September 3, 2020

How Oatly chose cash over brand

How a new owner made the oat milk company unpopular (again).

Mimi Billing

4 min read

The Swedish oatmeal company Oatly is facing controversy.

The Swedish oat milk company Oatly is doing great on paper.

The company had $200m in sales in 2019, double what it reported in 2018. And with a new investment of $200m for a 10% stake of the company, Oatly is now worth $2bn. For a company who fought (and lost) the Swedish milk lobby over advertising in 2015, this is pretty big.

But today a number of loyal customers are now turning their backs on the company. Why?

Well for starters, one of the new owners following a $200m investment deal last month is Blackstone, one of the largest private equity firms in the world seen by many as out of kilter with Oatly’s ethical brand.

Blackstone was cofounded by Stephen Schwarzman who according to Bloomberg single-handedly accounts for the vast bulk of the reported contributions toward Trump’s re-election effort. This has not been rebutted.


The American company has funded hundreds of companies and was recently in trouble for funding the Brazilian company, Hidrovias, that was accused of being actively pushing deforestation of the Amazon. Blackstone has denied Hidrovia’s involvement in this.

The investment by Blackstone into Oatly was reported in mid-July and apart from some Swedish environmentalists like the movie producer Fredrik Gertten, known for Bananas! and Bikes vs Cars, who has openly criticised the deal, the criticism wasn’t widespread until a few environmentalists picked up on the Amazonas issue six weeks later.

According to Oatly, accepting Blackstone as new owners will have an overall positive effect on the environment.

“It’s always sad to part ways with consumers. But those who’s been with us for a while know that it has always been in our DNA to challenge the status quo and do what we believe is right to change the world to the better, rather than what is easy or comfortable,” says Linda Nordgren, communication manager at Oatly, in a written statement to Sifted.

This is not the first time that Oatly has had to deal with controversy. Another was when the then state-owned investment firm China Resources bought a 30% stake in the company in 2016, causing accusations of hypocrisy. Various reports put China in the lead for having the highest CO2 emissions in the world and it has a questionable human rights record.

The explanation from Oatly was that they were spreading sustainability.

“One of the reasons [for Chinese owners] was to enter the Chinese market. The country’s dairy consumption is on the rise and it would not be sustainable if China took our Western living habits. It would be a climate disaster,” Oatly’s creative director Martin Ringqvist told Sifted in 2019. “We have an obligation to be there to offer a sustainable alternative.”

Oatly chief executive Toni Petersson had a similar explanation about the Blackstone deal.

“This is exactly what Oatly's brand is about: Dare to make uncomfortable decisions to push the world in the right direction. The large capital flow, which Blackstone, among others, represents, must change and become green. This is a first step on that path,” Petersson told Swedish newspaper Expressen.

“Only through the deal itself have we managed to influence Blackstone. They chose to invest their money in a sustainability company, instead of stopping them elsewhere,” he continued.

The Chinese shareholders made Oatly’s Swedish customers less inclined to swallow the company’s visions and in 2019, the company’s daring advertisement campaign backfired.

Now Oatly’s honeymoon seems to have ended outside of Sweden as well.

Adding to the pressure on Oatly’s brand is the growing criticism from the healthy eating community that the milk is remarkably high in sugar for a product that is branded as “healthy”. A recent piece by writer Nat Eliason called Oatly “The New Coke”.


The drop in Oatly’s popularity can in part be explained by the fact that Oatly no longer is perceived as a small company that needs protection from the big corporations — it has lost its David vs Goliath advantage, according to Ingela Stenson, long-term communication expert in the milk industry, now at the analytics company United Minds.

“Everyone loves a startup, but when the startup turns scale-up, it loses that shine. The money raised from big players is changing the company image,” Stenson says.

Some argue that for Blackstone the investment in Oatly is merely a way of greenwashing. But for Oatly, the large investment may be used as adding an extra sugar-coating ahead of a coming IPO. This, however, is nothing that Oatly wants to comment about.

Mimi Billing

Mimi Billing is Sifted's Europe editor. She covers the Nordics and healthtech, and can be found on X and LinkedIn