14-05-2025
Sorry vegans, good old-fashioned milk is back
When Oatly, the Swedish oat milk company, launched on the stock market in 2021, it was the herald of a new non-dairy dawn. Shares began trading at $22.20 per cent over their listing price, valuing the company – briefly – at $15 billion. The company had celebrity cheerleaders, including Oprah Winfrey and Jay-Z. It advertised during the Super Bowl. There had already been signs of what was coming: in 2018, baristas up and down the UK were left twirling their moustaches in frustration at an oat-milk shortage. We presume the boring old dairy cows and their milkers watched their Nasdaq trackers with envy and deepening gloom, the hand-weavers of the nouvelle oat cuisine.
How times change. Oatly's advertising today comes with more than a whiff of lacto-free desperation. 'I love Oatly in coffee if I don't know it's Oatly,' pleads one advert I've seen on Tubes and buses. In another promotion the company has given away thousands of flat whites through the coffee shop Grind.
I am disappointed, not because I like the stuff – I find oat milk gives everything a sweet, nutty aftertaste – but because I had admired its holier-than-thou branding. More than other alternative milks, oat milks – and Oatly in particular – were always marketed as archly superior ambassadors from a future in which the world had given up its cow-loving ways. 'You'll join us one day,' they seemed to say.
The change of tone to 'begging for mercy' reflects a business that has spent years in decline. The value has fallen more than 97 per cent since its peak after the IPO. Oatly has been buffeted by slowing sales, production problems and increased competition. (They, too, are becoming more eccentric. Minor Figures, the London-based rival, has just launched something called HYPER OAT, which it describes as a 'colourful, functional, flavour-forward collection'. I had no idea what this meant. On closer inspection these are drinks infused with, in the case of the Berry version, calcium and protein. Do you know which other type of milk is rich in protein and calcium?)
Having once been the hip alternative to cow's milk, or at least the one they told us baristas preferred – something to do with how the milk frothed – Oatly, and oat milk more generally, has become the incumbent. It is a nightmarish pedestal for any company trading in cool to sit upon, and its story will no doubt be taught as a cautionary tale for businesses on a similar trajectory.
Oat milk makers may find a drop of consolation in the fact that the total oat milk market continues to grow. But it is slower than they hoped. And a large enemy has arisen from slumber. The usual joke is that it is young people who take their coffee order like their romantic partners: complicated, skinny, weak and vegan-friendly. But research shows that that most unglamorous of products, cow's milk, is enjoying a renaissance. Sales of whole milk in the US rose 3.2 per cent last year, only the second increase since the 1970s. Younger customers are wary of processed foods and high prices, and keen on fats and proteins. Put down the oat milk Grandad, it's not 2019. Investors will not be so quick to bet against the cow next time. In a coffee shop you are never far from a herd mentality.
