Oatly's Challenger Brand Recipe for Bold Sustainability Claims

Ever been nervous about making an on-packet sustainability claim?

Today, we're bringing in a sustainability messaging veteran, Shaunagh Duncan, Head of Sustainability E&I at Oatly to help us navigate the dark and dangerous world of sustainability comms.

Oatly is a challenger brand, raising the bar on leveraging sustainability as a value driver. We uncover how they approach balancing bold and accurate messaging.

Oatly’s Challenger brand playbook:

Shaunagh’s mantra, "You cannot disrupt an industry by playing it safe," is the cornerstone of the Oatly approach. Oatly has leveraged sustainability as a competitive advantage by:

• Confronting the competition: Oatly thrives from confrontation. They’ve positioned themselves as the 'good guys' fighting the enemy (aka the dairy industry). Their clear comparison of carbon footprints, like the 58% lower CO2e impact of Oatly Barista sold in the UK compared to British cow's milk is a powerful narrative that resonates with consumers.
• Leading by example: Oatly goes beyond product comparisons by setting its own ambitious internal targets for carbon reduction and biodiversity.
• Premium positioning: By being loud about the sustainability benefits, Oatly has justified its premium pricing to consumers.
• Strategic focus: Rather than risk spreading themselves too thin, Oatly prioritises its core sustainability focus: carbon reduction. This allows them to focus efforts on becoming the undisputed leader in their field. This is a trend within other challenger brands e.g., Tony Chocolonley focuses on labour rights, LUSH focuses on packaging.
• North Star Metric: Oatly has set a quantifiable goal (avoided emissions) that aligns its sustainability mission (to drive a food system shift) with business value (more money behind plant-based vs dairy).

Creating bold sustainability claims:

The trick to groundbreaking campaigns lies in creating an environment where ideas can flourish. This requires a bedrock of trust and psychological safety, where team members feel empowered to take risks without fear of being laughed out of the room.

Oatly’s approach is unique.

Oatly doesn’t have a marketing team (would you believe it…). Instead, they have an in-house creative team, aptly named the "Oatly Department of Mind Control" (ODMC). This team collaborates directly with other departments e.g., sustainability (vs going through marketing). This ensures ideas align with regulations e.g., the EU Green Claims Code, and business goals while maintaining their creative edge.

?? Tool tip: Shaunagh and the team use a graph ranging from "scared sh*tless" to "f*cking fearless” to determine how punchy they are with their messaging. The sweet spot lies somewhere in the middle, where you can push boundaries without crossing the line.

What about on-pack labels? Is the risk worth it?

Oatly was one of the (if not the…) first brands to add climate labels to their products in 2019. While Product Carbon Footprints (PCFs) are typically used for internal analysis (due to fears of being attacked on methodology and scientific rigour), there's growing pressure to display this information on packaging.

Shaunagh advocates for proactive disclosure:

• It’s not a matter of if PCF disclosure becomes mandatory. It is a matter of when. Get going now and use the first mover status to build trust with your customers.
• Build transparency with clear, simple on-pack labels that can help consumers make informed choices.
• Be honest and open about the flaws in your approach. On-pack numbers have their own challenges. Alternative approaches like a RAG system might be easier for consumers to understand. In the absence of a harmonised approach, it’s better to start imperfectly.

Listen to the full discussion between Saif Hameed and Shaunagh Duncan here: