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Oatly’s New Strategy Aims to Boost Plant-Based Milk Demand in the U.S.
Oatly is gearing up to revitalize the demand for plant-based milk in the U.S. with a new strategic approach that is set to pave the way for its first year of profitability as a publicly traded company, CEO Jean-Christophe Flatin revealed during the recent earnings call with investors.
The company has experienced growth in Europe and China, thanks in part to expansions in the foodservice sector and aggressive marketing initiatives aimed at enhancing its appeal to consumers. Oatly is now planning to implement a similar strategy in North America, where its performance has been lacking, starting in the latter half of 2025.
As Oatly celebrates its best financial quarter since its IPO in 2021, the company is eyeing the Gen Z demographic by focusing on coffee products and emphasizing trends such as health and sustainability.
Oatly’s Growth Story
Originally thriving amidst the plant-based milk trend in the late 2010s, Sweden-based Oatly has faced challenges in achieving profitability since going public four years ago amidst a slowdown in the category. Despite its success in Europe and China, the company has witnessed a decline in its North America operations, with a 10.6% decrease in revenue compared to the first quarter of 2024, according to its latest earnings report. While global volumes grew by 9.2%, North America saw a decline of 10.9%.
Flatin acknowledged the sluggish demand for Oatly’s products in the U.S. and Canada, attributing it to underutilized resources. The company plans to ramp up efforts in the second half of 2025 by increasing product availability and dispelling misinformation surrounding its products’ health benefits.
Oatly is doubling down on its coffee offerings, particularly targeting Gen Z consumers who are increasingly opting for oat milk in their beverages. With oat milk becoming a popular choice at coffee shops, the company’s collaboration with Nespresso for the Barista Edition espresso has been a successful venture in the coffee segment.
Looking Ahead
Oatly’s focus on coffee and other product categories aligns with its goal of introducing more consumers to oat milk. With 82% of U.S. consumers yet to try oat milk, Oatly sees a significant opportunity to cater to the evolving preferences in the beverage industry.
Flatin emphasized that progress may not be immediate, but the company is committed to making strides in capturing the new wave of coffee enthusiasts and expanding its market reach.