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I

From featured cooperation to supply
hegemony

Oatly was one of the first European and American
plant-based milk brands to enter the Chinese market.
In the 1990s, Rickard Öste, a professor at Lund Univer-
sity in Sweden, discovered an enzyme that could con-
vert oats into oat milk when he worked on lactose in-
tolerance. In 1994, he co-founded the company with
his brother Björn Öste. In 2012, Toni Petersson took
over as the CEO and proposed the use of oat milk as a
new type of “coffee mate” in cafe chains, making Oatly
a household name. In 2018, Oatly entered China through
Pacific Coffee and Ole’, a boutique supermarket owned
by China Resources Vanguard. Only a year later, it had
successfully penetrated large beverage chains such as
Starbucks and Heytea, and took its first steps toward
independent cafes. In 2020, Oatly completed an annu-
al sale of USD 420 million, approximately double the
previous year’s sales. By September 2021, its revenue
had already reached $457 million.
When this brand had almost hooked Chinese
customers, new participants joined
the exclusive race for plant-based
milk one by one, from minor
figures in the UK and

Danone’s Alpro to domestic brands such as “Plant Label” major battlefield, as the marketing and advertising de-
and “Wheat Oye”. Today, we still hear about the estab- partments devote their resources in these fields. Small
lishment of new plant-based milk brands and investment brands also struggled to survive. “Cooperated and ex-
and financing information from time to time. According clusive oat milk” has been a history, and the new norm
to the think tank Equal Ocean, 10 local plant-based milk is extra payment for another plant-based milk. Com-
startup brands have taken 17 rounds of financing be- pared to new style tea drinks and ice cream which
tween July 2019 and August 2021. They include oatoat continue to update based on seasonal fruit and trends,
and Coco 100 which received 3 rounds in one year; specialty coffee has witnessed a hegemonic supply chain
Cereal Planet, Plant Label and Daily Box which com- dominated by plant-based milk.
pleted 2 rounds within 6 months; and Ocak which has However, as shown in Deloitte China’s White Paper
raised hundreds of millions in a single round. The bill- on China’s Freshly Ground Coffee Industry published
board near the bar counters are also occupied. in 2021, while the plant-based milk category dominated
Oatly’s recipe to success can apply to most of the the keywords of the year for the coffee industry, the
brands of its type. In other words, many brands have penetration rate of oatmeal lattes in the milk coffee
already positioned themselves as “a mate to coffee”. category was only 7 percent in 2020, and consumers are
Therefore, cafes and drink stores have become their very less likely to order plant-based drinks.

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