Milking Oats For China

China wants more milk, but the planet needs fewer cows. Why oat and other plant milks could be the solution.

- Eamon Barrett

VENTURE NICHE BARISTA JOINTS are the preferred point of entry into foreign markets for Sweden’s Oatly.

In Hong Kong, its stylized cartons are an increasingly common sight in hipster “third wave” coffee shops. Oatly, which—as its name suggests—creates a milk-like product from milled oats, claims to have partnered with 80% of such coffeehouses in the city. Having already stormed into the southern port, Oatly is beginning an expansion north into mainland China, where a much larger market awaits.

“Some reports say the Chinese government wants to triple dairy consumption in China, and I think we could be very helpful in supporting that development,” says Oatly CEO Toni Petersson. With an office in Shanghai and sales through more than 2,200 Chinese coffee shops and retailers, the 25-year-old company has even coined a Chinese character—the symbol for grass atop the one for milk—to help control the narrative about plant-based milk.

That’s a clever move. EU regulations prevent the oat-drink manufacturer from ​calling Oatly “milk” in its home market. Dairy lobbyists are pushing for similar restrictions in the U.S. However, Petersson insists Oatly won’t trademark its new Chinese character but will keep it open-source to help encourage dialogue around dairy alternatives.