That's plant-based milk. But not just any milk, it's oat milk. With the rise of plant-based milks, the Swedish brand Oatly, which had been waiting in obscurity for more than 20 years, has achieved global success.
So much so that in 2018, the company even experienced a shortage leading to a bidding war for the precious nectar online. The pack of 12, which normally sells for around 50 euros, then went up to more than 200 dollars on Amazon. How did this company experience such growth?
But above all, why today is this one in bad shape when we have the impression that their milk is everywhere? Have they wasted their unique opportunity to dominate the world of plant-based milks? Creating a new need, a new habit among consumers that they have not been able to satisfy?
A look back at the rise and fall of Oatly, the oat milk empire. To fully understand Oatly, you have to go back to its roots, but especially to the roots of oat milk. Unlike other plant-based milks, oat milk was only invented very recently, in the 1990s, by a Swede.
It was Richard Oste, a researcher at Lund University, who discovered it while looking for an alternative to lactose intolerance. He subsequently created Oatly, the famous, first oat-based plant-based milk company in 1994. Everything comes in time if you know how to wait, and this is the case for the Swedish company which will not go too far.
'export for more than ten years, even if they manage to develop well on the Swedish market, rather avant-garde on the subject of lactose intolerance. Because yes, oat milk, beyond its nutritional virtues and its ability to be better digested than traditional milk, pollutes much less than cow's milk! But hey, that's not what will make it successful, almost 20 years after its invention.
In 2012, Oatly hired a new CEO, Toni Petersson, who arrived with a radical new vision for the company. [Music] More than a CEO, Toni Petersson will really give new impetus to the brand, omnipresent on social networks, he will completely overhaul the company's communication. Two years later, he will completely overhaul the entire image of the brand, with the logo that we know today but above all, to make the product international, will only use English on its packaging, promoting its export abroad.
In the process, he will unveil an environmental impact study to show that the production of oat milk was better for the environment than dairy products. At the same time, the brand took on the internet and began a large-scale marketing campaign, but above all developed a new product: Barista oat milk, designed to attract the attention of 3rd wave cafes. .
What are 3rd wave cafes? This is coffee as we experience it today, where we want to know and master everything about coffee, from its origin to its roasting, coffee becomes an experience in itself. If you're interested, I could make a video on the history of coffee, let me know in the comments!
But obviously with this new oat milk, specially intended for baristas, they hit the nail on the head. Between the taste, the texture and its ability to foam, the product will hit the mark of new Baristas, looking for the perfect vegetable milk for these new 2. 0 coffees At the end of 2016, with its new packaging and its new magical recipe, Oatly decides to attack the American market, and we can say that they are going hard.
At the time, Americans had absolutely no idea about oat milk. So, rather than entering the market in the traditional way via a distributor, Oatly decided to send salespeople from Sweden to present their products in person in high-end coffee shops in New York. Between that, and the communication operations, each more ingenious than the last, Oatly's bet will bear fruit, and the Swedish brand will completely conquer the American market.
The coffee 2. 0 market is moving much faster, and with a limited product offering, Oatly will go completely viral in the United States, so much so that in less than two years, the product will be distributed absolutely everywhere in the country. The problem?
The small Swedish company was not at all prepared for such success, especially so quickly. And the demand is so strong that the products are in short supply almost everywhere in the country. And unfortunately for Oatly, which really opened up the oat milk market, when we cannot meet demand, consumers turn to substitute products.
In 2019, the oat milk market exploded by 330% in less than a year! To meet this demand, Oatly was forced to start building new factories, particularly in the United States. Unfortunately, it did not go as planned, and between production delays and the explosion in production costs linked to the COVID crisis, the competition had time to organize itself.
These few errors will cost the Swedish brand dearly, but not right away. In May 2021, Oatly decided to do an IPO, that is to say, to go public in order to continue to support its growth, and the least we can say is that this IPO is a success! In less than 2 days, the stock went from 17 to 21 dollars, valuing the company at more than 10 billion dollars!
It must be said that the company is benefiting from a nice publicity stunt, counting among its best-known shareholders Oprah Winfrey, Jay Z and Nathalie Portman. Unfortunately, it is from there that things will go wrong for Oatly, and that the very small Swedish firm will experience a real descent into hell. Very quickly after their IPO, the firm will experience its first controversy.
Oatly will be criticized for inflating its results and practicing greenwashing. One of the brand's core values was its low impact on the environment, unfortunately, with its expansion, the company will increase the outsourced purchase of oats to meet demand, which will explode its carbon footprint. Unfortunately, the CEO, the face of the brand, who is an excellent salesman does not necessarily have the same talents on the operational side, and succeeding in supporting such growth from an organizational point of view is extremely complicated.
As if that were not enough, the alternative milk market, also affected by the post-covid period and price inflation, experienced a sharp decline between 2021 and 2022. The descent into hell for the company does not end there. don't stop there, because it found itself at the center of a health scandal and a product recall campaign during 2022, pushing it even further.
In barely two years, the Swedish brand will lose the confidence of its investors, and the stock, which shortly after its introduction was trading at almost $28, is now worth only 66 cents, reducing its valuation to just $395 million. dollar. Still, it's important to note that Oatly's decline is not irreversible.
After having introduced the world to oat milk, the brand must now face real competition with players with much greater means of production than the small Swedish brand. But it does not let itself be discouraged, and has even decided to attack the Asian market. Even if the Swedish company has not yet completely digested its meteoric expansion, it hopes to reach profitability in 2024 and has even managed to reduce its carbon footprint despite increased demand.
Because yes, the Swedish company which seeks at all costs to reconcile profit and sustainability, is perhaps not so bad at doing business after all? This is the end of this video, I hope you liked it, if so, don't hesitate to like and subscribe for more content in this style, also tell me in the comments if you had already tasted this it's not at all a product placement but it's true that personally the Barista version has that little something that the others don't have .
