Tom Hodgkinson on how the litigious Swedish oat milk maker took the basic ingredients of gruel – oats and water – and turned it into a multi-billion dollar company
I don’t know if you’ve been following the fortunes of Oatly, the massive Swedish purveyor of milk substitutes, but they’ve been in the news recently after losing a trademark infringement case against a small English purveyor of milk substitutes called Glebe Farm Foods. It’s an interesting story.
Oatly claimed that Glebe Farm had stolen their look. The company’s lawyers, Gowling WG, argued that customers would get confused and buy Glebe Farm’s oat milk, thinking it was Oatly’s oat milk. Oatly said that the name of Glebe Farm’s product – “Pureoaty” – was too similar to “Oatly”. They also argued that Pureoaty’s blue packaging was too similar to their own blue packaging.
The judge, copyright expert Mr Nicholas Caddick QC, rejected the claims, writing: “I find that there is no likelihood of confusion between the PUREOATY sign and carton and any of the Oatly trade marks and, accordingly, I reject Oatly’s s.10(2) claim against the Defendant.”
When reading the judgement you actually wonder why on earth Oatly’s lawyers thought they had a case. There is simply nothing there.
What is quite odd is that Oatly have incorporated the story in their jaunty marketing. They’ve reproduced the judgement on their website, along with the chatty comment, “enjoy!”
Is Oatly gruel under another name?
What is Oatly, exactly? Well, I realized with a flash the other day that it’s startlingly similar to gruel, the watery porridge served to the inmates of the workhouses of the nineteenth century (they were in fact also served beer, cheese, meat and potatoes but that’s another story), and made famous by Dickens.
The main ingredients in both gruel and Oatly are oats and water. Here’s an 1872 recipe for gruel: “16 ounces oatmeal, 8 pints of water, 4 ounces treacle, Allspice to be used occasionally.” Oatly’s recipe is similar: it’s mainly water with 10% oats. There’s no treacle or allspice – but the Swedes have added rapeseed oil and vitamins. If anything, the 1872 gruel sounds tastier than its modern counterpart.
So why is it that gruel – alongside which the adjective “meagre” is generally used – is widely considered to be the worst and cheapest foodstuff of all time, whereas Oatly is a groovy global brand which floated on the American stock exchange last year, is worth $11.5 billion and whose boss, according to the hive.news website, has a net worth of $58 million?
How did Oatly get so big?
The answer is marketing, money and luck. Oatly’s been going since the nineties but only exploded much later following a relaunch. The judgement relates the story: “In around 2012 and 2013, Oatly started a strategic repositioning and rebranding exercise driven by a new Chief Executive Officer, [serial entrepreneur] Toni Petersson. This resulted in the adoption in 2014 of a new style of packaging.” It’s the faux-authentic packaging we all know.
The brand spent $4.5 million on marketing, with fantastic results: in 2014, they sold 780,000 units in the UK. By 2018, that figure had gone up to nearly 19 million.
Oatly have of course also benefited from a wider consumer trend towards vegan products.
They’ve also been given a lot of money. Chinese state-owned investment vehicle China Resources reportedly owns 55.9% of the brand (see link below). During a 2016 deal, a spokesman said: “China Resources will continue to invest further in Oatly to ensure it remains the foremost oat milk brand.”
Gruel, on the other hand, as well as being terribly named (sack the branding agency!), had the genius of Charles Dickens against it. He gave it its toxic image, and was helped in his mission by the 1968 film Oliver!, where the workhouse boys fraudulently claimed, “all we ever get is gruel.”
Now because Oatly is basically selling oats and water, it’s clearly a business with fantastic margins – water, oats and rapeseed being fairly inexpensive to buy. And there’s none of the expense and inconvenience of milking cows. But Oatly costs twice as much in Tesco. Oatly goes for £1.80 per litre, whereas poor old milk sells for 90p per litre. Entrepreneurs everywhere must be thinking, “I wish I’d thought of that.”
Well done Oatly.
By the way, I think that the correct idler’s response would be to look up a recipe and make your own version of Oatly. We could call it Idly. Or how about Gruelly?
For the full text of the judgement, click here.
To find out more about Oatly’s backers, which include Chinese state-owned investment vehicle China Resources and US firm Blackstone, click here.
These comments were mailed to us after an earlier version of the above piece was sent out as a newsletter. We like to publish a selection and reserve the right to edit them for clarity. Feel free to drop us a line with your thoughts.
How about “Grueidly” as a title?
Best laugh of the day! I make my own oat milk now and again … so it is virtually free … the only bit of effort is sterilising the muslin cloth. Good old oats are such a godsend … there’s no need to cook them to start the day on a comforting breakfast. Just shove a scoop or two In a bowl, cover with milk (vegan or dairy) … add walnuts, dried cranberries, chopped apple etc and enjoy.
I have been one of those who succumbed to the marketing (also I don’t like cow’s milk) but bought mine in bulk from Costco. I stopped, however, when it transpired Donald Trump is an investor in the parent company.
I thought you would be interested to know that your article has convinced a (former) fan of Oatly to make her own milk. My sister has been a devoted drinker of the well-packaged gruel, and so I thought she might find your newsletter interesting. She was so disgusted at what she read that she swore off ever buying their product again and immediately began making her own milk. She’s relieved that she’s converted as she says freshly made nut and oat milks are of a superior quality. Another win for the idlers!
I make my own non-dairy milk, after realising it’s mostly water in the shops! The packaging is all plastic-lined and unsustainable, too.