In case you didn’t know, Oatly are a Swedish-owned vegan food brand who specialise in producing dairy alternatives with oats. They are dominant in the UK’s plant-based universe; providing oat varieties of milk, ice cream, custard, cream and yoghurts. Plus, they are a conscious company who profess to deliver nutritional products that have a little impact on the environment. Oatly pride themselves in being an independent brand who can exercise their own ethics over their production methods and products, unlike their massive food corporation counterparts. All in all, they seem like a stand-up choice for your average ethical consumer, or are they?
Why have Oatly been hitting the headlines?
A bit of a storm has been brewing around Oatly recently as the news of their investment deal with Blackstone, a private equity firm, hit social media. Blackstone invested 200 million USD in the small Swedish company, to allow them to extend their production throughout the world as demand for their plant-based alternatives soars. This now means that Blackstone own 10% of the Oatly franchise. However, Blackstone’s values don’t exactly mirror those of Oatly’s.
Who are Blackstone?
Herein lies the problem: Blackstone are not a sustainable company. They are a global investment business of which billionaire Stephen A. Schwarzman is the CEO. Schwarzman has donated 3.7 million USD to Donald Trump’s re-election campaign, which is red flag number one. Blackstone also part-own a Brazilian company, Hidrovias, who are driving deforestation in the Brazilian Amazon. Hidrovias have helped to construct a road which spans hundreds of miles through the Amazon rainforest to one of their shipping terminals. This road is to facilitate easier movement of grain and soybeans. Not only did the creation of the road in question cause deforestation, but it was constructed in the name of grains and soy, the farming of which is another driving factor in the destruction of the rainforest.
Moreover, Blackstone part-own the company Kosmos who specialise in oil and gas exploration and are, therefore, a major contributor to climate change. Blackstone have also been accused of contributing to the global housing crisis by the UN due to their investment in property throughout the world. Much of their property portfolio was snapped up after the 2008 bank crash to aid economic recovery. Blackstone and their associate housing companies are notorious for escalating housing costs, hiking rent and pursuing eviction of tenants to maximise profits. This has been particularly harmful practice in the wake of the coronavirus pandemic. To summarise: Blackstone are not at all like Oatly.
What does this mean for Oatly customers?
Well, in short, it means that the purchase of a much-loved Oatly product also contributes to funding: Trump’s re-election, Amazon deforestation, the fossil fuel industry and the global housing crisis. That’s not quite what consumers were hoping to stir into their morning coffee. The realisation of this has caused many loyal customers to pause their consumption of Oatly products and to demand answers from the brand for not adhering to their self-professed ethical standards.
Here’s what Oatly had to say:
|“We thought that if we could convince them [Blackstone] 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.”|
Oatly have admitted that they expected backlash from their collaboration with Blackstone. They have essentially said that they want to create change from within and convince big investors that the sustainable sector will make them the same kind of profit as their current, less ethical partnerships. It’s a bold move, that’s proved to be extremely controversial.
So, what next?
As consumers, it’s our job now to each decide how we feel about this investment and act accordingly. Unfortunately, in our capitalist, profit-driven world, none of our purchases are straightforward. It can be hard to know the chain reaction of your money when you invest in a product. Many small companies are propped up by giant corporations who don’t share the same ethics. You could argue that any growth of small, sustainable brands is positive, and we should invest in them to create a market need. However, you could also argue that ethical brands, like Oatly, have put profit over planet when accepting dirty money from sources like Blackstone. I certainly don’t police the ethics of every company I buy from, it just hits a little different when an ethical company makes a move like this.
It is worth noting that this Oatly-Blackstone storm has shown the true power of consumer voice. After an explosion of the news on social media, Oatly released their company statement to clarify why they chose Blackstone. They connected with customers across all media channels and reached out to sustainability influencers to chat about the investment. If you are an unhappy consumer, use your voice and your purchase power to send a message. It just might make a difference. For now, I’m choosing to investigate alternative oat milk brands whilst I decide how I feel about Oatly’s new move.