Oatly’s Business Model
Here’s how a company like Oatly might map their Sustainable Business Model Canvas. This shows how to actually fill in each section with real details.
Standard BMC Sections
Customer Segments
- Health-conscious consumers seeking dairy alternatives
- Environmentally aware millennials and Gen Z
- Lactose-intolerant individuals
- Baristas and coffee shops wanting plant-based milk options
Value Propositions
- Dairy-free milk that tastes like milk and works in coffee
- 73% lower carbon footprint than cow’s milk
- No lactose, no soy, no nuts (common allergen-free)
- Designed for baristas (foams well, doesn’t split)
- Transparent about environmental impact
Channels
- Retail: Supermarkets, health food stores
- Food service: Coffee shops, restaurants
- Direct: Online store
- Geographic expansion: Start Sweden, expand Europe, then global
Customer Relationships
- Brand community around sustainability
- Educational content about climate impact of food choices
- Direct engagement on social media
- Partnership support for coffee shops
Revenue Streams
- Product sales (retail and food service)
- Premium pricing justified by quality and sustainability
- Growing market share as dairy alternative category expands
Key Activities
- Oat processing and production
- Product development (new flavors, formats)
- Marketing and brand building
- Supply chain management
- Sustainability measurement and reporting
Key Resources
- Oat processing facilities
- Brand and intellectual property
- Supply relationships with oat farmers
- Distribution network
- Sustainability expertise and credentials
Key Partners
- Oat farmers (especially in Scandinavia)
- Co-manufacturers in different regions
- Retailers and distributors
- Coffee shops and food service partners
- Packaging suppliers
Cost Structure
- Raw materials (oats, enzymes, vitamins)
- Manufacturing and processing
- Packaging
- Distribution and logistics
- Marketing and brand building
- R&D for new products
Sustainable BMC Additions
Eco-Social Costs
Environmental:
- Water usage in oat farming and processing (though much less than dairy)
- Energy consumption in production facilities
- Transportation emissions (especially international shipping)
- Packaging waste (Tetra Pak cartons, though recyclable)
- Land use for oat farming
Social:
- Potential monoculture impact if oat demand scales unsustainably
- Labor conditions in manufacturing facilities
- Displacement of dairy farmers as market shifts
Measurement approach:
- Life Cycle Assessment for all products
- Annual carbon footprint reporting
- Supply chain audits for labor practices
Eco-Social Benefits
Environmental:
- 73% lower greenhouse gas emissions vs. dairy milk
- 60% less energy use than dairy production
- Significantly less water usage than dairy or almond milk
- No methane emissions from livestock
- Potential for regenerative oat farming practices
Social:
- Education about food system climate impact
- Support for sustainable farming practices
- Creation of plant-based food jobs
- Improved nutrition access for lactose-intolerant populations
- Shift toward more sustainable food system
Measurement approach:
- Third-party verified carbon footprint calculations
- Annual sustainability reports with specific metrics
- Transparent communication about environmental impact
- Regular supply chain sustainability audits
The Balance Sheet
Net Impact Assessment:
Oatly’s model creates significantly more eco-social benefits than costs. The primary environmental benefit - massive emission reductions compared to dairy - outweighs the costs of production and distribution.
The social impact is more mixed. While they create jobs and improve nutrition access, rapid growth could strain supply chains and impact dairy farming communities.
Model Improvements Based on SBMC:
- Packaging innovation: Transition to fully renewable or reusable packaging to reduce waste
- Local production: Build regional facilities to reduce transportation emissions
- Regenerative agriculture: Work with farmers on carbon-sequestering oat farming
- Dairy farmer transition: Programs to help dairy farmers transition to oat production
- Renewable energy: Power all facilities with 100% renewable energy
- Circular economy: Take-back programs for packaging or explore refill models
Key Insights from This Exercise
What the SBMC revealed:
- The core value proposition (dairy alternative) is inherently sustainable
- Transportation is a major eco-social cost that needs addressing
- Packaging waste is the biggest improvement opportunity
- Social benefits (climate education) are as important as environmental ones
- The business model gets MORE profitable as it becomes more sustainable (economies of scale reduce per-unit environmental impact)
How this drives strategy:
- Prioritize regional production expansion to reduce emissions
- Invest heavily in packaging R&D
- Build farmer partnership programs
- Double down on climate education marketing
- Track and report sustainability metrics as competitive advantage
This example shows that the best sustainable business models solve problems in ways that are inherently more sustainable than alternatives. Oatly doesn’t make dairy milk “greener” - they replace it with something fundamentally different.
Your Turn
Now take your own business idea and fill out the Sustainable Business Model Canvas:
- Start with the standard nine blocks
- Honestly assess your eco-social costs
- Identify real, measurable eco-social benefits
- Evaluate if benefits outweigh costs
- Identify specific improvements to make your model more sustainable
Use the template provided and be as specific as possible. Vague claims don’t help you build a better business - concrete details do.