How Oatly is Disrupting The Dairy Industry – Strategy With RS

An industry which has been our companion since the dawn of civilisation is under attack. Yes a cross industry competitor is determined to disrupt the milk industry.
Oatly, a Swedish oat milk producer is offering a nondairy milk by blending oats & water.
Oatly is not attempting to mislead people by passing off its product as ‘milk’. It is advertising itself as, ‘No milk. No soy. No badness.’ or ‘Like milk, but made for humans.’
The dairy lobby has been swift to file a lawsuit against the company pleading that the Oatly advertising campaign seeks to imply that milk is unhealthy.
The lawsuit has raked up a controversy which is giving publicity to Oatly. This is getting more & more people to try Oatly. Result – Oatly has winged its way to over 12 countries in Europe & Asia & its revenue has bumped up 37% in Sweden, its home market. Emboldened by the success, the company has introduced frozen dessert, yogurt & creamer & a breakfast product which combines fruit juices with oats.
If you were a stakeholder belonging to the dairy industry how would you tackle this situation?

The dairy industry instead of filing a lawsuit should have put out a positive campaign building it on its inherent strength:
1.Natural produce: There is a rising trend among people to move towards natural & organic products. Milk is a natural product & dairy industry should focus on this inherent strength.
2. Natural taste which is the best: This is important because the taste of Oatly is its weakest point.
3. Natural feed: The dairy industry should move towards feeding its animal with natural feed & ensuring that no antibiotic & external drugs are administered for getting more milk. And it should create awareness about it in general public.
4.Ethical treatment of animals : Along with ‘natural’ produce, ethical treatment of animals is also becoming an emotional issue. Incase this is not being done then the industry should start creating awareness among its member to adopt this strategy & create awareness about its prevalence among the general public.

Bottom-line: The dairy industry should take this sudden & unanticipated attack positively & treat it as a wake up call to start embracing strategies that will ensure its longevity in perpetuity.



In this series, Rajesh Srivastava, Business Strategist and Visiting Faculty at IIM Indore gives you a regular dose of strategy case studies to help you think and keep you one step ahead as a professional as compared to your peers. Rajesh is an alumnus of IIM Bangalore and IIT Kanpur and has over 2 decades of experience in the FMCG industry. All previous Strategy with RS posts can be found here