How Oatly Became America's Trendiest Plant Milk

It’s a problem that seems almost too satirical to write about, and it started with mumbles at coffee shops earlier this winter: Oatly, the oat-based alternative milk brand, was having a nationwide shortage, and baristas were struggling to meet customer demand.

In New York City alone, at least 460 coffee shops carry Oatly, from chains such as Joe Coffee to loftier spots like Gem, 19-year-old chef Flynn McGarry’s combination coffee shop and fine dining restaurant that opened in Manhattan in February. Oat milk is even making appearances in pop culture: In a recent interview in New York magazine, Ben Sinclair, the co-creator of High Maintenance, gets incredibly excited that his local coffee shop, Stonefruit Espresso (Bedford-Stuyvesant residents will recognize it in scenes of the second season of the HBO show) offers oat milk.

Sara Fletcher, a representative from Oatly, told MUNCHIES, “We’ve been working to ramp up production to keep up with the demand and the plan is to get that done as quickly but also responsibly as possible… We use a special process that took a long time to perfect in Sweden, so as we scale, we need to do so in a way that will let us maintain that quality-focused process.”

So, what makes Oatly so appealing? For starters, the plant-based beverage movement is a lucrative, climbing industry that, according to Data Bridge Market Research made 9.8 billion USD in 2017, and its value is projected to rise 12.4 percent between 2018 and 2025. The root of the industry’s growth is the growing consumer interest in alternatives to animal products and push for increasing sustainability within our food supply. In 2017, orders for vegan food on food delivery service Grubhub rose by 17 percent.

But Oatly seems to have gained traction outside of the vegan sphere. Rather, while many health- and eco-conscious consumers once prided themselves in swapping out dairy for almond milk or soy milk, a growing racket over the amount of water and resources required to make these “milks” has led to environmental concerns over even these plant-based products. Oat milk may not be the most “healthful” option—that is, protein-rich or low-calorie—a 100-milliliter serving of Oatly contains 6.7 grams of carbohydrates (4.1 grams of which are from sugar—and only 1 gram of protein—but it does claim to be one of the most sustainably sourced milk alternatives. According to Oatly, carbon emissions required to produce oat milk are 80 percent lower than for cow’s milk.

More importantly, customers seem to think it tastes pretty damn good. The “Barista edition” of Oatly, the grey carton of which has become synonymous with ultra-hip coffee shops as of late, contains a non-GMO vegetable oil that creates a dairy-like froth that other plant milks struggled to achieve. Oatly’s oat milk has a richer taste than almond milk due to its higher fat content, and a closer mouthfeel to cow’s milk. It touched down in the States at a time where Scandinavia’s concept of hygge (a term that roughly translates to “coziness as a lifestyle”) has become increasingly popular. The image of a warm bowl of oatmeal in the morning makes drinking Oatly feel somewhat indulgent—especially next to, say, watery almond milk.

While it may seem novel, Oatly—which is based in Malmo, Sweden—has been in business for 25 years. It debuted in the US in 2016, under a new business strategy that included 60s-inspired graphic design and quippy marketing campaigns. According to the Challenger Project, “Since the re-launch, company revenues have increased 100 percent and are on course to reach US $41 million this year.” Interestingly, Oatly’s business model was to first sell to coffee shops, as opposed to being sold straight to consumers in supermarkets and health food stores. The move proved ingenious, as baristas became ambassadors of the oat milk gospel without feeling like sales representatives to customers. And while alternative milk has been poked and prodded at as a metaphor of privilege and a stamp of gentrification, in Brooklyn, some coffee shops such as Brooklyn’s Sey Coffee and Domicile don’t charge for Oatly at all.

Brooklyn-based cafe Sey Coffee’s manager, Jaime Hodgkin, told MUNCHIES: “We carry Oatly, exclusively, as our alternative milk. The costs are generally in line with the cow’s milk we source from a cooperative upstate. It just makes sense to have a streamlined menu where all our milks are priced the same. We did have to switch to almond for one weekend when we were rationed [laughs], and we try to develop a backstock of Oatly, asking our suppliers to give us as much at once as they can.”

One might liken the rise of Oatly, to the unprecedented success of the plant-based Impossible Burger, which just closed another investment round bringing its total value to nearly $400 million. While it was preceded by hundreds of other commercial varieties of “veggie burgers,” the Impossible Burger’s mainstream crossover has put it on menus everywhere from Momofuku to White Castle, and may mark it as the first faux meat to successfully win over the minds and palates of vegans and non-vegans alike.

Whether it’s the branding or the taste, something about Oatly has similarly resonated with consumers. And whether or not the appeal of oat milk will stick, right now, it’s surely making dairy lobbyists tremble.