CEO of plant-based dairy alternative, Oatly, blames ‘doom and gloom’ climate talk for US sales slump – Negative talk around climate change & ‘too much greenwashing’ are putting consumers off sustainability

Oatly’s chief executive said greenwashing and “doom and gloom” talk around climate change had put US consumers off sustainability, as sales of plant-based dairy alternatives go into reverse after years of growth.

“In the past, when people were talking about climate change or sustainability, it was in a doom and gloom, in a punitive, in a very negative . . . way. And people got fed up with that,” said Jean-Christophe Flatin, chief executive of the oat drink maker.

Sales of plant-based milk in the US declined by 5 per cent to $2.8bn in 2024, while dairy milk sales rose by 1 per cent, according to trade group the Good Food Institute. Plant-based milk makes up about 14 per cent of total milk sales in the country.

Like much of the plant-based food and drink industry, New York-listed Oatly has struggled to sustain its rapid growth as inflation squeezes disposable incomes.

Its problems have been exacerbated by consumers prioritising food and drink that’s high in protein, such as cow’s milk, over products that boast a lower environmental impact. There has also been a broad shift away from ultra-processed products, such as oat milk.

Oatly shot to popularity in the 2010s, boosted by provocative ad campaigns and slogans, such as “it’s like milk but made for humans”.

The Swedish company attracted celebrity investors including Oprah Winfrey, Jay-Z and Natalie Portman, before a surge in sales during the Covid-19 pandemic propelled it to a much hyped, $10bn New York IPO in 2021.

But Oatly quickly ran into difficulty. A string of production problems left key customers such as Starbucks short of oat milk. Meanwhile, competitors sprung up and took advantage of its mis-steps to win market share.

In its four years as a public company Oatly has racked up cumulative pre-tax losses of more than $1.2bn. The company’s shares have lost 97 per cent of their value, giving Oatly a market capitalisation of just $411mn.

At its last trading update Oatly cut its revenue expectations for the year — from growth of between 2 per cent and 4 per cent to growth of no more than 1 per cent — and announced a strategic review of its China business.

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In 2024 Oatly paid $9.3mn to settle a lawsuit filed by its own investors alleging it had overstated demand for its products and overplayed its sustainability credentials.

Flatin said generally “there has been too much greenwashing”, which had contributed to a rise in consumer indifference on environmental issues.