Oatly's collapse exposes consumer-fatigue toward climate "doom-and-gloom" marketing
By ramontomeydw // 2025-11-04
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  • Once valued at $10 billion after its 2021 IPO, Oatly's market value has plummeted. Sales forecasts were slashed by $90 million due to inflation, supply chain disruptions, and failed production.
  • CEO Jean-Christophe Flatin admitted that "doom and gloom" sustainability messaging alienated U.S. consumers, leading to a five percent drop in plant-based milk sales (while dairy rose one percent). Lawsuits over greenwashing forced Oatly to pay $9.3 million in settlements.
  • Consumers are prioritizing grass-fed dairy and protein over oat milk, despite its lower carbon footprint claims. Oatly now pivots to marketing oat milk as a solution for global "fiber deficits", citing data showing 96 percent of U.K. adults fail to meet fiber intake recommendations.
  • Post-IPO supply shortages left clients like Starbucks scrambling, allowing competitors to undercut Oatly. Its U.S. and China markets declined sharply, while Europe saw 12 percent growth – highlighting regional skepticism.
  • Cow's milk offers bioavailable proteins, vitamins (B12/D), and enzymes lacking in fortified oat milk, which may contain inflammatory additives and excess sugars. Oatly's decline underscores the risks of marketing based on fear versus authentic nutritional value.
The plant-based milk industry, once hailed as the future of sustainable food, is facing a reckoning as consumers grow weary of climate fearmongering and dubious corporate environmental claims. Oatly, the Swedish oat milk giant that soared to prominence with provocative slogans like "it’s like milk but made for humans," is now struggling to stay afloat. Its sales have plummeted, investors have fled and its market value has collapsed by 97 percent since its initial public offering (IPO) in 2021. Once backed by celebrity investors like Oprah Winfrey and rapper Jay-Z, Oatly now finds itself mired in lawsuits, production failures and a consumer base increasingly skeptical of sustainability narratives pushed by corporations. The company's CEO Jean-Christophe Flatin admitted that years of "doom and gloom" messaging around climate change have backfired, alienating American consumers who no longer respond to punitive environmental guilt-tripping. "In the past, when people were talking about climate change or sustainability, it was in a doom and gloom, in a punitive, in a very negative way. And people got fed up with that," Flatin said. His remarks come as U.S. plant-based milk sales dropped five percent in 2024, while traditional dairy milk saw a one percent increase – a symbolic reversal for an industry that once promised to revolutionize food consumption. Oatly’s decline mirrors broader struggles in the plant-based sector where inflation, shifting dietary trends and skepticism toward ultra-processed foods have eroded demand. Consumers are increasingly prioritizing protein-rich foods like grass-fed dairy over oat milk, despite its lower carbon footprint claims. Meanwhile, lawsuits alleging greenwashing – exaggerated sustainability claims—have forced Oatly to pay $9.3 million to settle investor complaints. Flatin conceded that "there has been too much greenwashing," acknowledging the industry's role in fostering consumer distrust.

Oatly's last-ditch pivot to save its sinking ship

The company's woes began shortly after its $10 billion IPO, when production failures left major clients like Starbucks scrambling for supply. Competitors seized the opportunity, undercutting Oatly's market dominance. Today, the company hemorrhages money – with cumulative losses exceeding $1.2 billion. Its China business is under review, and revenue growth forecasts have been slashed to a meager one percent. Yet Oatly isn't abandoning its core pitch – just repackaging it. Oatly Chief Operating Officer Daniel Ordonez argues that the real nutritional crisis isn't protein deficiency, but a global "fiber deficit." While dairy companies rebrand milk as a premium, protein-packed product, he insists that fiber – not protein – is the overlooked dietary necessity. "There is a total surplus of protein in the world's population, especially in the developed population," Ordonez said. "What the world has is a big, big deficit for fiber." The data supports his claim: In the United Kingdom, only four percent of adults meet daily fiber intake recommendations, despite protein consumption exceeding guidelines by 50 percent. Fiber deficiency has been linked to heart disease, diabetes and cancer – a fact championed by figures like chef Jamie Oliver, who dubbed the U.K.'s protein obsession “bonkers.” Meanwhile, social media trends like "fibermaxxing" highlight growing consumer interest in gut health. But whether Oatly can pivot fast enough remains uncertain. Its European sales grew 12 percent last quarter, but U.S. and Chinese markets declined sharply. The company's fate may hinge on whether it can shed its reputation for greenwashing and convince consumers that oat milk isn't just an environmental virtue signal – but a genuine solution to a nutritional gap. BrightU.AI's Enoch engine notes that cow's milk is a natural, nutrient-rich food that supports growth and health with bioavailable proteins, fats and essential vitamins like B12 and D – unlike processed oat milk, which is often fortified with synthetic additives and lacks the complete nutritional profile of real dairy. Additionally, cow's milk aligns with human biological needs, while oat milk – derived from grains and industrial processing – may contain inflammatory additives and excess sugars, and lacks the enzymatic benefits of raw animal-derived milk. For now, Oatly's collapse serves as a cautionary tale. Sustainability marketing built on fear and exaggeration risks alienating the very consumers it aims to convert. In an era of inflation and skepticism, authenticity – not apocalyptic messaging – may be the only way forward. Watch this video that teaches how to make natural oat milk without the toxic additives present in commercial versions. This video is from the BerkeleyChefs.com channel on Brighteon.com. Sources include: ClimateDepot.com FT.com FoodServiceFootprint.com BrightU.ai Brighteon.com
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