The case “Oatly AB: Bringing Disruption to the Global Dairy Industry” talks about the way Sweden’s oat-based dairy products company Oatly AB (Oatly) was disrupting the global dairy industry. The case starts out by mentioning the intentions behind the creation of Oatly’s flagship product – oat milk – and the company’s inability to make it a mainstream product for almost 20 years, despite numerous product line extensions and expansion into several new markets. The case then documents the rebranding strategy implemented by Toni Petersson (Petersson), CEO of Oatly, to alter the company’s brand positioning and make it into a lifestyle brand, in a bid to boost sales of its oat milk. The case details how the success of the re-branding strategy prompted the company to venture into the highly competitive alternative dairy market of the US, where consumers were not really aware about oat milk. It later provides information about the unique way the company went about creating product awareness by using baristas at independent coffee shops as ‘brand evangelists’. Details are also provided about the supply chain issues encountered by Oatly following its market success in the US. A glimpse is also provided into the competitive scenario and the future plans of the company, which included expanding operations into China. It remained to be seen whether Petersson could successfully transform Oatly – one of ‘The World’s 50 Most Innovative Companies of 2019’ – into a global brand.

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Issues

The case is structured to achieve the following teaching objectives:

	Recognize the importance of innovation in disrupting an industry.
	Analyze the role of a new product in disrupting a well-established industry.
	Examine the blue ocean strategy of defining a new market and taking a leadership position in it.
	Scrutinize the compulsions, risks, and rewards for a company undertaking market disruption.
	Study the importance of rebranding at different stages in the evolution of the market.
	Examine the market entry strategy of a new product company in an overcrowded market.
	Assess the importance of the international market expansion strategy of a new product company.

Contents

INTRODUCTION

HOW OATLY CAME ABOUT

OATLY’S REBRANDING STRATEGY

OATLY’S DISRUPTION OF THE US ALTERNATIVE DAIRY MARKET

THE GROWING SUCCESS STORY

CAN OAT MILK AND OATLY PREVAIL?

HOW PREPARED IS OATLY TO MAKE OAT MILK MAINSTREAM?

STEPPING UP INTERNATIONALIZATION WITH CHINA

THE ROAD AHEAD

EXHIBITS

Keywords

Innovations, Blue Ocean Strategy, Target Marketing, New Product Development Strategy, New Product Pricing Strategy, Role of Packaging, New Product Adoption Process, Market Diffusion Process, Disruption, Brand positioning, Rebranding, Product Planning, Advertising, Message & Media Strategy, Strategic Brand Management Process, Mode of International Market Entry

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