In early 2021, Sweden-based Oatly was the darling of the plant-based movement.
But in the years since, enthusiasm for the company has soured as it’s faced a variety of problems.
A look back
Oatly, a food company that produces alternatives to dairy products from oats, was soaring in popularity leading up to its IPO in the U.S. in 2021.
The company’s revenue doubled in 2020, reaching $421 million, as it steadily expanded around the world.
Baristas and cafes flocked to the product, touting its creamy texture. An grocery stores helped make it a staple alongside other plant-based milks.
Cratering stock
Oatly’s IPO in May of 2021 went better than expected.
Oatly opened at $17 per share — setting an implied valuation of $10 billion — and closed at $22 per share. The company hit a high of $28 per share in June of 2021.
Fast forward to today, and Oatly’s stock has tanked about 95% from its high is at roughly $1 per share.
What happened?
Shortly after its IPO, a hedge fund accused Oatly of overstating its revenue and misleading investors about its products’ sustainability.
Activist short seller Spruce Point Capital Management accused Oatly of shady practices and greenwashing, which seemed to kickstart Oatly’s decline in the stock market.
Spruce Point specifically alleged that Oatly's investor presentation used outdated data and omitted the environmental impact of its expansion. The hedge fund also claimed Oatly cherry-picked data to downplay its water consumption.
Recalls
In November of 2021, Oatly’s stock dropped even further thanks to concerns about product quality and delivery delays, stemming from issues with its North American manufacturer.
In August 2022, 5 Oatly products were recalled due to potential contamination with harmful bacteria, leading to health concerns and subsequent lawsuits against Oatly, Target, and Starbucks.
Greenwashing settlement
The company’s latest headline is a $9.25 million settlement announced in February following Spruce Point’s accusations of greenwashing.
The settlement is the third revision of the lawsuit after the dismissal of two previous claims against Oatly.
Down but not out
Despite challenges, Oatly has reported some steady growth.
The company reported year-over-year revenue growth of 8.5% to $783.4 million for 2023. The company has also shifted away from in-house manufacturing, which it hopes will offer more predictability and higher margins.
