How staying ahead of coffee trends and a unified sales strategy led to Oatly’s dominance in the plant-based milk category

Over the last decade, oat milk has emerged as the preferred non-dairy option for many, whether it’s because of dietary restrictions, allergies, or just liking the taste. According to Custom Market Insights, the oat milk market was valued at $2.5 billion in 2022 and is expected to hit nearly $6.1 billion by 2032.

Swedish brand Oatly, the first to bring oat milk to market, can be credited with increasing the plant-based milk’s popularity in Europe and the US.

Oatly originated in 1994 in Malmö, Sweden, by Rickard and Björn Öste, two brothers looking for a tasty plant-based dairy option. According to Helge Weitz, Oatly’s president of North America, it was a relatively niche, health-focused brand in its early days, targeting lactose intolerant customers mainly in Nordic countries. In 2012, Oatly brought in former CEO Toni Petersson, who expanded the brand into other markets like the US and helped catapult its popularity.

“He completely changed the strategy from a small niche brand to a lifestyle brand and expanded to multiple regions, continents, and markets,” Weitz said. “That was the moment when the crazy ride started.”

Unified sales strategy

Spearheaded by current CEO Jean-Christophe Flatin, Oatly’s revenue structure involves many aspects of its C-suite. The company does not have a CRO, rather sales are funneled through many leading executives.

“It’s not about one, two, or three people that make all the decisions,” Weitz said. “We more or less try to build an organization, especially also in North America, where a lot of people are in charge, where we build teams of experts so that not only one or two [people] make all the decisions. It’s about having the right experts at the right places and then coming together with the right people to make the best possible decisions.”

Oatly’s EVP and executive creative director, Michael Lee, explained that when Oatly was in its expansion phase over 10 years ago, Petersson structured his leadership team so that various functions were intertwined with revenue generation—something that’s still upheld today.

“What you’ll find at Oatly, which is a bit different than other [fast-moving consumer goods] companies, is that the brand is embedded in each of the commercial departments,” Lee said. “We’re very much involved in food service, very much involved with retail, very much involved in PR and comms as well as innovation. When you do that, everybody is telling the same story. The story told of the retail partners is similar to the one told to the food service partners, is similar to the one that we’re telling on social media. When everything clicks and works, that’s when we tend to see growth happen.”

But first, coffee

Specialty coffee is a central component of Oatly’s sales, and growth, strategy. Oatly has an internal team of baristas who stay in tune with coffee trends and test out various recipes, which helps the brand expand its relationships with coffee chains, food services, and other vendors.

“We started to hire these barista market developers who would spend time with baristas who would spend time with mixologists who understood all the trends that were happening on the streets,” Lee said. “We armed our food service people with that knowledge, so when they go in and talk to the quick-serve restaurants—the McDonald’s, the Burger Kings—they come in with this authority, this credibility of knowing what’s happening in drinks, which changes the conversation a bit with our commercial partners.”

Understanding the beverages landscape has helped Oatly stay ahead. The brand was arguably ahead of the cold foam craze thanks to Oatly’s foamy texture and has expanded into flavored creamers like caramel and vanilla. In Europe, Oatly has even expanded into matcha with its own premade version and plans on bringing the product to the US soon.

“We come in as a strategic partner, not just the supplier of oat milk, and then we layer our brand on top of that,” Lee continued. “We become part of the marketing ecosystem, so the partnership becomes much more robust than if we just gave [coffee shops] pallets of oat milk.”

International growth

Given its Nordic roots, Oatly has remained successful in the European market since its launch. Third quarter earnings showed an increase of $13.4 million in European and international revenue, or 12.2%, to $123.3 million, compared to $109.9 million in the previous year. Overall revenues reached $222.8 million, a 7.1% increase compared to the previous year, with a constant currency revenue increase of 3.8%.

Oatly hasn’t yet achieved equal success in the US, but Weitz and Lee see opportunities for growth. North American sales dropped $7 million, or 10.1%, to $62.1 million, compared to $69.1 million in the previous year.

“When it comes to strategy, they’re very similar between Europe and North America,” Weitz said. “Europe might be one step ahead because of the European origins. For us, it’s about creating the modern concept for coffee and beverage consumption, and of course, being relevant for Gen Z, but not only [them].”

Weitz and Lee reiterated the changing beverage trends and how Oatly plans to appeal to them with new launches, social media initiatives, and marketing.

“[Gen Z] is not drinking flat whites anymore. It’s all matcha, it’s all colorful, it’s all dirty sodas, it’s textures, it’s foams, and everything is cold.” Lee said. “Drinks have become identity through customization in a way that is never before, so we’re seeing this massive shift in how coffee and drinks are being consumed, and all of it is being amplified on social media. We see this as a massive growth opportunity for us.”