China Food

Enter more than 10000 coffee shops, or consider building factories in China! We had a chat with the top management of oatly milk

In its third year in the Chinese market, oatly, which recently received $200 million in new financing and was rumored to be planning an IPO, is planning a new game.


“Today, China has become one of oatly’s most important growth markets in the world.” “From the first bottle sold two and a half years ago, we expect to see nearly 100 million bottles next year,” Zhang Chun, President of oatly Asia, said at a recent botanical theme forum

Zhang Chun, President of oatly Asia

After the meeting, Zhang Chun further talked about the future planning of China business, including channels and production capacity, as well as the story with shareholders such as China Resources Group. Now, let’s have a look.




Coffee shops may be the first place for most Chinese consumers to come into contact with oatly products. But in fact, the first stop of “net red” oat milk in China started from the supermarket. It wasn’t a smooth start, though.


Zhang Chun, who was in charge of introducing oatly into China, recalled with emotion that when it entered the Chinese market in 2018, oatly first entered Ole, a high-end boutique supermarket owned by China Resources, but “basically no one was interested in it.”.


In this regard, he believes that, on the one hand, because of the low recognition of the product, oat milk is simply regarded as “foreign soybean milk”. On the other hand, it is very difficult to find the product positioning. “We put our products in the milk area, beverage area, breakfast area, or food area. You don’t know which category your real identity belongs to.” Zhang Chun said.

After comprehensively considering the three factors of products, consumption scenarios and consumer groups, oatly decided to change its approach: starting with boutique cafes.


Zhang Chun said that in terms of products, oatly already had a Oatmeal Milk with coffee, which could provide product strength protection. From the perspective of consumption scenarios, considering that coffee drinking is a global consumption behavior, and the Chinese market can learn from oatly’s experience in developing European and American markets.


A deeper reason behind this may be that boutique cafes share the same group of consumers as oatly. Many of the consumers in boutique cafes are returnees, foreigners and employees of foreign-funded enterprises, Zhang told the snack agency. These groups not only advocate coffee culture, but also have been exposed to oatly products when they live or travel in Europe and America.


Snack reps learned that thanks to the promotion and brand exposure in boutique cafes, oatly has entered more than 2000 cafes in only 5-6 months. Later, some larger catering and coffee chains began to find oatly to discuss cooperation.


With the establishment of boutique coffee shop, oatly even won a “big customer” in China this year: Starbucks, the world’s largest coffee chain. According to Zhang Chun, OATLY, including Starbucks, has entered more than 10 thousand cafes in mainland China. At present, among the channels developed by oatly, catering accounts for a large part of sales, and there are also retail, e-commerce and special channel.


In oatly’s China growth story, it is worth mentioning the shareholder China Resources Group. As early as 2016, oatly received investment from China Resources wellin Health Investment Co., Ltd., a joint venture between China Resources Group and Belgium investment company verlinvest.


Even in the early development of oatly in China, the “shadow” of China Resources Group can be seen many times. For example, Ole supermarket, the “first stop” of oatly, is owned by China Resources. Shortly after entering China, oatly and Pacific Coffee, a coffee chain affiliated to China Resources, reached a cooperation.

Zhang Chun

What “role” did China Resources play in oatly’s development of the Chinese market? Zhang Chun did not give a direct response to the questions raised by snack food agents. He only said that oatly is an independent company, and shareholders will help oatly when it is in need.


“When we have a need, we will go to our shareholders for help. But basically, what our own team can do is not trouble shareholders. ” He said.




Today, oatly is not satisfied with only doing a good job in the coffee shop business. In the face of market changes such as the transfer of some coffee consumption to families or offices caused by the epidemic, oatly should also increase its efforts to develop the C-end market.


This time, oatly intends to focus its “firepower” on e-commerce. Zhang Chun told xiaoshidai that when expanding the C-end market, oatly plans to put its main position online, and will also enter some offline retail channels.


“Online e-commerce will be a major channel in the future.” Zhang Chun said that this is because online channels can provide space for communication with consumers, and the cost of delivery is lower than that of offline channels. In addition, oatly will also invest resources to build a digital and online consumer education platform.


In fact, this year’s Chinese plant market has experienced “explosive growth”.


According to the data from the star chart, in the first half of the year, the market sales of Chinese plants increased by 158% on a year-on-year basis to 873 million yuan. Among them, plant drinks accounted for 63.10% of the total. The “2020 plant protein beverage innovation trend” released by tmall in July shows that the growth rate of plant protein beverage market will reach 800% in 2020, and the number of buyers will increase by 900%.


In addition, in terms of products, Zhang Chun revealed that oatly will develop more new products and formulas for C-end and develop more consumption scenarios.


Specifically, oatly will introduce more existing products from Europe and America, develop new products based on Chinese consumers’ taste preference, and continuously upgrade products. “This is our overall plan for the Chinese market in the future. We will enter more scenes and enter thousands of households.” He said.


It is worth noting that oatly also has the idea of building local capacity in China. “At present, we have also considered building factories in China, but the exact timetable has not been worked out yet.” Zhang Chun revealed.


Xiaoshidai learned that at present, the products sold by the company in China are all imported. In addition, the Singapore plant being promoted by oatly is expected to be completed next year.


Although oatly has not yet disclosed the detailed arrangement of Singapore plant and China’s capacity. However, it is certain that if oatly’s Singapore plant will supply large quantities to China, or oatly has established local production capacity in China, it is expected to help reduce costs and thus bring room for price reduction, making its oat milk price more competitive.



Compared with oat milk and even plant protein drinks on the market, oatly is not cheap indeed. In this regard, Zhang Chun said that oatly was “certainly not the most expensive” among the imported healthy plant drinks, and disclosed that the possibility that oatly prices would change in the future would not be ruled out.




However, oatly will also face a lot of pressure if it wants to occupy a place in the mass market of Chinese plant protein drinks.


In addition to the emergence of more new local oat milk brands such as ozak and wheat Oye in recent years, oatly also has to face the stronger “rival” of soybean milk. Whether from the perspective of Chinese consumers’ acceptance or price, soybean milk is a kind that more people are used to drinking and generally has lower price.


In Zhang Chun’s opinion, oatly’s own advantages lie in three aspects compared with other oat milk brands and vegetable protein drinks.


One is that it has patented enzymatic hydrolysis technology, which can better retain the dietary fiber “β – glucan” in oats. Secondly, oatly’s positioning is “lifestyle brand”, focusing on brand building and communication with consumers. Finally, oatly also focuses on combining products with local consumption habits, such as tea. According to the company, through oatly R & D Studio development and co creation with consumers, it has thousands of product application formulas.


“We very much welcome more vegetable protein drinks, vegetable protein foods, and some of the same ideas as us to expand the market together. There are a lot of people walking together, so you won’t be lonely. ” Zhang said oatly hopes to be a “three good student” brand, which is good for consumers’ health, good for consumers’ mood and good for the natural environment.


Talking about the future of China’s plant-based food and beverage, Zhang Chun said that he was very optimistic about the development prospects. “The need for health, environmental protection, light food, vegetarianism, including fitness. Various consumption scenarios, consumption habits and the needs of consumers will drive the market, so we think that the future is a very large market. ” He said.


However, Zhang Chun also raised three major challenges in the industry, including how to balance health and delicious food without adding a lot of extra ingredients, the need to issue industry standards to ensure healthy competition and development, and the change of consumer cognition and behavior. He believes that the premise for an industry to flourish is to have leading technology, brand and industry rules.


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