In the latest episode of the Let’s Chew podcast, Caroline Reid, Sustainability Director at Oatly, joins us for a deep dive into what it takes to take an F&B business to make real, big changes in the industry. Known globally for turning oats into dairy alternatives, Oatly is now doing something far bigger. It has become the first F&B brand to be officially recognised as a Climate Solutions Company.

This is not about marketing. It’s about meeting a new global standard for how food brands can reduce emissions and help fix a broken system.

Redefining Climate Leadership

At a time when net-zero claims are commonplace, Oatly is helping raise the bar. Together with the Exponential Roadmap Initiative, Oxford Net Zero, and the UN Race to Zero, it helped create a guide that defines a 'climate solution' as something that causes at least 50% less harm to the planet than what it replaces.

“For us, that means our oat drinks need to consistently outperform cow’s milk across every stage of production, distribution and disposal,” says Reid. “We have the data to prove that they do.”

Currently, more than 90 percent of Oatly’s global revenue comes from products that meet this definition. This milestone earned them the title of certified Climate Solutions Company. And this is just the beginning, says Reid.

Regenerative Agriculture and the Real Cost of Change

Oatly’s biggest climate advantage is what it leaves out. No cows means no methane emissions from digestion and no carbon-intensive animal feed. But it doesn’t end there.

The company is now scaling regenerative farming across its oat supply in Sweden and Canada. It has already committed to shifting one third of its oat sourcing to regenerative practices by 2030.

“We support farmers directly and pay them more to make the transition,” Reid explains. “It’s about improving soil health, capturing carbon and supporting long-term food security.”

It’s a shift from simply being sustainable to actively restoring agricultural systems. According to Reid, it’s not just good for the climate but also for resilience, biodiversity and yield.

Transparency Comes Standard

One of Oatly’s more subtle but powerful actions was introducing on-pack climate labels back in 2019 with each product listing its carbon footprint in kilogrammes of CO₂.

“In every other industry, people expect transparency. Why not in food?” Reid asks. “We don’t expect everyone to change their behaviour overnight, but they should be given the facts.”

The aim isn’t to shame consumers but to enable them to make informed choices. Reid believes clear, consistent climate labelling will soon be expected across the board, particularly as regulation catches up.

Changing the Default

Oatly believes real change will come when policy supports plant-rich diets. Reid highlights how outdated subsidies and procurement schemes still heavily favour conventional dairy and livestock, making it harder for alternative products to compete fairly.

She points to schools and government food programmes as key areas for action. “Imagine if plant-based options were the default in public procurement. That’s where we need to get to.”

In the Middle East, Oatly is already seeing strong consumer demand. It now leads the dairy category at Spinneys across both dairy and alt-dairy, thanks in part to regionally inspired signature drinks like caramel tahini oat lattes.

“Taste brings people in, but the purpose keeps them loyal,” Reid says.

Leveling the Playing Field

Despite growing demand, plant-based producers still face barriers. Reid highlights how in markets like Germany, dairy is taxed at 9 percent while plant-based options are taxed at 19 percent.

“This isn’t about giving us an edge. It’s about fairness,” she says. “Food that benefits the planet shouldn’t be penalised.”

As climate commitments become more urgent, Oatly is advocating for changes that allow climate-positive choices to scale, become more affordable and reach new markets.

Moving Beyond the Product

As part of its updated climate strategy, Oatly now focuses on three core areas.

• Product: Creating alternatives that significantly reduce emissions
• Portfolio: Supporting practices like regenerative farming across supply chains
• Policy: Advocating for better regulation and fairer subsidies

The company sees its role as not just making a sustainable product but helping change the entire system.

“It’s not enough for one brand to hit net zero. The whole food sector has to shift,” Reid says. “We need better rules, more collaboration and companies willing to lead.”

Why This Matters for F&B Professionals

For sourcing leads, procurement heads, sustainability teams and food investors, this episode offers a clear, practical view into what future-facing food brands are doing right now. From climate labels and regenerative farming to portfolio-level strategy, Oatly’s story is a working case study in how ESG goals can move from strategy decks to store shelves.

Listen to the full episode of Let’s Chew podcast with Caroline Reid on all listening platforms or at gulfood.com/podcast

Explore more on climate solutions and more at Gulfood 2026 this January in Dubai – visit www.gulfood.com