Oatly’s own team boosts awareness, just don’t call it an in-house agency

Oat milk marketer Oatly is one of the hottest brands in food and beverage thanks to ads with a bold voice that are done completely in-house. Just don’t thank the in-house agency—because Mike Messersmith, the brand's U.S. general manager, asserts the brand doesn’t actually have one.

He rejects the term "in-house" because "that still implies a bit of the somewhat transactional nature of briefs and separation," he told Ad Age in an interview at last week's Association of National Advertisers' "Masters of Marketing" conference in Orlando. There is no official marketing department and there aren’t brand managers because the company wants to eliminate any barriers between the creative work and the strategy.

“When we can remove those impediments, we think we come up with more relevant, interesting advertising that makes people actually consider the product and the food in a different way,” he said.  Rather than reviewing brand awareness studies or demographic positioning, they focus on the brand voice. "The only standard is, is it world-class? If it’s not, we should go back and try to do it better,” Messersmith told attendees.

Messersmith is part of a team that has put oat milk on the map in the U.S., with spots that run during podcasts, outdoor posters, print ads on the back of magazines and other approaches, all with very little spent on social media.

Oatly was available in 15 U.S. coffee shops at the beginning of 2017 and is now in more than 7,000, Messersmith said during a presentation at the ANA event.

He knew Oatly was taking off when his local Irving Farm coffee shop on Manhattan’s Upper West Side ran out of the product during a brand-wide shortage. The shop informed customers with a hand-written sign on the door quickly followed by a printed one that suggested a lengthier supply problem. “I literally rerouted my subway commute to go an extra block out of the way … because I couldn’t handle the shame of that,” he said. 

Oatly was started in Sweden in the early 1990s and came to the United States in late 2016. Messersmith joined the next year when oat milk was still such an unfamiliar product that his parents, upon hearing of Messersmith’s new gig, congratulated him for going to work for an oatmeal company, he said. That said, a major oatmeal company is no longer a competitive threat. PepsiCo Inc.'s Quaker attempted to crack into the market earlier this year with Quaker Oat Beverage. After a matter of months, PepsiCo confirms that beverage is no longer being sold. Oatly continues to face competition from the likes of brands such as Califia Farms and Pacific.

Messersmith was asked about the term oat milk during the conference. Dairy groups support proposed legislation known as the "Dairy Pride Act" that would make the terms milk, yogurt and cheese applicable only to dairy products. Oatly sticks with a singular brand name but changes descriptive wording to meet the regulatory requirements wherever its sold, said Messersmith. In the U.S. it goes by oat milk, but in the EU it's oat drink, for example.

“I want to make it easy for consumers to understand what my product is,” said Messersmith. “What it’s made from is oat, what you use it for and what it’s like is like milk.” And, knowing some dairy industry attendees at the ANA were likely listening, he added: “The dairy industry could start calling their product cow’s milk, that would be incredibly descriptive.”

Oatly’s creative is all done internally. Its media agency is PHD. Marketing has included sending 1,500 stickers with an illustration of CEO Toni Petersson’s face to listeners who reached out after hearing a spot during “Pod Save America.” The company’s creative director, John Schoolcraft, is in meetings on everything from operations to sales tactics, Messersmith said. (Schoolcraft and another creative director, Martin Ringqvist, work in the Oatly Department of Mind Control, based on their listings on the Cannes Lions site that give a sense of the brand's voice.)

Messersmith wasn't the only one giving the term in-house agency a bit of a bad rap at the conference. Chobani Chief Creative Officer Leland Maschmeyer said he doesn’t believe the yogurt company built an in-house agency.

“It’s usually the term applied to what we’ve done but I actually don’t see it that way," Maschmeyer said in a separate presentation at the conference. "I don’t believe we actually built an in-house agency. We actually built a progressive marketing department that has infused creativity into everything it does and uses creativity as a strategic imperative for creating growth. But that’s a mouthful," he said at the start of his presentation (Chobani was named Ad Age’s Internal Agency of the Year in April). 

Back to Messersmith, who coincidentally worked on Chobani earlier in his career before Maschmeyer joined the yogurt maker. He says he has worked at progressively smaller organizations, trying to focus on brands that have their values front and center.

“The values really drive every choice we make and that was clear to me,” he said of Oatly in the Ad Age interview. “That helps clarify strategy and build on everything we do.”

Hear more from Messersmith on how other brands can take the same approach in the video above.