Americans are losing the taste for plant-based milk — and Oatly is feeling the pain

There were some red-hot IPOs in the class of 2021, with Oatly, Roblox, Rivian, Robinhood, Bumble, and Coinbase all debuting on the public markets. But, while the last of those names has just been inducted into Corporate America’s flagship index, the S&P 500, Oatly’s journey couldn’t have been more underwhelming.

Long gone are the days when Oatly’s product was so sought after that it had its own online black market for the blue-grayish carton.

Riding an alt-milk wave, Oatly’s revenues nearly doubled every year from 2015 to 2020 — but shares of the Swedish milk maker are down some 98% from their 2021 peak, and in the latest quarter, Oatly’s growth finally went subzero. 

Now, Oatly is doubling down on its sustainable credentials, publishing a new “Sustainability Plan” yesterday, which includes “updated emissions reduction targets” and wider goals for “Nature, People and Nutrition.”

But winning over climate-conscious consumers might not be enough, as Oatly has been squeezed from all sides in recent years.

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Major campaigns to prevent plant-based products from even using the word “milk” have dogged the industry for a decade — the UK courts said no, the FDA said yes — and have only recently come to an end. Meanwhile, Big Dairy has splashed into oat territory, with brands like Planet Oat, from dairy giant HP Hood, eating into Oatly’s market share.

Consumers are also getting fussier over the nutritional value of milk alternatives, searching for brands with more protein and fewer sweeteners and artificial ingredients.

On top of all of that, after spending decades experimenting with everything from soy to almond to oat to pistachio, regular milk is making a comeback. Indeed, traditional milk sales saw their first uptick in consumption since 2009 last year, and are still up 3.5% for the past year to May, per USDA and Nielsen IQ data. Sales of plant-based milk, however, dropped some 8.4% for the two years to May.