What the Oatly Debacle Teaches Us About Branding

Phil Edelstein
Oct 9, 2020 · 6 min read

Who knew that there would be a darling of the oat milk world? Who knew that a headline featuring the likes of Oprah, Natalie Portman, and Howard Schultz would cause said darling to fall from its hallowed place in the halls of brand fame and be thrust into the center of our current political era, left to fight hand-to-hand social media combat, day-in and day-out?

Who knew. Who knew.

But yes, dear readers, this all happened. In mid-July, Oatly, the company famous for … making oat milk famous, featuring a brand imbued with a uniquely comical spirit and a deep commitment to sustainability, announced a $200 million cash infusion from the big, bad wolf of the private equity world, Blackstone. The money included investments from the likes of Oprah, Howard Schultz and Natalie Portman — all of whom somehow completely evaded the ensuing mess.

Blackstone, whose name alone inspires visions from the fiery hellscape of Mordor from Lord of the Rings. Blackstone, whose CEO is apparently driving deforestation of the Amazon rainforest (gives you the warm and fuzzies, doesn’t it?), who is deeply involved in the various shades of grey between the Oval Office and certain corporate moguls, who is an ardent supporter of our less-than-eco-conscious administration (no judgement here — in this case, it’s just the truth).

Regardless of your politics, you can’t deny that when Blackstone meets Oatly — the progressive, chuckly oat milk brand which is as green as the green new deal — sparks are going to fly. And that’s exactly what happened. The company became embroiled in a social media and press firestorm. We saw headlines like, “Oatly Accused of ‘Selling Its Soul’: Why People are Boycotting the Oat Milk Brand” and “Exclusive: The Oatly Boycott — Activist Who Brought the Blackstone Issue to Light Speaks Out.” We saw aggressive tweets from the likes of Less Waste Laura and PapaPalpatine (yes, this is us cherry-picking funny Twitter handles).

We always knew that people could be cancelled, but oat milk brands? That’s something new entirely.

We aren’t here to judge our dear Oatly, or to make bold political statements. What we are here to do is draw three very important branding lessons that can be learned from the Oatly debacle.

Lesson 1: Just How Deep Branding Really Needs to Go

Prior to the Blackstone issue, we probably would have written an article about Oatly, discussing just how exemplary the company was when it comes to branding. They did just about everything right: Defining a core, driving brand purpose (The Oatly Way), speaking with an incredibly quirky brand voice that went so far as to permeate the name of its creative department, espousing deeply felt brand values and an incredibly focused US-launch strategy.

Oatly did everything right — literally — except for one thing. It took an investment from Blackstone.

Most executives don’t think their brand needs to be taken into consideration when evaluating a potential investor. After all, the investment is a business consideration. The brand? That’s a marketing consideration.

Oh my, how wrong one can be. We’ve written before about how branding and business are in fact deeply intertwined. The Oatly and Blackstone issue shows that even the most pragmatic of business decisions need to stay true to our brand values. Especially when you’ve built up a loyal fan-base of ultra-evangelists, every decision will be scrutinized by internal stakeholders and external customers alike. Ignore your brand and the values you espouse at your own risk — if you do, people will cry foul faster than Philadelphia can create funny t-shirts after the presidential debate.

Lesson 2: This Corporate Social Responsibility Stuff? It’s the Real (Green New) Deal.

A recent report from Deloitte posits a very interesting idea: With our society fraying, faith and trust in institutions steadily diminishing, and polarization and tribalism on the rise, people are turning to their last hope for driving change: Businesses. They are looking for businesses to engage on issues, to take committed action and to use their dollars to do more than just deliver profits.

Many, especially financially-minded individuals, might shudder at this idea — a business focused on something other than profits? But this is the reality now: If you’re not doing something, you bear the risk of being perceived as part of the problem. And if you get called out … well, you’re in for the ride of your life.

Blackstone’s lack of control surrounding its own brand identity and perception when it comes to corporate social responsibility is, ultimately, what drove the Oatly firestorm. If financial companies don’t think this is a critical dimension of their brands, they are ignoring the state of the world in 2020. It’s part of the reason why BlackRock is so invested in sustainability, and why State Street is so emphatically seeking to drive change at the board-level of the companies it invests in.

Even if you’re not a financial company, corporate social responsibility is going to be a filter on buying decisions. Consumers will ask: How do you support the environment? What action are you taking around diversity, equity and inclusion? What is your fundamental driving purpose beyond driving profits?

Increasingly, brands have to have answers to these questions.

Lesson 3: Man, Social Media Sucks

We say this (sort of) in jest — social is the way of the world these days, and it’s actually a wonderful vehicle for driving authenticity and relevance for brands. But when it comes to crisis communications, it’s a brutal world, especially when people have nothing better to do during the Covid-era than snipe at brands from their couches.

It was almost impossible to miss the Oatly debacle on social media. LinkedIn was rife with people calling out the business for making a decision outside of its values. #BoycottOatly was a thing on Twitter.

Here was the odd-ish twist: Oatly took a highly active crisis response approach on all social media platforms. It penned an attempt at honesty and openness about its thought process and posted it online. Nearly every post on social went answered, with the company attempting to explain its thinking. And the responses weren’t boilerplate — they were direct, forthright attempts to both listen and offer their own perspective.

This was brand stewardship at its finest. Seriously. We can see everyone nodding their heads in the “Zoom Board Room” — “this is who we are and we’re going to show everyone!” And don’t get us wrong, Oatly’s response was a sight to behold. It was a company living its values openly and unapologetically. It was showing that the company was listening and taking the criticism seriously.

The problem goes back to that pesky world of social media. You see, Oatly has a lot of followers. So when Oatly responds first-hand to every critique online, a lot more people see it. And unfortunately, our world these days online is basically a bunch of attention-seekers looking for more likes and profile views. So,every time Oatly responded, more people saw that social post. And every time more people saw that social post, there was someone else who said, “ooh, I should call out Oatly and maybe I’ll get mentioned too!”

In our opinion: Do the corporate statement, Oatly. Respond to the press. But also recognize that a fire needs oxygen to keep burning. Don’t give credence to every social media post that comes your way. All you’re doing is extending the amount of time that this issue will live on. All because a bunch of people want more likes.

But, that’s just our opinion. In reality, this was a rock and a hard place situation. Oatly could not respond on social, have no control over its message and be seen as uncaring, or it could respond and incentivize more people to take their pot-shots.

So yeah, social media sucks.

In Closing…

Your brand needs values. It needs a core purpose. It needs to have a belief about what’s important in this world we call home. And it needs to filter decisions through those values every single day, without fail, even when it comes to taking investment dollars.

Otherwise, you’ll just be another oat milk brand.

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Phil Edelstein

Written by

Founder of PHL Branding – a firm that believes that brands that go deeper drive businesses further.

On Advertising

We’re an open community of Executives, Strategists, Designers, Developers and Students alike, skeptically examining communication, technology and culture.

Phil Edelstein

Written by

Founder of PHL Branding – a firm that believes that brands that go deeper drive businesses further.

On Advertising

We’re an open community of Executives, Strategists, Designers, Developers and Students alike, skeptically examining communication, technology and culture.

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