You may have not heard of Oatside. This delightful new brand is South-East Asia's most buzzy alternative milk brand. Oatside, a new oat milk brand born in Singapore, is one of Asia’s only full-stack CPG brands. Simply put, Oatside is building the Oatly for South-East Asia.
Scaling a new milk alternative in South-East Asia is not an easy accomplishment, considering most of the population are heavy dairy milk drinkers. Here's how Oatside is doing it in one of the most interesting markets to scale a milk alternative. Success is highly defined by critical mass, execution and first to market with a new approach.
Oatside was founded in 2020 by Benedict Lim. Oatside owns their own production line. This means that they are vertically integrated and operate their own supply chain out of Indonesia. This eases time to market and speeds up research and development. One of Oatside’s biggest markets is Indonesia, which is also where it's oat milk factory is also located.
When we go back to the drawing board and take a high-level look at what has made Oatside a fast-growing and successful consumer goods company, It can be broken down into brand, supply chain, distribution.
Oatside is a South-East Asian company. Because of the nature of alternative milk and how pivotal brand positioning is, Oatside smartly decided to adopt a brand style similar to brands South-East Asians are already familiar with. Brands that exist in industries such as fashion, beauty and games. This leans into heavy use of illustration, a brand mascot, a super friendly cheeky tone of voice, bright colors and English as the main language of communication. Oatside's main markets are Singapore and Indonesia. An estimated 70 million more people shopped online in six South East Asian countries since the pandemic began, according to a report from Facebook and Bain & Company. This naturally lends itself to a GTM approach that targets younger millennials and Gen Zs who are drawn initially by branding, shop online frequently, English speakers, college educated, have disposable income from working/pocket money and admire trying out new brands.
I just came back from a trip to Indonesia and adding Oatside to my coffee at a coffee shop was only slightly more expensive than regular milk, and in some coffee shops there was no additional cost. It's safe to assume that money might not be the biggest motivator for Oatside's customers. The beauty of approaching an alternative milk brand like a beauty or game company allows the possibility of experimentation in unique customer experiences, similar to what their target customers are already participating in and experiencing at other brands. This eases the friction to adoption. For example: A love letter to cows and Oatside's "Sommelier" experiences.
Oatside is a vertically integrated brand with a state-of-the-art factory in Indonesia. The power of vertical integration is agility and quality control. Vertical integrated businesses control all design, production, warehousing, logistics, and distribution processes. Although the barrier to entry for vertical integration is an elephant in the room, the upsides are unlimited. Till date, Oatside has raised USD 67.4M (SGD 90.5M). The ability to R&D in record time and bring new products to market cannot be understated. In a market where labor is cheap, and the climate is humid, the more Oatside has in control of their process, the more sustainable Oatside is in the long run and the more effective they are at dominating the alternative milk category. This is most especially true for consumables. In a quote in the Bangkok Post, Benedict Lim, CEO of Oatside says:
"We know that taste is often a barrier for more people adopting sustainable milks, so our goal was to develop an oat milk that could overcome these perceptions. It was a challenge developing the right
product with existing setups at contract manufacturers in the early days, so we took the longer approach of building out our own production line that allowed us more customisation and control over the oat extraction process,"
Distribution is king. An Omnichannel strategy in the early days is one of the smartest things a brand can do. At the center of good business is people, and people are the bedrock of partnerships. South East Asia has a robust coffee drinking culture, especially Oatside's main markets in Singapore and Indonesia. Oatside has leaned into barista partnerships and coffee shops. This includes full-blown activations with popular coffee shop chains and barista led social content. The truth is, consumers love buying what they can see physically every day, and the best champions of milk alternatives are barista's. In this case, it's important to note this because Oatside has not leaned into a form of marketing that leads heavily with a better for your "health" approach. Simply put, South East Asia is not the best market to lead with a diet or health approach. To put this into context, I tried a Keto diet on my trip, and it was taxing to find niche diet food options compared to the U.S. Oatside's approach is simple: Their milk is just better. It tastes delicious and froths beautifully.
Deciding on how to scale a product is both an art and a science. It’s important for brands to invest in research and intelligence for new development so that all assumptions are discarded, and informed decisions are made. It's also important to note consumer behaviors fueled by culture, religion and lifestyle. A physical retail strategy is an extremely powerful distribution force. Taking a more physical approach provides insight; it can also build a community and foster lasting relationships through a focus on not just customer satisfaction, but the entire customer experience. It helps that the milk box is photo worthy and designed beautifully to suite the taste of their customers, who love to take pictures and share on their socials. Oatside doesn't sell full milk boxes at all the coffee shops it’s available in. Customers can take their tastings and head to one of the several supermarket giants in South East Asia that stocks Oatside or go to Oatside's online store, buy a full bottle and enjoy by themselves or with friends and family. The cycle continues.
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About the Author:
Onanma Okeke is the CEO and co-founder of Lanor, a retail tech startup. She is also the organizer of Porte, a modern retail conference. She is obsessed with the science of scaling consumer brands and particularly the why, how, when and what behind every buying decision a consumer makes. You can find her on LinkedIn. Say hi here: onanmaokeke@gmail.com. She's lives in New York and is open to coffee.
