According to one recent study, plant-based foods are now available in about 53% of households in the United States. Roughly 35% of Americans say that they've consumed some type of plant-based food in the last year, and of that number, 90% say that would happily do so in the future. All told, searches on engines like Google for plant-based recipes are up an incredible 85% year-over-year - pointing to a trend that shows absolutely no signs of slowing down anytime soon.
Statistics like these help highlight why Oatly - a company that bills itself as "the original oat milk company" - is so popular right now. But as an organization specializing in non-dairy beverages, it's safe to say that they were hardly an overnight success. Over 25 years ago, Oatly was little more than a niche startup specialized in alternatives to milk, ice cream, yogurt, cooking creams, and similar types of products. A few decades and one deal with Starbucks later and Oatly has transformed into a company with a $10 billion IPO.
See Relax Tax’s Debt Guide at relaxtax.com/debt
Oatly: The Story So Far
Oat milk in general began life in the early 1990s after being developed by Rickard Oste, a food scientist and Lund University. He developed it after extensive research on the topics of lactose intolerance and sustainable food systems.
Oatly bills itself as "the world's original and largest oat drink company," and when you consider the amount of success that it's had over the years, it's certainly hard to argue with that sentiment. Since 1994, they've exclusively focused on developing first-class expertise around all things oats. Oats are a global power crop with inherent properties suited for both sustainability and human health and, sensing the way things were shifting towards organizations with a more environmentally-friendly slant, it's clear that this decision was a good one.
But when the product originally launched, it "languished" according to Oste. "Nobody wanted it," he was quoted as saying in an interview with The New Yorker.
Still, he persisted. And it's a good thing that he did.
Oatly is headquartered in Sweden. As a brand, its products are available in more than 20 different countries around the world. But it was a focus towards the United States that began to take hold nearly a decade ago that truly cemented the position it enjoys today.
See this related post from Dennis Harabin: The Success Story of Wordle: A Powerful Lesson for Entrepreneurs?
Few things have captured the attention of so many people in recent memory like the word-based game Wordle. It's one part crossword, one part Sudoku — players have to guess the word of the day through equal parts strategy and luck. Based on their guesses, colored tiles tell players when letters are in the correct position or if they're included in the word at all. The goal is to guess the daily word in as few attempts as possible.
In an effort to get its products in front of as many people as possible, Oatly started with those who could advocate for them: baristas. In 2021, Oatly CEO Toni Petersson sent cases of a special "barista-edition" product to the trendiest coffee shops he could find in many major American cities.
To say that this effort gave way to a success story is, at this point, a little bit of an understatement. Almost immediately, Oatly found what would become its first major launch partner in the region: Intelligentsia Coffee. But even expanding beyond that, Oatly became an almost constant presence in barista-made foamed espresso drinks around the country. As soon as those drinks became popular enough with consumers, suddenly everyone wanted oat milk in their own homes - which is exactly when their grasp on the market began to take hold.
Flash forward just a few years to 2018 and Oatly products were found in more than 1,000 different coffee shops. But at the same time, the company debuted its products in grocery store chains like Wegmans and ShopRite. It was regularly achieving $110 million in sales and by just a year later, Oatly's products were available to purchase in 2,500 grocery stores, too.
Of course, none of this is to say that Oatly hasn't faced challenges over the years - because it certainly has. After becoming the "number two milk alternative in all of Europe", Oatly first debuted in New York City in 2016. Within six months, the entire city was out of stock - that's right, you literally couldn't get oat milk in all of Manhattan. At the time, customers were beside themselves. They didn't like the fact that something that caught on so quickly could fade away just as fast. The company couldn't keep up with demand and had to adjust its supply chain efforts to empower its rapid expansion around the world.
Still, Oatly's general manager Mike Messersmith had a theory that periodic shortages were actually what made up a big part of the company's charm. He indicated in an interview with The New Yorker that every time the product became scarce, demand would only get higher. People weren't giving up on the product - they were becoming more loyal to it. Likewise, the oat milk process is nothing if not specific. You really do have to strike that perfect balance between "speed" and "quality" and trust the process. But that's exactly what consumers expect - and that's precisely what Oatly is trying to give them.
In the end, Oatly is nothing if not a shining example of an entrepreneur success story for a few reasons. For starters, it began life as a company that may very well be the example of "the right product at the wrong time." In 1994, the priority for sustainable living was nothing like it is now. But still, Oatly persevered and waited for the marketplace to catch up to its concept. Once it did, their success was overwhelming - and it seems poised to continue to be that way for years to come.
You may have heard about Rivian recently because they just rolled off their first production electric truck. That in and of itself is notable — but the success it has already enjoyed is equally so. Experts from Motor Trend have dubbed it "one of the most remarkable vehicles" they had ever test drove. All told, it's the product of ten years of hard work finally coming to fruition — and entrepreneur R.J. Scaringe has been a big, big part of that up to this point.
If you have questions or concerns, please contact our office at 551-249-1040 for assistance.
Dennis Harabin at Relax Tax is an expert in taxes, insurance, and debt. Contact him today!
- The Effective Strategies to Make a Business Sustainable
- Funding Small and Medium-Sized Business: How it Works
- The Art of Running a Successful Family Business: Breaking Things Down
- Blogging Ideas to Grow Your Business
- Let's Talk About Business Financing