Oatly brand strategy / positioning case study

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Oatly Brand Strategy Analysis
Oatly
ABOUT

Category:
FMCG Fooddairy & alternatives, desserts & ice creams

Owner of the brand:
Chobani

Key competitors:
Chobani, Danone, Yoplait, Fage

Brand essence

Maximum nutritional value and minimal environmental impact.

Brand values

Sustainability, health, nourishment, taste.

Brand character

Swedish, provocative, bold, eccentric, quirky, witty.

Dominating archetype
EVIDENCE
Comments
1

Oatly is a Swedish brand of oat-based dairy alternatives. The Oatly formula was developed by Rickard Öste, a professor at the University of Lund. In the early 1990s, Öste instigated a project with a group of fellow scientists whose main objective was to create the world’s best milk alternative[1]. A few years later, his brother Björn joined as an investor and the story of Oatly began.
Despite its current positioning, from the very beginning Oatly was the outcome of advanced science. Thanks to its patented enzyme technology, Oatly resembles cow’s milk in terms of both taste and consistency[2].

2

Oatly was officially launched in 1994, but it wasn’t until the 2010s that it started gaining global popularity. According to most business analysts, the single most important factors in Oatly’s growing renown were two new appointments in 2012: that of Toni Petersson as CEO and John Schoolcraft as creative director. Peterson’s strategy of making Oatly a mainstream proposition and Schoolcraft’s approach to building a distinctive brand have been bold and unconventional. Peterson summarised their approach to doing business as follows: “We truly let values dictate our strategies; our business – not the other way around, and that’s what makes us different from other companies[3].

3

In order to increase Oatly’s consumption (first in Sweden, later in other countries), Peterson and Schoolcraft developed a strategy which positioned animal dairy (and cow’s milk in particular) as an unhealthy and environmentally irresponsible choice. Rather than embrace the coexistence of dairy products alongside dairy alternatives (which might have been considered a safer approach), Oatly decided to take a different route and initiated the so-called Milk War. In its communications, rather than presenting its products’ benefits, Oatly has focused on building an unfavourable perception of animal milk (e.g., “No milk, no soy, no badness”), ridiculing it to the point of insinuating that it is not fit for human consumption. This strategy led to a lawsuit from the Swedish dairy lobby and in 2015, the judgement went against the brand. As a result, its “It’s like milk but made for humans” slogan cannot be used in Sweden (although it is still used in other countries). Yet, a side effect of the lawsuit has been to further increase recognition of the Oatly brand and sales of its products.

4

Oatly’s management has been especially praised for the brand’s launch strategy in the US. Instead of first building its distribution in grocery stores (as many brands would have done), the brand launched its expansion in 2016 from selected independent coffee shops focusing on those roasting their own beans[4]. The company chose this approach because it knew its oat milk to be superior to other milk alternatives at the functional level (taste, consistency, nutritional values) and highly compatible with coffee. Therefore, its assumption was that if people were going to try Oatly for the first time, it should be with the best quality coffee. John Schoolcraft, Oatly creative director said: “If you’re going to get people to try oat milk for the first time, you want to make sure that first trial is the best possible situation.[5] In an elaborate operation, Oatly approached each of the selected coffee shops in turn with the offer of free samples of its oat milk, believing that the product would speak for itself. This strategy proved to work well. Through word-of-mouth communications the brand has managed to build a loyal following among baristas and coffee shop patrons, all the while gradually building recognition with more mainstream purchasers. At one point in 2018, demand for Oatly in the US was so high that the company ran out of its product.

5

Oatly is a pro-health and pro-environment lifestyle brand (“We exist to make it easy for people to eat better and live healthier lives without recklessly taxing the planet’s resources in the process.[6]) that communicates in a way that is untypical of brands with strong sustainability credentials. It doesn’t place too much emphasis on explaining the benefits of its products, nor does it build associations with nature, purity and wellbeing. Oatly focuses primarily on challenging the entire category of animal diary and does so in a quirky and provocative manner. Some examples of Oatly’s “eccentric” tone of voice include the inclusion of a quote from a dissatisfied consumer on the brand’s packaging: “This tastes like shit! Blah!” and the brand’s tweet: “Look! It’s 60 seconds of stupidness featuring an EU proposal that contradicts climate goals and basic common sense, brought to you by friends of the European milk lobby. Or skip the show and just sign the petition (…)”[7].

6

Ouatly’s brand equity is built on the Outlaw archetype. It is a typical rebel brand, pitching itself against the entire category of animal dairy and using a bold and provocative tone of voice to get its message across.

Tagline
Most important campaigns

1. “Help Dad” (2021, UK)

2. “Packaging | Stop AM 171” (2021)

3. “Skate” (2019)

4. “Wow No Cow” (2017)

5. “Hey Barista” (2016)

Official brand statement:

We exist to make it easy for people to eat better and live healthier lives without recklessly taxing the planet’s resources in the process.[8]

We are the company that made the first oat drink. Our goal is always to deliver products that have maximum nutritional value and minimal environmental impact.[9]

Interesting facts:

John Schoolcraft, Oatly creative director, named Oatly’s in-house creative department: “The Oatly Department of Mind Control”.[10]

Must-reads

1. Campaign on the “Are You Stupid? campaign
E. McGonagle, “Oatly Takes On European Parliament With ‘Are You Stupid?’ Campaign”, Campaign, Feb 2021,
https://www.campaignlive.co.uk/article/oatly-takes-european-parliament-are-stupid-campaign/1707401

2. Marketing Week on Oatly’s “consistently inconsistent” marketing strategy
C. Rogers, “Why Oatly Ensures Its Marketing Strategy Is ‘Consistently Inconsistent’”, Marketing Week, Jan 2021,
https://www.marketingweek.com/oatly-marketing-strategy-advertising/

3. Adweek on Oatly’s strategy in the US
R. Klara, “Oatly Used Many Strategies To Succeed In The U.S., But A Marketing Department Wasn’t One of Them”, Adweek, Jun 2019,
https://www.adweek.com/brand-marketing/oatly-used-many-strategies-to-succeed-in-the-u-s-but-a-marketing-department-wasnt-one-of-them/

Sources:
References:
  1. “From Sweden To The U.S. Meet The Man Who Is Changing The Game.”, Healthy Marketing Team, 2019, https://www.thehmt.com/gcbrand/
  2. R. Klara, “Oatly Used Many Strategies To Succeed In The U.S., But A Marketing Department Wasn’t One of Them”, Adweek, Jun 2019,https://www.adweek.com/brand-marketing/oatly-used-many-strategies-to-succeed-in-the-u-s-but-a-marketing-department-wasnt-one-of-them/
  3. “Simply Oatly”, Ethos Magazine, Dec 2016, https://ethos-magazine.com/2016/12/simply-oatly/
  4. R. Klara, “Oatly Used Many Strategies To Succeed In The U.S., But A Marketing Department Wasn’t One of Them”, Adweek, Jun 2019,https://www.adweek.com/brand-marketing/oatly-used-many-strategies-to-succeed-in-the-u-s-but-a-marketing-department-wasnt-one-of-them/
  5. Ibid.
  6. https://www.instagram.com/oatly/?hl=en-gb
  7. Oatly, Twitter, Jan 2021, https://twitter.com/oatly/status/1352243367162376195
  8. https://www.instagram.com/oatly/?hl=en-gb
  9. https://twitter.com/oatly
  10. “The Oatly Department Of Mind Control”, Contagious, Feb 2020, https://www.contagious.com/io/article/oatly-department-mind-control
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