Dive Brief:
- Oatly aims to reignite demand for plant-based milk in the U.S. with a new “playbook” that will put the company on track for its first year of profitability as a public company, CEO Jean-Christophe Flatin told investors on its earnings call.
- The company reported growth in Europe and China, attributed in part to expansions in foodservice and aggressive marketing campaigns designed to increase its relevance to consumers. Oatly plans to execute a similar strategy in North America, where performance has lagged, beginning in the second half of 2025.
- Oatly’s growth plans come as the company sees its best financial quarter since its IPO in 2021. The company said it hopes to reach Gen Z by driving further into coffee and playing up trends such as health and sustainability.
Dive Insight:
Finding initial success amid the plant-based milk boom in the late 2010s, Sweden-based Oatly has since struggled to get out of the red since going public four years ago amid a category cooldown. With a growing presence outside of the U.S., the company is making an effort to return to increased sales stateside.
The oat milk maker’s growth in Europe and China was offset by declines in its North America operations, with a 10.6% drop in revenue in the continent compared to the first quarter of 2024, according to its earnings report. Its volumes grew 9.2% globally but dropped 10.9% in North America.
Flatin said its U.S. and Canada operations are facing sluggish demand for its milks and dessert products, but said the company has not yet “fully deployed resources to ignite positive momentum,” which it plans to do in the second half of 2025.
Tenets of the plan include boosting the relevance of Oatly by increasing the availability of its products across channels, and pushing back against “barriers to conversion,” including internet misinformation about the health of its products.
One area the company plans to double down on is coffee, particularly among the growing cohort of Gen Z consumers drinking iced lattes and cold brew. Oat milk is the most popular non-dairy creamer option at coffeeshops, with 33% of all coffee orders containing the beverage, according to data from sales platform Square, reported by Daily Coffee News last fall.
Oatly pointed to its Barista Edition espresso collaboration with Nespresso that it rolled out in cafes in the first quarter of the year as a successful endeavor in the coffee space.
“There is a taste bonanza and a flavor bonanza going on in coffee around the world, and our teams are intimately woven into this community,” Daniel Ordoñez, Oatly’s chief operating officer, told investors on the earnings call.
The focus on coffee and other categories comes as Oatly looks to get more consumers to try oat milk. Flatin said 82% of U.S. consumers have not tried oat milk, and that Oatly is “uniquely placed to serve the new wave of coffee and beverages.”
“That’s our new obsession,” Flatin said. “It will not happen overnight, but [we’re] really looking forward to report[ing] progress.”
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