With seasonal lookbooks and a flavour trend report that feels like it came from the fashion industry, Oatly is courting Gen Z to take its oat milk to newer heights. Here’s an exclusive peek behind its strategy.
Fashion, flavour and fibre may as well be Oatly’s new buzzwords.
The Swedish oat milk giant has long been lauded for its innovative marketing and ‘wackaging’ – who can forget that unhinged Super Bowl ad? Some may turn their noses up, but this approach gets people talking.
The problem, though, is that after taking over supermarket shelves and specialty coffee shops across the world at the turn of the decade, Oatly’s momentum has slowed. Its China and US operations have struggled particularly, and while it just recorded its first quarter of profitable growth since its 2021 IPO, the company had been forced to revise its full-year guidance for 2025.
Its performance stateside is symptomatic of the cooling demand for non-dairy alternatives, whose overall sales fell by 5% last year. “It is true that the plant-based category has softened in the US,” concedes Bryan Carroll, UK general manager for Oatly.
“But if you look at the data, this is down to a number of reasons, and actually not because of a resurgence back towards cow’s dairy (or raw milk trends) as has been portrayed,” he tells Green Queen.
So let’s look at the data, then. According to Nielsen retail scanner data, the volume growth of dairy drinks was flat in the 52 weeks to September 6, and declined by 0.7% in the month prior. And though there were pockets of value growth, thanks in part to rising prices of high-protein products, that is slowing too, from 4% in the previous 12 months to less than 2% in the preceding four weeks.
Still, Oatly’s business could do with a strategy boost, which has materialised in the form of its new taste-first approach, inspired by the food-fashion nexus.
The firm has produced two ‘lookbooks’ featuring innovative recipes that showcase the versatility of its products, and published a Future of Taste report highlighting the industry’s biggest trends for 2026. On the menu: fibremaxxing, decaf, East-inspired ingredients, and – of course – matcha.
“We see taste as much more than just flavour. Sure, it’s literally another word for it – but for us, taste represents a frontier for innovation, identity and impact,” says Carroll. “It’s also long been a sticking point for consumers, and we’ve been on a mission to prove that choosing dairy-free doesn’t have to mean compromising on taste.
“We are yet to fully execute the new taste strategy in the US and instead are focused on fixing areas like our structural operations. That being said, Oatly’s volume is still performing better than competitors and the categories. We see our taste strategy working in Europe, and we’re excited to bring this momentum to our US customers.”
How the Oatly lookbooks came to life
Aside from putting taste at the heart of things, Oatly had been looking to connect more deeply with lifestyle and culture, beyond just food and drink. “The coffee scene is transforming radically and we believe Oatly is uniquely positioned at the heart of this,” says Carroll.
Enter the lookbooks, which COO Daniel Ordonez said were breaking down barriers with “quotes reminiscent of fashion and unexpected recipes that totally change the way in which consumers view oat milk”.
The Spring/Summer 2025 lookbook featured drinks like a maple-miso latte, a salty banana split, and a lacto-fermented blueberry matcha. This month, Oatly released the Autumn/Winter 2025/26 version, offering recipes for a gochujang hot chocolate, a sticky toffee Irish coffee, a carrot cake matcha latte, and a clarified pumpkin spice latte.
“The idea for the Oatly Lookbook came from merging the worlds of food and fashion: a recipe book inspired by the fashion playbook. Oat Couture, if you will,” says Carroll.
“It’s a collection of explorative, Oatly-based serves that tap into both current and emerging flavour trends, giving partners and baristas inspiration and consumers fun, accessible ways to experiment at home. It’s all about showing the versatility of Oatly beyond the everyday flat white and reimagining how people experience flavour.”
The trend report was produced with AI-driven intelligence platform CultureLab and is based on insights from over 200 baristas and industry experts globally. Things kicked off when blind taste tests this year showed that dairy drinkers prefer oat milk in their coffee up to four times more.
“That told us two things,” says Carroll. “First, we really do taste better than cow’s milk, and second, there’s still a big gap between perception and reality around taste. So, we wanted to take our commitment to taste a step further, to show that we don’t just make products that taste great, but that we understand how taste itself is evolving.”
That resulted in the Future of Taste report, which he says is for “anyone with a stake in taste”, from baristas and café owners to those curious about the next wave of flavour innovation: “It explores the trends we believe will define what’s on high-street menus, and in your coffee cup and cupboards, in the months and years ahead.”
Trend report will shape Oatly’s product development and partnerships
The recipes in the lookbooks are developed by an in-house team led by barista development director Toby Weedon and head of food and drinks experience Rowena Roos. They work with a team of 60 barista market development managers, who spend “hundreds of hours in coffee shops” and attend global food and drink events to keep their finger “on the taste and flavour pulse”.
“From this, they pull recipes together by testing, tasting and iterating to land recipes that are both trend and flavour-led and accessible,” Carroll explains.
The company is taking a “multi-pronged approach” to promote the lookbook, amplifying it through an earned, owned and paid campaign. It began with a flagship event in Berlin in early October, convening members from all its Europe, Middle East and Africa markets.
“It was an immersive experience built around our signature drinks, launching the taste report and the A/W Lookbook and featuring masterclasses led by our in-house Barista team, giving guests the chance to taste the trends and see the lineup in action,” recalls Carroll.
“The insights are a really valuable tool to help us stay ahead of emerging trends. We’ll be using them to guide everything from product innovation to the development of our signature drinks, and to inform brand partnerships that align with where taste and culture are heading next,” he says.
Some of the lookbook recipes have already appeared on coffee shop menus and Oatly’s own product portfolio – for instance, it launched a popcorn-flavoured barista oat milk inspired by the sweet and salty popcorn latte in the S/S 25 lookbook.
“Our #1-selling barista edition continues to give baristas and home drinkers the tools to craft indulgent, creative drinks at home,” says Carroll. The full barista range – from an organic version and jiggers to the Lighter Taste edition and the 1.5-litre multipacks – is “designed to be a versatile base for thousands of drink combinations”.
“We’re now building on that versatility by developing more flavour-forward drinks, like our new Oatly Matcha Latte, making big out-of-home trends easier to recreate in-home or serve quickly in high-paced out-of-home environments,” he highlights.
Is Oatly working on a protein oat milk?
One of the major trends highlighted in Oatly’s report revolves around fibremaxxing, the TikTok-fuelled Gen Z movement to, well, max out on fibre in food and drinks.
Fibre, Oatly says, is “coming for protein’s crown”. “Thanks to the gut health boom, we’re seeing fibre experiencing a glow-up. And it’s now the nutrient everyone’s talking about,” its report states. “We know where the protein trend took us… protein in everything! Considering prebiotics are just one subgroup within the fibre umbrella, this would suggest a breakout trend is on the cards.”
But protein is very much the macronutrient of the moment. This year, 70% of Americans are trying to consume it, with one in three increasing their intake. That demand has spawned protein-spiked coffee syrups, cup noodles, Doritos, and water, as well as an expletive-laden rant on late-night TV.
Protein has been a thorn in the side of oat milk, and some brands are now adding pea protein to make up the difference. Has Oatly, whose oat milk contains 1g of protein per 100ml, been tempted to hop on the bandwagon?
“This isn’t something in our plans,” says Carroll. “But we never say never in terms of product innovation.”
He acknowledges that oat milk contains less protein than dairy, but points to the fact that “most people already meet or in some cases even exceed their protein needs through a balanced diet”.
“For now, our focus is on delivering great-tasting, fibre-rich, fortified oat drinks with a lower climate impact, while continuing to explore new opportunities as consumer needs evolve,” he says.
“Our drinks already offer a great balance of nutrients, including fibre, vitamins, and minerals, while being low in salt and saturated fats, and free from added sugars or additives. Oats are also a source of high-quality protein compared with many other grains and have well-documented health benefits, from supporting heart health to maintaining healthy cholesterol levels.”
Matcha latte sells well as Oatly targets Gen Z
Looking to the future of its taste strategy, Carroll states that Oatly will “keep prioritising café partnerships”, as well as exploring “where the next big flavour trends might take us”.
A product born out of this plan was the aforementioned matcha latte, which combines its oat milk with finely ground Tencha matcha. This followed the launch of the Lighter Taste barista milk earlier this year, designed specifically to have a more neutral flavour and let your coffee’s natural tasting notes shine.
Asked about the performance of these products thus far, Carroll says: “Matcha has exceeded all expectations and is selling well in all the markets it has launched in. The Lighter Taste product is a key part of our barista portfolio, which aims to give consumers and baristas a range of flavours and formats.”
Oatly has not been shy about its focus on Gen Z. Speaking to investors in an earnings call this year, Ordonez said of the lookbook: “These are premium signature drinks that tap into Gen Z’s obsession with flavour and cold drinks. Can you imagine any of these drinks with cow’s milk? We don’t think so.”
The trend report builds on this. “People’s daily drink choices, especially younger generations, are being shaped by a world in flux. Drink trends go viral and are seen from London to Seoul, and technology is making it easier to order, customise and share,” it states.
“Tighter budgets mean value matters, but a unique drink is still worth the splurge. Health, sustainability trends and global flavours are blending as a generation raised online is seeking both identity and connection in every cup. What’s popular today provides an insight into a constantly evolving, global, digital culture.”
This will inform how Oatly builds its brand over the next 12 months. “Taste will continue to be our top priority – it’s what people know and love us for. While we already taste great, we’re always exploring new ways to innovate and improve our range as we grow,” says Carroll.
“You can expect to see us keep pushing boundaries with products that make plant-based choices even more delicious, accessible, and of course, sustainable.”
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This post was originally published on Green Queen.