OATLY's path is becoming increasingly smooth. Founded in 1994, OATLY was unknown for its first 20 years. According to third-party data company Statista, OATLY's sales in 2012 were only 269 million Swedish kronor (about $28 million); in 2019, financial reports showed OATLY's revenue was $204 million, and in 2020 revenue doubled to $421 million, with products sold in over 60,000 retail stores and 30,000 coffee shops across more than 20 countries and regions. In fact, OATLY originated in Sweden and entered China in 2018, then rapidly rose to become a hot "star" brand in just about four years, completing its transformation from 0 to 1. From being unknown to widely recognized, OATLY is appearing more frequently in public. On November 10, the 106th National Sugar and Wine Fair officially opened, and OATLY, as a representative brand of oat milk, made a grand appearance at this large-scale and authoritative industry exhibition, conveying to consumers a desire for a better life and a healthy, balanced, and sustainable lifestyle.

01 Different Oat Milk: OATLY Continues to Innovate in Products From November 10 to 12, 2022, the 106th National Sugar and Wine Fair was held at the Western China International Expo City and the Century City New International Convention and Exhibition Center in Chengdu. Known as the "barometer" of China's food industry, the National Sugar and Wine Fair began in 1955 and is one of the oldest large-scale professional exhibitions in China. OATLY brought its full line of products to the fair. The most eye-catching were the newly launched 250ml portable oat milk series this year, including four varieties: original low-fat, original rich flavor, chocolate flavor, and Barista Edition. Using unique enzyme technology, these products retain soluble dietary fiber from oats, enhancing the oat aroma and richness. With 0 lactose, 0 cholesterol, and 0 trans fat, these ready-to-drink products further open up daily scenarios such as breakfast, office, and afternoon tea. Additionally, the product range has been enriched and expanded with the launch of oat ice cream this year—"OATLY Soft Serve". At the exhibition, the cup-style oat ice cream series featured four flavors: original, passion fruit, hazelnut, and latte; the stick ice cream series also had four flavors: original, latte, pistachio, and hazelnut. All are made from selected imported oats, with a unique oat grain aroma, delicious yet not overly sweet, and are 0 lactose and 0 trans fat. With multiple flavor options, consumers can see more possibilities of plant-based oat milk. Finally, OATLY INSIDE products, including oat milk tea, oat flakes, popcorn, and two oat milk teas launched in collaboration with "Lan Fong Yuen" under Xiangpiaopiao, were also showcased at the fair, attracting many visitors to inquire and taste. Additionally, special drinks were offered at the booth, including oat lattes made with Barista Edition and oat milk tea made with tea master. It is evident that OATLY is continuously innovating on the product front, standing out in the competitive beverage market with its health concept, low-carbon environmental protection, and unique taste, growing from an obscure niche brand to "different oat milk".

02 Scenario Substitution for Category: Establishing Sales Logic Currently, OATLY has been in the Chinese market for four years. During this year's 618 shopping festival, OATLY's omni-channel sales exceeded 53 million yuan, becoming the sales champion of plant-based protein beverages on e-commerce platforms such as Tmall and JD.com. How did OATLY enter the Chinese market and become a leading brand in this category? Let's look at three dimensions.

Avoiding the C-end Red Ocean, Entering from the B-end When OATLY, originating from Northern Europe, first came to the Chinese market, it faced challenges. The "challenges" mainly stemmed from Chinese consumers' lack of awareness of oat milk and insufficient market education, making it very difficult to break into the market from the C-end. So OATLY took a detour, starting from the B-end and focusing on coffee shop scenarios. Latte coffee requires a milk base, but some people are lactose intolerant, and with the popularity of vegetarianism, oat milk became an ideal coffee companion. Finding this entry point, OATLY centered on Shanghai and invested resources in niche boutique coffee shops and chain coffee shops, naturally popularizing the oat milk category. Through channel focus, scenario aggregation, and audience concentration, the market gradually opened up.

Everything Can Be OATLY In 2021, OATLY released the "OATLY INSIDE" logo. Merchants using oat milk as an ingredient can display this logo and receive product development support, indicating deeper cooperation. So this year at the Sugar and Wine Fair, we saw OATLY INSIDE products, including oat flakes, popcorn, and two oat milk teas launched with "Lan Fong Yuen". Among them, the "Lan Fong Yuen" products follow OATLY's health-oriented style, using oat milk as the base, adding water, tea, and sugar, emphasizing 0 lactose, 0 cholesterol, and 0 trans fat, bringing oat-based products to a broader audience.

Innovative Products, Focusing on the C-end After successfully establishing brand awareness in the B-end, OATLY then targeted the C-end. To meet the changing purchasing scenarios of retail consumers, it continuously reduced packaging size. At the Sugar and Wine Fair booth, we saw OATLY bring the "oat milk + coffee" model to retail channels, launching the 250ml OATLY Barista Edition portable series, which sold over 1 million bottles during this year's 618 period. This product directly opens up C-end consumption scenarios through small packaging, especially the rich flavor, which fits the breakfast scenario; other flavors are more suitable for daily scenarios like office and afternoon tea, increasing frequency and adding different consumption scenarios. It can be seen that OATLY creates unlimited growth space through scenario-focused tactics, entering with a single product, occupying key regions, and gathering target audiences through scenarios. When the category's activity and aggregation in the market are greatly released, it will also accelerate its entry speed. In addition, another major move to focus on the C-end is the oat ice cream mentioned earlier, expanding the product matrix to penetrate more consumption scenarios and reach more consumers.

03 The Plant Milk Track Begins to Crowd: From Niche to Mainstream Today, the Sugar and Wine Fair has officially opened. At this exhibition, OATLY is showcasing at booth 12-13B004T in Hall 12 of the Western China International Expo City in Chengdu. All the products mentioned above are on display, and all attendees can see OATLY's style. Indeed, OATLY's rapid rise has become a bellwether for the development of the plant-based track. It can even be said that OATLY has always been a leading pioneer in the plant-based category, from being unknown to a crowded track. According to the "2020-2025 China Plant-Based Protein Beverage Industry Market Demand and Investment Planning Analysis Report" released by Qianzhan Industry Research Institute, the plant milk industry is expected to maintain an average annual growth rate of over 20% in the coming years, with the market size expected to exceed 300 billion yuan by 2025. It is evident that plant-based is undoubtedly the hottest keyword in the food and beverage industry, and oat milk, as a representative of plant-based protein beverages in recent years, has attracted much attention. In 2019, driven by global consumer attention to health and sustainable development, oat milk and plant-based meat emerged in the Chinese market, and the food and beverage industry ushered in the "first year of plant-based". Subsequently, in 2020, the market grew rapidly, with various plant milks such as coconut milk, soy milk, and almond milk emerging one after another, which can be called the "year of plant-based explosion". Under the rapid market development, OATLY released its Q2 and first-half 2022 fiscal year performance report on August 2. Overall revenue in the first half was $344 million, up 20.2% from $286 million in the same period last year. Among them, the Asia-Pacific region contributed significantly. The Asian market was the fastest-growing market for OATLY's revenue, with Asian revenue increasing 66.3% year-on-year to $43.7 million, with about 58% of revenue coming from food service. Notably, in the Chinese market, OATLY's e-commerce channel sales continued to rise, and retail channels accounted for more than half of the company's revenue, reaching 59.75%. Obviously, the increase in retail share means that OATLY is gradually moving beyond coffee shops and other food service channels, and from the C-end perspective, oat milk is being accepted and recognized by more and more consumers. Undoubtedly, from niche products to mainstream culture, OATLY is the best case.

Final Thoughts: From November 10 to 12, 2022, the 106th National Sugar and Wine Fair was held at the Western China International Expo City and the Century City New International Convention and Exhibition Center in Chengdu. OATLY's booth is located at 12-13B004T in Hall 12 of the Western China International Expo City. At this exhibition, all products were displayed, including the 250ml portable oat milk series, oat ice cream—"OATLY Soft Serve", "OATLY INSIDE" products including oat milk tea, oat flakes, popcorn, and the Lan Fong Yuen series oat milk tea, as well as special drinks. Friends interested in cooperation are welcome to visit the booth for consultation.