Oatly shows the billion dollar benefits of going niche

Posted on by Guy Cookson

When creating a new product the temptation is to try and appeal to the largest possible audience.

Go for the mainstream, so the thinking goes, and you have the best chance of making the most sales.

But it is surprising how many success stories are founded on doing quite the opposite.

Rather than casting a wide net these brands have a marketing strategy that better resembles spearfishing.

A narrow target audience is identified and then relentlessly pursued.

In a global marketplace this hyper focused approach can still build into a huge business.

Take Oatly, the alternative milk company from Sweden, which makes a range of products from oats.

This seemingly ultra niche vegan brand has reached a valuation of $2bn (£1.56bn) after it sold a 10% stake to a cast of investors including Oprah Winfrey, Natalie Portman and Jay-Z.

“We are a grassroots brand and wanted to bring in people who are generational voices,” explained Oatly’s chief executive Toni Petersson.

Oatly has been building a reputation as a quirky milk alternative in Sweden since the early 1990s.

Its marketing has played on its divisive taste (after one customer commented “this tastes like sh*t” they printed it on the side of the cartons).

A guerrilla-style campaign on the side of a building in Berlin stated, “We made this ad look like street art so you would like it better.”

In one memorable advertisement the CEO is depicted in an empty field repeatedly saying, “Wow, no cow!” – the stuff of nightmares for diary farmers.

The dogged pursuit of a niche audience appears to be working.

Oatly’s sales almost doubled to $200m in 2019

“When we look at the demography five years from now, we think this is the very beginning of the curve,” says Petersson.

Oatly’s niche appeal enabled it to build a band of passionate and loyal followers that advocate for the brand in a way that few would do for a more obviously mainstream product.

“A brand needs to have a voice,” explains Petersson. “That’s why we can have a conversation with our consumers in a different way.”






A version of this article was published as part of a weekly column by Guy Cookson on marketing, design, trends and strategy in the Lancaster Guardian, Blackpool Gazette and Lancashire Post. See our brand, web design and marketing recent projects.

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