Oatly, the Swedish oat milk brand, is now valued at over $2 billion dollars after multiple well-publicised oat milk shortages in the United States. However, its brand setup, launch strategy, and tactics are worth studying as a brilliant challenger brand case study.
Lose The Silos
First, the Creative Officer, John Schoolcraft, insisted on dismantling the marketing department, instead embedding a creative team in all departmental meetings, from marketing, to sales, innovation, product development, and production. With that, it reduced bureaucracy and increased speed of getting things done.
Reframe Setbacks As Opportunities
Second, it built a David and Goliath story. The Swedish dairy lobby (200 times their size, sales-wise), sued Oatly for their use of the slogan “It’s like milk, but made for humans”, saying it made regular milk look old-fashioned. Oatly didn’t roll over. Instead, they published the lawsuit online and took out full-page ads telling everyone that the milk lobby had to resort to being bullies. This underdog tale catapulted them into fame, despite them losing the case.
Distribution Is A Strategy
Third, it designed a clever launch strategy to the United States. After getting a foothold in a chain of bubble tea shops, it expanded via targeting respected local coffee shops. It knew it needed people to trial the product – and who better to recommend it than the trusted local barista?
The outcome now is that it will never be able to make enough oat milk for The States. Ever.
Our take? The Oatly case study illuminates a couple of key points for brands. First, having a good product is the key starting point. If oat milk sucked, none of this would have been possible.
Second, a challenger brand can turn its weaknesses into strengths if it’s willing to take some risks (like losing a lawsuit).
Third, the launch strategy exploited two behavioural biases: authority, and then scarcity. Usually, we trust people of expertise, so getting baristas on board was a genius move. Then, running out of stock signalled that this was a product in demand. The news stories have likely only fuelled the demand for it.
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