If you’re concerned about sustainability and wellness, chances are you’re a consumer of oat milk, the latest star in the alternative milk scene. But does oat milk have appeal around the world? And who will lose out as big dairy muscles into the alt milk space?
Sponsored by American Express
Kira Bindrim is the host of the Quartz Obsession podcast. She is an executive editor who works on global newsroom coverage and email products. She is obsessed with reality TV.
Sarah Todd is a senior reporter for Quartz and Quartz at Work. She is obsessed with her dog, advice columns, and plant sentience.
This episode uses the following sounds from freesound.org:
Kira Bindrim: Walk into an American Starbucks these days, and you’ll find four different options for plant based milk. There’s almond milk, which was invented in 12th century Italy. You can get soy milk, that originates in 14th century China. There’s also coconut milk, which has been around for basically as long as coconuts. And then there’s the baby of the bunch, oat milk.
Oat milk is made by mixing water and oats, blending it up, extracting the solids, and treating it with enzymes. It was developed in 1994 by a Swedish food scientist named Rickard Öste, who was researching lactose intolerance. Öste and his brother turned the product into a company Oatly, which last year booked $421 million in revenue, double its revenue from 2019. In the United States, oat milk is now the second most popular plant based milk. That success is largely because oat milk appeals to a few key demographics: environmentally conscious consumers, foodies, and people dealing with lactose intolerance.
But one group is not psyched about oat milk, and that’s the dairy industry. For years, it’s been trying to limit how companies like Oatly can package, label, and advertise their products. At one point, the European Union almost prohibited Oatly from even describing oat milk as creamy. Now, who gets to use the word creamy, or package their beverage in a carton might seem like weird debates. But they’re an important part of a massive movement to make plant based alternatives for foods whose production hurts our environment. So it kind of is time to ask ourselves, what constitutes real food? And who gets to decide? Now, at least some of the answers can be found in the dairy aisle.
This is the Quartz Obsession, a podcast that explores the fascinating backstories behind everyday ideas and what they tell us about the global economy. I’m your host Kira Bindrim. Today: oat milk, and why dairy has gotten so dramatic.
I am joined now by Sarah Todd, who is a senior reporter at Quartz. She’s also based in New York so we’re together in the studio. I thought, Sarah, we might start by talking about what we’re drinking right now. Why don’t you tell the listener about it.
Sarah Todd: So we are drinking a pair of oat maple lattes, which I picked up from a little Park Slope coffee shop, and the story of how I got it is actually a semi-interesting story. I thought that I was going to go pick it up at Starbucks, which, Kira, as you just mentioned, has a partnership with Oatly. They sell oat milk everywhere, but there was no Starbucks where I thought it was going to be, it had shut down. So then I had to go to a little indie coffee shop and I was making a gamble. I was thinking, ‘Wll they or won’t they have oat milk?’ and advertised right on the sign outside was oat milk maple latte. So I knew that oat milk has truly made it.
Kira Bindrim: What a reversal of fortunes where oh, the Starbucks is closed so you have to go to the indie coffee shop. So how would you describe the taste of oat milk?
Sarah Todd: I would say that it is creamy, that it is rich, and that it is more comparable to the taste of whole milk than a lot of other alternative milks. But what do you think Kira?
Kira Bindrim: Well, I have to confess to you this is actually my first oat milk tasting. I am a diehard half and half person, like the one thing you definitely shouldn’t be putting in your coffee I am quite religious about. But it’s good. It is. There is just a little aftertaste of oat, which is to be expected but it’s sweet and it is creamy, which are the two things, over sugar, that I really need in my coffee.
Sarah Todd: Exactly.
Kira Bindrim: So tell me a little bit about how you got interested in this particular topic. You’re not necessarily our chief milk reporter.
Sarah Todd: No, although I would say that I’m very interested in beverages, but specifically I got interested in Oatly because they are a very weird company. They have this very colorful CEO whose name is Toni Petersson. They have a very divisive Super Bowl commercial that ran during this past year’s Super Bowl in which he was seen playing the keyboard in the middle of a field singing “wow, no cow” in a very off key tone of voice. I just really wanted to know what was up with Oatly and that led me into a broader obsession with oat milk as a whole.
Kira Bindrim: My first job ever when I was a sophomore in high school was an intern at Milk Pep, which is this like, well it’s probably a lobbying group, but it’s a marketing group that is funded by milk companies that is trying to promote drinking milk, and what this means is that, at the time remember the “Got Milk” campaign was so big? They had a whole closet full of swag from the “Got Milk” campaign, so I had like twenty-five”Got Milk” posters at one point. Including, of course, the coveted Jonathan Taylor Thomas poster. That’s a real highlight of my teens.
Sarah Todd: What did you do with all of your “Got Milk” posters?
Kira Bindrim: I think they’re gone now. But that period was really nice,
Sarah Todd: And you know, in a sign of the changing times, Chobani recently, while advertising one of its own products, had a similar milk mustache advertisement featuring a Timothée Chalamet look alike, which, why not the real Timothée Chalamet? I don’t know. But I think maybe they were trying to make a kind of meta statement like, the oat milk is like milk, but it’s not. This is like Timothée Chalamet, but he’s not, you know, they’re layers.
Kira Bindrim: Wow, that is a real like, trajectory.
Sarah Todd: Yeah, from JTT to Timothée.
Kira Bindrim: I want that side by side. So let’s get a little bit into, like, the oat milk basics. Oat milk 101, as it were. One of the things that I thought was cool when we picked this topic is we probably could have gone into any of those milks—soy milk, coconut milk—and had an interesting story. But we chose the newest one, which I think is kind of cool. So what is oat milk? How do you make it? Can you make it yourself? Like, give us kind of the basic definition.
Sarah Todd: Oh, yeah, you can absolutely make it at home. I haven’t tried. But if you want to, here’s what you do. And this is basically what all the big producers do, too. You take oats and you take water and you mix them together. Then you strain out the solids, you maybe do that once or twice, and then you refrigerate it and you’re done. Obviously the manufacturers have more processes, they’re adding enzymes, and they’re doing fancy things too, but that’s the gist. You can add flavoring if you want. If you’re making it at home, you could add a little vanilla, that could be nice.
Kira Bindrim: And at this point, are we just talking about milk? Or are there a lot of other oat based kind of dairy alternatives out there?
Sarah Todd: Yeah, there are actually a lot. So, oat milk products are out there in numerous forms, they include oat yogurt, which you can call oatgert, if you’re so inclined. There’s oat ice cream, there’s oat whipped cream substitute. So there are really all kinds of ways that you can use it. I think that as you mentioned with your latte, often there’s a little bit of an aftertaste of oats, but that’s not unpleasant so people can be into it.
Kira Bindrim: Oat cheese?
Sarah Todd: Oat cheese, I don’t know if there’s oat cheese yet (Editor’s note: yes, there is oat cheese). But that’s a good idea. Vegan cheese is sort of the white whale of vegan products as a whole. It’s really hard to make fake cheese that tastes good. But people are working on it.
Kira Bindrim: As a half and half drinker my perception is that any alternative dairy, whichever of those other milks I’m choosing is healthier for me in some way. By choosing half and half, I’m actively choosing to be unhealthy. Is that perception right? Is oat milk healthier than dairy milk?
Sarah Todd: Well, the interesting thing about healthy as an adjective is that it’s somewhat meaningless, actually, when you really start breaking down nutritional data.
Kira Bindrim: Go on.
Sarah Todd: So I mean, you know, oat milk and other alternative milks have pros and cons, just like dairy has certain pros and cons. There are all these trade offs, in terms of how the nutritional data compares with oat milk versus regular milk. So oat milk has three grams of protein compared to cow’s milk, that typically has seven or eight grams of protein. So some, but not a ton. It has some fiber, milk has none, that’s cool, you can get a tiny bit of fiber, although less fiber than you would have if you ate, say a bowl of oatmeal. They both have different sort of calcium and added vitamins that you need—milk has those naturally, oat milk and most other alternative milks just add them later in the process so you’re getting them both ways. From a nutritional standpoint, they’re both fine I would say. Where milk really has an advantage nutritionally is more when it comes to things like, you know, it’s gluten free. So that’s great if you have celiac. It’s also tree nut free, so if you have any kind of nut allergy, it’s safe. And then also something like 65% of the global population is lactose intolerant to some degree or another. So if you struggle with digesting milk, then certainly oat milk could be preferable.
Kira Bindrim: So outside of the individual decision making part of this where you’re sort of making choices based on your health or if you’re lactose intolerant, are there any larger environmental or sustainability reasons that someone might want to choose oat milk or even any alternative milk over regular dairy?
Sarah Todd: Yeah, so from an environmental perspective, there are several advantages to oat milk as opposed to dairy. One of them is that dairy accounts for a high proportion of global carbon emissions, that constitutes about 4% of all global emissions. So from that perspective, certainly oat milk uses a lot less carbon. It also uses a lot less land, a lot less water, a lot less energy overall. It’s also preferable compared to almond milk—it uses about six times less water than almond milk.
Kira Bindrim: If any form of milk is worse than no form of milk, than just water and other things that we could use as beverages, why milk? Why do we even need milk? What if we just didn’t have milk?
Sarah Todd: Yeah, great question, Kira. So I mean, when we’re babies, we drink milk.
Kira Bindrim: Right, right, I’ll allow that part.
Sarah Todd: It has a certain sort of legacy. From there on though I think that because human babies and animal babies all drink milk. It has a certain reputation as sort of being, you know, very nurturing, very wholesome. So it has that legacy. But in terms of why we drink milk today, it has an interesting history to it. So for most of human history, people weren’t really drinking milk. And one of the big issues with dairy milk, in particular, was refrigeration—for most of human history, we didn’t have it so it would spoil, you didn’t want to be drinking milk. There were also a lot of technological limitations. But during the Industrial Revolution, we got refrigeration, we got pasteurization, we got agricultural technology that allowed people to be producing milk at a far greater scale. So there are some historical reasons why this shift happened. And then part of it is also no accident. The dairy industry has been partnering with the US government for a long time in trying to sell dairy milk to American consumers.
Kira Bindrim: So it’s my fault for interning at the Got Milk place.
Sarah Todd: Yes, Kira. You did it.
Kira Bindrim: I knew it.
Sarah Todd: You know, and I think it’s understandable. Again, dairy has been very successful in integrating itself into people’s diets for a long time. A fun fact that I learned while doing research for this very podcast episode, is that part of the reason big dairy became so ingrained in everybody’s diets was during World Wars I and II, the government was shipping canned milk and powdered milk abroad to soldiers, they wound up with a milk surplus, and then they were like, what do we do with all this milk? So then they wound up being like, I know, we’ll give it to kids. So it became part of the school lunch program, which still exists today. And in that sense, it’s become very intertwined with our ideas of you need to drink milk to be healthy, to be strong. And it turns out that that’s really not necessarily true, apart from when you’re a baby. I, again, I don’t think that it’s that milk is bad, but I don’t think it’s good either. I think it’s just an option.
Kira Bindrim: After the break, oat milk goes global.
Kira Bindrim: So we talked a little bit or I talked a little bit at the beginning about how Öste invented or developed oat milk in 1994. And then we’ve talked about how it’s super popular and in Starbucks today. What was the initial reception to oat milk? Like how was it sort of early years out in the world?
Sarah Todd: Yeah, the initial reception was very quiet, I would say it was it was really developed to cater to people who are lactose intolerant. And I imagine they liked it. They appreciated it. But it wasn’t really a big thing until Toni Petersson, who’s the current CEO, took over in 2012. That’s when it really took off.
Kira Bindrim: What turned things around, what did he do?
Sarah Todd: He has a great marketing vision. The marketing vision for Oatly is really two pronged: one part of it is the sustainability aspect. That’s a big deal. Oatly puts their carbon emissions information on their milk cartons. They’re very forthright about their commitment. So when you’re buying Oatly, you can feel good about your environmental impact. That’s something that, his coming to be CEO in 2012 I think coincided with a lot of people just thinking more about the environmental impact of what they were eating and drinking. Then the other part that really helped only take off and by extension, oat milk as a whole, is the sort of quirky winking, a little bit snarky marketing tactics that Oatly uses. They’re very funny, very dry. If you look at their cartons, there are all kinds of winking catchphrases and slogans. Or, for example, after the Super Bowl commercial that we mentioned earlier, in which Toni Petersson was standing in the middle of a field singing, a lot of people didn’t like that commercial people. People thought it was weird, they didn’t appreciate his singing voice. So Oatly started selling t-shirts that said “I totally hated that Super Bowl commercial” that you could buy on their website. They’re willing to poke fun at themselves. And I think that that has also made them stand out in the alt milk world, which tends to be sort of more virtuous as a market.
Kira Bindrim: Paint me a little picture of oat milk popularity today. We’ve been talking a lot about how it’s big in the US. It’s available in American Starbucks, is it also popular around the world?
Sarah Todd: It is. And one of the key strategies that Oatly in particular has used to popularize oat milk is introducing people to it via their favorite coffee shops. So it has partnerships with Starbucks, not just in the US, in China as well. Recently, KFC in China started selling oat ice cream as well. So one of the best ways to get people really interested in oat milk is via the coffee shop model, especially hipster coffee shops, which is especially where Oatly concentrated when it was initially rolling them out in the US and elsewhere. It’s taken off, especially in Western Europe, it’s very popular. And Oatly again dominates the oat milk market in Western Europe. I think in Sweden it has 53% of the alt milk market share as a whole. Sweden is where it’s from originally. So it’s popular in Europe and then Oatly also has a presence in Asia, including in Hong Kong and in mainland China. They recently opened a manufacturing plant in Singapore that’s going to help them further distribute in Asia. So those are the main markets where it’s taken off right now, but I think that it could be even more of a global phenomenon.
Kira Bindrim: And for generally the same reasons like its lactose tolerance, taste, sustainability?
Sarah Todd: Exactly, very similar. I think that it has, in some ways, an easier climb to make in Asia, because already people in Asian countries generally consume less dairy. So it’s more of something that people are acclimated to.
Kira Bindrim: Other than Oatly, who else is in this game now? Like it’s a big market, as we’ve been talking about. Is “big milk” in the oat milk space now? What is the sort of competitive landscape look like?
Sarah Todd: Yeah, so lots of big brands are getting in there, off the top of my head, Danone, Chobani, HP Hood, which is a big American dairy brand. So lots of people are getting in on the game because they see the market opportunity. That’s something that Oatly is aware of, and a little worried about, they confess in their IPO filing, because these bigger brands have far more resources. But at the same time, what Toni Petersson has said is that he’s confident that they have the sustainability and just the authenticity that we know really appeals to a lot of Gen Z / Millennial types. They can make a claim potentially, to caring about the environment that other bigger brands can’t.
Kira Bindrim: I would love to talk about what I think of as the milk wars, which is the opposition from “big dairy,” as it were. Tell me a little bit about the kind of opposition, or how it’s shown up, mostly against Oatly but in general against the industry?
Sarah Todd: Yeah, great question. So the milk wars are on and they’re big. So one of the big concerns from the dairy industry has to do with the adoption of the word milk itself. So Oatly in Sweden is not legally allowed to refer to itself as milk. Another issue in Europe has been using words that we typically associate with dairy, like rich or creamy. So that’s something where recently the EU made a legal decision on a petition from big dairy Europe version. Big dairy was arguing that oat milk should not be allowed to use those adjectives like richer, creamy. Ultimately, oat milk won, they do get to call themselves milk, they do get to use the words richer, creamy. But it was indicative, I think of the very real threat that the dairy industry feels from not just oat milk, but plant based milks as a whole.
Kira Bindrim: Do you feel like there’s any legitimacy to this argument? Like, imagine there’s a spectrum of arguments. And on one end of that spectrum, is maybe the argument that no one can call themselves a sandwich cookie, except Oreo. That’s their gambit. And then the other end of that spectrum is that no one other than a pharmaceutical company can describe what they’re producing as a drug that can help you? Where does the big dairy argument fit on that? Is it much more Oreo or much more big pharma?
Sarah Todd: I would say, from my perspective, I think it’s more Oreo. I think that mostly big dairy is worried about losing the stronghold that they’ve had on the public for a long time. And as more and more alternatives pop up, they’re just doing what they can to try to capture their business or make sure that they don’t lose business. And that’s understandable from an economic perspective. But it doesn’t mean that as consumers, I think that we should have any reason to be like “I side with big dairy, don’t say milk.” I think it’s fine.
Kira Bindrim: If the last few years are any indication, plant based alternatives, not just of dairy, but of meat, and all kinds of foods that are not necessarily great for the environment and how they’re produced, are kind of here to stay. Do you think there are any lessons in oat milk, like anything that we have learned about how to get people to choose those products or get industries to adapt to these kinds of shifts?
Sarah Todd: Yeah, I think one lesson that we’ve learned from oat milk, as well as brands, like Beyond Meat and Impossible Foods, is that people are willing to try plant based alternatives to meat and dairy, but it has to taste good, which shouldn’t be revelatory, but I think is. For a long time I was a vegetarian, for something like 20 years, and a lot of the veggie burger options were just like, oats and beans slapped together with a bit of wilted lettuce, and it was not that appealing. So I think that one lesson is make sure that your product tastes good. I think another lesson has to do with just how marketable sustainability really is. And there are some issues with that. For example, I mentioned earlier Oatly labels its cartons with its carbon footprint, which is generally a good idea, but there’s no standardized way to measure what your carbon footprint is. Also consumers don’t necessarily know how to interpret it. So ideally, maybe we would come up with a system sort of similar to movie ratings, but for carbon emissions. All that is to say, I think that those are the two big takeaways: taste good, be sustainable. And if you can be a little, what’s the right word, not non-virtuous, but not superior, in the way that you market it, I think that that’s big too. I think that what we’re seeing right now is that a lot of people aren’t in a place where they’re ready to give up meat or dairy completely, but they are willing to reduce their consumption. So the more that brands learn how to market themselves as appealing to that much bigger audience of people who are looking to cut back a little versus people who are looking up to give it up entirely, I think that’s a winning strategy.
Kira Bindrim: It’s interesting that you say that, because it reminds me a little bit of the conversation about cash that I’ve been having with our colleague, finance reporter John Detrixhe, and one of the big takeaways of that conversation is the thing that will ultimately change people from cash to digital payments is merchants. It’s that you go to a store and that you will be buying something with a card or ultimately your phone, because that’s more convenient, versus what probably wouldn’t be effective is if someone just stood up and said, “let’s all switch off of cash now.” And I feel like there’s kind of parity here. What will win this fight between alternative milks or regular milk is Starbucks, is your local coffee shop, because you’ll start to see alternatives there, you’ll start to see more alternatives, and at some point, people are just going to be like,”let me try one. I’m interested in what it’s like.” That ubiquity is going to kind of win, not the fight like I don’t the regular milk is going anywhere, but we’ll make this landscape less fraught as time goes on, and people just get used to these things.
One more question for you. What comes after oat milk? What is the next hot, new milk that we’re gonna need to know about?
Sarah Todd: Yeah, so I have two potential candidates that I want to highlight. One is hemp milk, which I mention, because it is similarly rich and nutty, and has a lot of natural fats in it, all of which tends to mean it’ll taste good. And two, it’s similarly a very sustainable crop. So if you’re coming from the environmental perspective, that’s a winning one.
Another possibility is milk, itself being the next milk. And I mention that because there was a very fun article in New York Magazine few weeks ago. The headline was something like “hot girls are drinking whole milk now.” And the gist of it was that we’ve circled all the way back around, and that choosing milk at your coffee shop or using whole milk in your cereal is sort of an act of quiet rebellion, I believe in the words of the article, that people can do in a similar way to maybe like having the occasional cigarette but not as dangerous, not comparing milk to cigarettes.
Kira Bindrim: So by having half and half in my coffee, I’ve really come like, on a rollercoaster ride of this opinion. I’m actually cool. I’m trendy.
Sarah Todd: You might be cool. Yeah. My friend Deena Shanker, who’s a food reporter at Bloomberg, had a masterful tweet a while back that was about how Oatly has sort of completed the circuit from being trendy to being normal and boring. So what was once trendy is now just standard, and milk itself is cool again.
Kira Bindrim: Milk is the new milk. Thank you for joining me, Sarah. This was a fascinating conversation.
Sarah Todd: Thanks, Kira.
Kira Bindrim: That’s our obsession for the week. This episode was produced by Katie Jane Fernelius. Our sound engineer is George Drake, and the theme music is by Taka Yazawa and Alex Sukira. Special thanks to Sarah Todd and Alex Ossola in New York. If you liked what you heard, please leave a review on Apple podcasts or wherever you’re listening. Tell your friends about us! Milk that contact list for potential listeners. Then head to www.qz.com/obsession to sign up for Quartz’s weekly obsession email and browse hundreds of interesting backstories.