Has Oatly Sold Its Soul to Trump Supporters?
Fans around the world are vowing to boycott the popular oat milk company.
Blackstone and Oatly. How did these two companies find each other? How can a company that claims to have sustainability as its core value team up with Trump supporters?
Unlikely a duo as they may seem, in July 2020, the Swedish oat milk producer announced it had secured $200 million in equity funding led by Blackstone Growth and a group of celebrity investors including Oprah Winfrey and Jay-Z. Oatly is valued at $2 billion and Blackstone holds now a minority share of 10%.
Oatly needed the investment to expand its production to become profitable and prepare for the planned IPO in 2021.
The private equity behemoth is after profits and Oatly operates in one the fastest growing food segments worldwide. There we go. A perfect match for Blackstone.
So why is everybody outraged?
Blackstone is the biggest private equity fund in the world and is linked to deforestation of the Amazon rain forest and supporting Trump.
The CEO of Blackstone donated $3 million to finance Trump’s re-election campaign. The Trump government has done everything to deny climate change and even pulled out of the Paris agreement.
The Blackstone Group is invested in a Brazilian company named Hidrovias. This company is aiming to transform the Amazon rainforest into farmland to double its grain shipping. They are also linked to the recent fires in the Amazon rain forest. People illegally burn down the forest and sell the land to agribusinesses, which can now transport their goods to the next harbor on the motorway built by Hidrovias. The protection of Amazon is crucial if we want to stand a chance against climate change and the increasing loss of diversity on our planet.
How does an investment firm with such values fit together with a company fighting against climate change?
Oatly’s response to critics
Oatly argues that what they have done marks a real change. Only when the world’s richest people invest in sustainable companies, then we can make a difference.
CEO Toni Peterson sees the benefit of $200 million being invested a good cause, rather than something else. This way, Oatly’s values can influence the world’s biggest private equity company for the better.
But we have not sold our soul. It is just the opposite: by making the uncomfortable decision to sell a minority stake to one of the world’s largest private equity funds, we are loyal to ourselves. — Oatly CEO Toni Petersson
It raises the question of how to scale sustainable practices if we are excluding everybody who is not perfect.
Can companies do good things while doing business with opposing forces? Or should they first stop being involved in unstainable practices before they can do anything good?
One thing is for sure, the money is well invested in a fast-growing company with a bright outlook. The $200 million will be used for Oatly’s further expansion reaching more people around the world with sustainable alternatives to cow milk.
But then again, there were probably less controversial investment companies out there who would have liked to invest in Oatly. So why did they choose Blackstone?
Some might say it boils down to greed. Blackstone offered the highest valuation.
Greed or the next logical step
Like every other normal private company, Oatly needs to make a profit at some point. The owners want rapid growth to maximize their investments. This is how it works.
Oatly tries to do so following a sustainable mission, which is admirable. In today’s world, it’s tricky to maintain 100% sustainability—especially if you want to scale. I am pretty sure the smartphone you are reading on right now is also not 100% sustainable. Or the funds you invest in for your pension.
Are we applying a double standard for Oatly and ourselves? For true sustainability, we would need to change the system of capitalism. Until then, we are all just trying our best to minimize our impact on the environment.
Only time will tell if the profit maximizers from Blackstone have a negative influence on Oatly in the long run.
Perhaps Oatly’s identity and soul were lost a long time ago. It is not radical and challenging to receive money from China or a giant private equity fund. It’s a conventional way of growing. Oatly’s owners want rapid growth. Soon they can buy their first yacht. Meanwhile, the Amazon is on fire. — Fredrik Gertten, Director of ‘Push’
Have the ex-Oatly fans the power to push for change? Or, perhaps, the brand has become so mainstream that this incident will not have a big impact on their turnover.
What do you think? Has Oatly sold their soul to the devil or is this decision just the next logical step? Let’s have a discussion.