Oatly Introduces Climate Footprint Labels in the US

Oatly Group AB will this month debut climate footprint labels on four of its plant-based yogurts, known as Oatgurts, in the US.

The company plans to update the labeling on 12 additional products sold nationwide over the next two years. Starting on Tuesday, climate details for these 16 Oatly products will also be available online.

“We’re in the business of driving an impact to the food system through converting consumers from dairy products to their Oatly equivalents,” says Julie Kunen, Oatly’s sustainability director for North America. “We do this by trying to make them as delicious as possible. We also want people to be aware that those are sustainable choices.”

The food system is responsible for a significant portion of human-made greenhouse gas emissions globally. Raising and feeding livestock is the largest contributor to that carbon footprint, with beef being the single most climate-intensive food. Other meats and dairy products also have relatively high footprints compared to plant-based foods.

Plant-based dairy products are gaining ground in the US market. According to data from IRI, sales of plant-based milk products totaled $2.4 billion in US retail stores over the 52 weeks ending January 1, compared with $15.7 billion in sales of dairy milk products. Oat milk was the fastest-growing segment of the plant-based milk market, with sales of $521 million during the same 52-week period, up 34% from the previous year.

Oatly calculates the greenhouse gas emissions of its foods using a life cycle assessment, which captures the carbon dioxide and other emissions from the production of agricultural inputs to transport, manufacturing, processing, packaging, and distribution. The calculation is verified by an outside company called CarbonCloud. Mike Berners-Lee, a carbon footprint consultant and an environment professor at Lancaster University in the United Kingdom, says the exclusions of customer use and disposal are "sensible" because the customer's impact on climate from these activities is "trivial."

Oatly displays a "climate footprint" on the front of its products, which is a single number representing kilogram of carbon dioxide equivalent per kilogram of packaged goods. This number is calculated by CarbonCloud and is meant to show customers the environmental impact of the product. The climate footprints of 16 of Oatly's US products range from 0.62 to 1.9 kg CO2e/kg. This is compared to the 3.15 kilograms of greenhouse-gas emissions for a liter of dairy milk.

The footprints take into account emissions from the grower to the grocer.

The footprints of packaged food are expressed in terms of the amount of carbon dioxide equivalent (CO2e) that would be produced if that food were burned.

This isn't Oatly's first foray into climate labels. The Swedish company began putting similar climate labels on its vegan products sold in Europe in 2021. Despite going public in May 2021, the company's stock price has fallen 89% since.

Kunen believes that customers should be able to compare the climate impact of different products before they purchase them, in the same way that they can compare nutritional information. However, few companies currently share climate footprint information, and there is no standard way of doing so. As brands and climate researchers begin to explore ways of highlighting climate impact through labels, there is still debate about the best way to display this information. This month, the US Food and Drug Administration announced plans to launch consumer research into better ways to display nutritional information, including putting the details on the front of packaging.