Rise in oat-based milk sales following dairy lobby’s lawsuit

Signal of change / Rise in oat-based milk sales following dairy lobby’s lawsuit

By Gillian Phair / 20 May 2015

A lawsuit against an oat-based ‘milk’ producer, filed by a dairy conglomerate, has resulted in sales-boosting publicity for the brand concerned. 

In October 2014, the Swedish dairy conglomerate LRF Mjölk filed a lawsuit against oat based-‘milk’ producer Oatly for marketing tactics which lambast milk. 

Oatly’s slogans include “designed for humans”, “Wow no cow!” and “No milk. No soy. No badness.” 

Its website states: “The idea behind Oatly was to find a way to make a nutritious alternative to milk without going through the body of a cow. Today that sounds really smart. But back when we started in the early 1990’s most people though we were crazy. That’s okay, everything has is time. Who is the crazy one now?”

LRF Mjölk, whose combined sales are 200 times greater than those of Oatly, claimed that this negative marketing information gave milk a bad name. 

What has now emerged, with some irony, is a boost in Oatly’s sales thanks to the publicity the legal case attracted. Oatly’s CEO, Toni Petersson, notes that the controversy has made people more aware and supportive of its products, which has increased their European and Asian sales by 37%, and by 45% in Sweden. All of which is going to provide Oatly with a $41 million profit in 2015.

Oatly is now pushing post-milk as a cultural and lifestyle phenomenon, with an online store selling T-shirts with messages such as “We are the post-milk generation”. 

Image caption: Are we the post-milk generation?
Image credit: Oatly Apparel

So what?

Europe and North America are seeing a rise of non-dairy products against their dairy counterparts, and the range of non-dairy options now available has broadened the target audience.  

Oatly and the like benefit from pervasive discourse about consumer choices, influenced by growing awareness of the nutritional qualities, environmental impact and societal implications of comparable products. 

This lawsuit demonstrates that alternatives, though relative newcomers on the milk market, are causing mainstream dairy producers concern for their future. Will milk move from mainstream to the margins? What will be the impact on cattle farmers?   

Increasingly, non-dairy alternatives are also competing with each other. So, while Oatly mostly speaks out against milk, it also markets itself as a better alternative to soy, raising questions about responsible land use for this growing sector. 

Will the debate move beyond individual crop wars to explore diversified systems? How great a role will urban farming play?

Sources

Oatly (2015) The Oatly way

Bloomberg (2015, May 5) Oatly Riles Big Dairy

What might the implications of this be? What related signals of change have you seen?

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