What was the Oatly scandal about?
At the end of last year, Oatly (one of- if not the most- globally known brand of oat milk) suffered major backlash when it became exposed that one of their investors is Blackstone- a controversial private equity firm linked to Amazon deforestation and Trump’s 2020 campaign. Needless to say, both of these things are quite the opposite of what a lot of Oatly’s loyal customers stand for.
When Oatly’s affiliation with Blackstone made its way into public knowledge, customers immediately began boycotting the oat milk brand. In other words, Oatly was ‘cancelled’.
Cancel Culture: What is it?
According to Urban Dictionary, cancel culture can be defined as:
“A modern internet phenomenon where a person is ejected from influence or fame by questionable actions. It is caused by a critical mass of people who are quick to judge and slow to question. It is commonly caused by an accusation, whether that accusation has merit or not. It is a direct result of the ignorance of people caused by communication technologies outpacing the growth in available knowledge of a person.”
Background on Oatly
Out of all non-dairy milk, oat milk has the lowest environmental impact- as opposed to almond milk, for example, which requires gallons of water for its production.
It’s safe to say that Oatly, as a brand, has single handedly been a game changer in the food industry. Its rising popularity has created a new category of ‘plant-based milk’, that has been widely installed as a staple on the shelves of large chain supermarkets.
Because green enterprises are incredibly difficult to make profitable, they often have much less of an opportunity to receive big funding. As well as this, they also face greater uncertainty in entering markets that have been long dominated by much more profitable enterprises (ie. profitable at the expense of the planet’s resources).
Not only is Oatly’s success story a major win in itself, but also pushes other businesses in the industry to see that being green can totally be profitable. When Oatly blew up, more non-dairy alternatives cropped up to compete against the big powerhouse. This has allowed for more milk replacements to enter mainstream supermarkets.
Year after year, when more people increasingly convert from regular milk to oat milk (or other non-dairy milks), it becomes clear that this wave, propelled by Oatly, has changed consumer habits big time.
Oatly’s response to Blackstone Scandal
After the scandal, Oatly addressed their reasoning behind why they chose to work with Blackstone. Below are a few snippets of their response.
“Back in the day, when we were just a tiny oat milk company in the Swedish countryside, we asked ourselves this question: What can we do to create the greatest amount of change to positively impact the planet? Should we continue to sell our products through specialized health, organic and vegan stores since they had always supported us? Or, should we be where the people are, in the supermarkets?”
Here, Oatly highlights their aim, which is to target the majority rather than the tiny fraction of people who do their shopping at bio-organic-vegan stores (which goes without being said, are majorly unaffordable and unrealistic to shop at everyday)
“But what would happen if we could show the supermarkets that by collaborating, we could both increase our and their earnings while opening up a potential new category? Our bet was that that would result in better shelf placement for plant-based products, ultimately resulting in more people discovering them, learning about the benefits and then adjusting their eating habits. Since we are a sustainability company looking to create the most change possible, we went with the supermarkets. And so far, it seems our bet is starting to work.”
Whilst it’s true that Oatly would like to ‘create the most change possible’, they are still a business and therefore care much about profit. To generate the highest possible profit, they need a large customer base (aka. in the supermarket).
By collaborating with supermarkets, Oatly was able to de-niche-ify oat milk. This way, more people could be offered a sustainable alternative, without having to pay a premium price for it.
Now, back to Oatly’s (very valid) supermarket analogy…
The same reasoning prompted us to turn to Blackstone for a conversation about securing sustainable funding. Blackstone is like the biggest supermarket of the private equity sector. We thought that if we could convince them that it’s as profitable (and in the long-term even more profitable) to invest in a sustainability company like Oatly, then all the other private equity firms of the world would look, listen and start to steer their collective worth of 4 trillion US dollars into green investments. Today, only a tiny fraction of all that venture capital ends up in sustainable investments.
This leaves us to question… is it ethical for bad money to be doing a good thing?
Private equity firms, such as Blackstone, only ever support what customers ask for. Before, most (if not all) of Blackstone’s investments went straight to unsustainable initiatives. Now that the demand for environmental consciousness is seeing an increase, private equity firms are willing to invest in companies, like Oatly, that fulfill this relatively new demand.
As the demand for Oatly continues to skyrocket, funding is needed for them to continue to expand. If Oatly doesn’t go to the ‘biggest supermarket’, and instead opts for another (eg. investors that are perhaps better suited to their values), this will be at the expense of their growth aim. In simpler terms: if they don’t go to the big guys with big money, there is no opportunity for BIG growth. And growth, of course, equals profit.
By avoiding Blackstone, or any other ‘big supermarket’ for that matter, Oatly will find itselves being the underdog of this capitalist superstructure, of private equity, that will continue to invest its fortune into highly profitable- not to mention, highly unsustainable- ventures.
Why is Cancel Culture Harmful?
This scandal spotlights the repercussions Oatly faces, that no other non-green business ever has to. It seems as though only when given customer approval, can green initiatives pursue the same (global) growth and profit aims as of any other business.
By limiting the extent to which green businesses can earn ‘big’ money, we are in danger of creating a ceiling for how far sustainable and purpose-driven businesses can go.
Nowadays, there is a lot of pressure on green companies to be 100% sustainable. In fear of being ‘cancelled’, they have much less autonomy/flexibility to grow bigger, because this entails having to compromise part of its identity. By holding Oatly to an unattainable standard of being ‘morally superior’, the bar is set so high that they aren’t even given a chance to expand their reach.
A question to ask ourselves: Should we continue to hold companies to unattainable standards, so that we can keep our moral ‘halo of environmentalism’ and feel better about ourselves? … Or can we finally allow ourselves to compromise?
Private equity firms cannot be avoided. Instead, as customers, we should be championing the more sustainable investments that they make, in order for them to see the monetary benefits (as they often only do care about the money) and therefore invest in them more, which will eventually create a more sustainable future.
We could be the most conscious consumers ever, but in the end we often forget that the world still needs to catch up. We should be able to push our moral superiority aside to see that ‘teaming with the bad guys’- in favour of an opportunity for growth/profit and hoping to make products more accessible to all- isn't necessarily a bad thing.
In the environmental community, moral integrity can oftentimes be to our detriment, in that it makes us lose sight of the bigger picture, the greater purpose that Oatly stands for, which is to make a greater number of people make the sustainable switch. Because in the end of the day, many people consuming even a bit more sustainably is more valuable than a tiny exclusive group consuming 100% sustainably.
Needless to say, there is a lot of hypocrisy in the rhetoric of sustainable consumption.
Who is Most Affected?
The volatile reactivity of customers, when green companies get funding from sources that don't necessarily match their ideals, will definitely push investors away. A recurrence of this kind of backlash will drastically hinder opportunities for sustainable products to move from exclusive groceries into mainstream supermarkets. This shuts down the accessibility of sustainable products at lower price points; in other words, we no longer have an affordable sustainable option. In the short term, ‘cancel culture’ can be a set-back to green consumer habits, and in the long term, make sustainable products even more inaccessible and even more expensive than they already are.
Customers will continue to be faced with unaffordable pricing, which makes them feel as though they can’t make the switch to a more sustainable lifestyle. It goes without saying that this disproportionately disadvantages the low-income working classes, who may otherwise be unable to afford such products.
What now?
Oatly receiving funding from Blackstone ironically isn’t a Black and White issue. If anything, it breaches the grey area (aka. an ideal battleground for dispute).
Whilst there’s no ‘right’ answer, it is important to bring attention to the nuance that is often overlooked when ‘cancel culture’ makes it so easy to jump to quick conclusions- often leading to the classic bandwagon effect of boycotting Oatly altogether.
There are so many complexities to creating sustainable brands that aren't all the time obvious to consumers. As much as it is natural instinct for us to distinguish ‘right’ from ‘wrong’, people read controversial headlines and are quick to place companies into good/bad categories. As a result, ‘cancel culture’ shuts down important conversations, as well as *bigger picture* and *long term views* on the subject matter.
Change is uncomfortable, and is often met with resistance. At the end of the day, the most important takeaway of this blog post is that we should (always!) question the ‘dominant’ or ‘popular narrative’ of a controversy, keep conversations ongoing and keep educating ourselves. Hopefully, this will prevent us from hopping on trends of hating, and instead create better-informed opinions for ourselves on important issues, like the Oatly scandal. ‘Cancel culture’ absolutely needs to be taken seriously, and this instance makes a point that such internet trends have real consequences that could potentially be a setback for our journey towards a more environmental future.
