore off. But I wonder — was the transparency actually a core brand asset, or did it eventually become a liability? Because when your whole brand is about being transparent, any stumble is amplified. Lucas: That's a great point. When you build your brand on honesty, you create a very high bar. Oatly has been scrutinized for its sustainability claims, its investor ties, and even its packaging. Every criticism feels like a betrayal of the brand promise. That's the double-edged sword of radical transparency. Luna: But still, they created a whole category. Before Oatly, oat milk was a niche product. Now it's a staple in every coffee shop. Do they get credit for that? Lucas: Absolutely. They built the market. And they did it not by being the cheapest or the most convenient, but by giving people a story to tell. People didn't just buy oat milk — they bought into an idea. That's the power of brand building at its best. And it's why, even if Oatly stumbles, their playbook will be studied for years. Luna: So what can a founder learn from Oatly without copying the exact style? Because not every brand can be the snarky rebel. Lucas: I'd say the core lesson is: pick a point of view and commit to it. Oatly wasn't trying to please everyone. They knew who they were for, and they made it easy for those people to feel like they were part of something. You can be that with a warm, friendly brand too. The key is consistency and conviction. Luna: And what about the transparency piece? Is there a way to be transparent without being provocative? Lucas: Sure. You can share your supply chain, your pricing, your failures — but in a way that builds trust rather than starting fights. The point isn't to be aggressive. It's to be honest in a way that makes customers feel respected. That's what Oatly did early on, and it's what many brands still struggle with. Luna: So maybe the takeaway is that authenticity isn't about being loud or controversial — it's about being genuinely aligned with your values, even if that means admitting you're not perfect. Lucas: Exactly. And Oatly showed that when you do that consistently, you can build a brand that people feel personally invested in. That's rare, and it's why we talk about them a decade later. The question is whether they can keep that edge while scaling — and that's a challenge many founder-led brands face. Luna: Well, and for us, the challenge is to keep this show sharp without becoming stale. I think we're doing okay. Lucas: I'd say we're doing more than okay. But that's for the listeners to decide. And if you're listening, you can let us know on our community page — we're not on social media, but we read every message that comes through the website.