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THE INC. LIFE

This $4.39 Cult Swedish Drink Is Poised to Disrupt a $16 Billion Industry

After 25 years of perfecting their recipe, a Swedish company take the U.S. market by storm.

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BY Betsy Mikel - 10 Apr 2018

This $4.39 Cult Swedish Drink Is Poised to Disrupt a $16 Billion Industry

PHOTO CREDIT: Getty Images

Sweden is the home of many great innovations. The Scandinavian country brought us Ikea and Spotify. The country has even experimented with the six-hour workday.

While jamming to your Discover Weekly playlist and kicking back on your Klippan loveseat, get ready for the next Swedish trend to soon take America by storm.

It's oat milk. Yes, that's "milk" made from oats.

Oatly is a Swedish-based company that's been producing oat milk for its countrymen since the '90s. Here's how they describe the beverage in their own words: "The company's patented enzyme technology copies nature's own process and turns fiber rich oats into nutritional liquid food that is perfectly designed for humans." Delicious! (No really, it is. I'm drinking it right now.)

 

The packaging is delightful. The product is good. Even though it's vegan, Oatly has a consistency similar to whole dairy milk and boasts a slight natural sweetness. Millennials and hipsters such as myself love the stuff. Just last month, there was an Oatly shortage. Not because they ran out of oats. Because Oatly couldn't make it fast enough.

"We can't cut corners on how we make it," Oatly's general manager Mike Messersmith told Well and Good. "That's why it's hard to scale fast and meet demand--you can't make concessions on how the product is made."

Here's how Oatly emerged as a force to be reckoned with and is now poised to carve out a major chunk of the lucrative alternative milk market.

Tapping into a $16 billion industry

About a year ago, Oatly began distributing its oat milk in the United States. To properly enter a new market, they had to be smart. While dairy alternatives are so hot right now, the American market is crowded. There's almond milk, soy milk, coconut milk, cashew milk, and the utterly disgusting hemp milk. The global market for dairy alternative drinks is expected to reach $16.3 billion in 2018, according to Innova Market Insights.

Oatly had plenty working in their favor. Almond milk -- the plant milk preferred by many who don't drink dairy -- was having a rough go. It takes just over a gallon of water to produce a single almond, Mother Jones reported. Most almonds are produced in California, which was suffering from an intense years-long drought.

But that didn't mean Oatly could waltz right in and kick all the other alternative milks out. Though Swedes and Europeans have been drinking oat milk since the '90s, it's less known in the U.S.

A grocery store chain like Whole Foods might seem like a natural fit, but it's ridiculously hard to get shelf space there. It can take years to get into Whole Foods, and there's only so much space.

Oatly needed different approach They needed allies. Those whose opinions were trusted by consumers. Influencers. Oatly knew just the people: baristas.

Putting other plant milks to shame

Baristas were the perfect target to help launch Oatly into the U.S. market. Baristas tend not to like working with plant milks. "They are either too thin, too bitter, or contain a long list of artificial thickeners and preservatives: xanthan gum, potassium sorbate, sodium benzoate," explains Food & Wine.

But Oatly works pretty well in coffee drinks. Unlike other alternative milks, it foams nicely. It doesn't curdle with heat. And it doesn't have those gross-sounding artificial ingredients.

So Oatly sent samples of their whole milk alternative to baristas across America. It caught on somewhat like wildfire. The first company place an order was Intelligentsia Coffee, Food & Wine reports.

"It's the first time my baristas have gotten behind an alternative milk in an intense way," Intelligentsia president and CEO James McLaughlin told the magazine. "We started stocking the liter cartons on our shelves because customers were like, 'I want to take this home.'" McLaughlin says Oatly quickly outpaced almond and soy milk in customer orders.

Other coffee shops followed suit. Oatly quickly went from being served in a dozen coffee shops to being available in more than 200 across New York, coffee publication Sprudge reports.

Now, Oatly is available for purchase in the U.S. through their website -- that is, if it's not sold out. Or you can use their handy Oatfinder to see if it's available in a coffee shop or store near you. That's how I was able to snag a $4.39 quart of Barista Edition Oatmilk to add to my home-brewed coffee. I'll probably buy more, even though I'm fine with dairy. Oatly has won me over, and I'm sure it will do the same to others.

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