This story is part of an editorial collaboration with ForceBrands, the leading recruiting firm for the food, beverage and beauty industries.
Editor’s note: We first met Oatly at last year’s Food Loves Tech. They served generous, fragrant oat milk cortados that actually made us want to try a new milk alternative. We’ve been ordering oat lattes every chance we get since then, keeping an eye out for the Swedish import on coffee shop menus and seemingly few and far between retail shelves.
If you’re also an Oatly fan, you’ve probably noticed that the product’s in short retail supply around the city. Until they scale up this summer, though, you just have to know where to look. We recently partnered with ForceBrands to catch up with Oatly’s general manager Mike Messersmith and learn how this plant-based milk took over the local coffee shop scene and where we can find it.
And don’t miss Oatly’s Food Loves Tech return on November 2–3 at Industry City! Save $20 off the regular ticket price while our early bird deal lasts. See Mike talk about Oatly at last year’s event on our “What’s Old Is New Again” panel in the video below.
The following interview has been edited for clarity and brevity.
What is Oatly?
Mike Messersmith: Oatly is a vegan plant-based milk made out of oats that was founded over 25 years ago in Sweden. We uniquely focus on oats and purposefully chose to work with oats because they have great nutritional qualities and are a sustainable environmentally friendly source ingredient. We were looking for a great alternative to cow’s milk that would be able to deliver balanced nutritional benefits without taxing our natural resources and the environment. Oatly has a clean ingredient label and a good blend of carbohydrates, fats, proteins and fibers.
Swedish import
FB: When did Oatly launch in the U.S.? How has it grown since then?
MM: Oatly launched across the U.S. in fall 2016 with Intelligentsia Coffee. We have grown our business with many fantastic specialty coffee partners in New York and across the nation since then as we focused initially on introducing the idea of oatmilk to consumers through fantastic lattes and cortados. We shipped our first cases to grocery stores in fall of 2017 with partners including FreshDirect and Wegmans and are now growing our retail footprint nationwide. We are always blown away when we get a great note or Instagram post from a cool coffee shop in Montana or New Mexico showcasing their progressive baristas pouring a gorgeous Oatly latte or sharing positive feedback from their customers.
FB: What does it take to break into the highly competitive [U.S.] alternative milk space? What have been some of the biggest challenges Oatly’s had when it comes to standing out in this category?
MM: It’s definitely a very competitive space. We have big categories that are still fast-growing—a mix of larger multi-national CPG companies like Danone Wave and Almond Breeze, and then you also have some really inventive, creative newer players that are just getting started with some new specialty products.
That said, we did not take that challenge lightly. Our competitors are making amazing products and are building great brands. For us, the biggest thing we think about a lot is that very few people in the U.S. have even heard of the idea of oat milk, so we needed to find a way to help people mentally cross that bridge and accept and familiarize themselves with the idea of it.
The second piece to that is that, as a new brand, the biggest barrier you encounter is figuring out how you drive trial of your product. No matter what you’re doing, it starts with an amazing product. If you only have an average product, I think it’s going to be really hard to build a great business. So that led to the way we chose to narrow our focus on where we can provide the most value. And while we were delaying some of the opportunities we may have been able to pursue even earlier, such as retail, we purposely held off to focus on building the brand and driving trials through on-premise specialty coffee because we felt that that coffee was an area where people are passionate about—they have their local established spots that offer many nondairy options. The barista community has responded exceptionally well.
Oatly ❤️ NY
FB: Speaking of great coffee, many New Yorkers can’t start their day without it—it’s already hugely popular. How does the city’s market compare to others, and are there any tips or tricks for being successful here?
MM: We started with one launch partner, which was Intelligentsia, and they’ve been amazing. It is daunting when you think about New York City coffee—and New York City overall. Where do you start?
The opportunity is so big that you feel like you either have to do it all right away or that somehow it’ll all slip away from you. We tried to stay incredibly disciplined and focused by starting small and focusing on only a handful of shops that had great cult followings in their neighborhoods that we also had good relationships with. My advice is to not get distracted by the ambition or the opportunity of how big things could be, especially at the beginning. Stay as focused as you can and really disciplined in building meaningful momentum that will create more strategic opportunities down the road.
FB: New Yorkers seem to love it so much so that there’s currently a back order for some products. Why’s it been difficult to keep up with demand? When can we expect more retail Oatly? For some products, is the best option to order off the website for now?
MM: We had really high hopes and expectations for the brand when we launched it in the U.S.—we love our products and hoped other people would, too! The level of enthusiasm and demand has exceeded our wildest expectations. Scaling quality operations with a natural foods business is one of the hardest things to do, particularly for a brand like Oatly, where we have a unique process for making our oatmilk and have really strict allergen protocols being vegan and dairy-, nut- and gluten-free. We expect to be increasing our production by more than twofold over the course of the summer, with more exciting plans to come following that. People love the product because of the quality, and our primary focus in scaling up is not to compromise that at all!
That being said, we’re rolling out new ways to buy our products. Our website is a great option, and we have several really exciting customers that are going to start carrying Oatly over the summer.
Where to find Oatly
FB: Is there a way to find which local coffee shops use Oatly? Where can I find it retail?
EM: Great question—yes! We have an “Oatfinder” on our website that you can filter by ZIP code or location. We are adding new shops every day and are in the process of bringing even more mobile optimization over the summer. In New York, we are growing our retail presence every single week. We are in many outlets already, including on shelf at Fairway and available for delivery through FreshDirect with a whole bunch more coming over the next few months.
FB: What’s ahead for Oatly? Are there any exciting product innovations on the horizon that you could share with us?
MM: Right now, we’re completely focused on our flagship oat milk in the U.S. It’s a great first way to experience the brand and the product. You can go on our website and you can see the 80+ items we make in Sweden using the same manufacturing process focused solely on oats. We have a very creative product development team in Sweden who have made everything from frozen treats, breakfast shakes and cooking creams to spreads you can put on bagels.
While we’re focused on oatmilks here in the U.S., we’re super excited about the development of the plant-based and dairy-free/alternative milk market across many categories—a market that we feel is still at the very beginning stages of growth. As far as innovation, we’re benefiting from discipline and focus, which is challenging when you have opportunities ahead of you. But we realize that people love Oatly because of the quality and the attention to detail, so we’re trying to be as ambitious as we can be while also maintaining the discipline to do what we’re doing really well.
Photos and images courtesy of Oatly.
