Oatly launches climate footprint labels in the U.S.

Oatly will this month debut climate footprint labels on four of its plant-based yogurts, known as Oatgurts, in the U.S., and 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 roughly a third of human-made greenhouse gas emissions globally, and raising and feeding livestock is the largest contributor to that carbon footprint. Beef is the single most climate-intensive food, followed by other meats. Dairy products can also have relatively high footprints compared to plant-based foods.

In the U.S. market, plant-based dairy has a clear foothold. There were $2.4 billion worth of plant-based milk sales in U.S. retail stores over the 52 weeks ending on Jan. 1, compared with $15.7 billion in U.S. dairy milk sales, according to tracking from data firm IRI. Within plant-based milk, oat milk was the fastest-growing segment: IRI data shows oat milk sales hit $521 million during the same 52-week period, with dollar sales up 34% year over year.

Oatly starts by calculating the greenhouse gas emissions of its foods using what’s called a life cycle assessment – meaning it captures the carbon dioxide and other emissions from “grower to grocer,” according to Kunen. The calculation is then verified by an outside company called CarbonCloud. It includes the production of agricultural inputs, the impact of transport, manufacturing, processing, packaging and distribution, but does not include customer use and disposal. Mike Berners-Lee, a carbon footprint consultant and an environment professor at Lancaster University in the United Kingdom, says those exclusions are “sensible,” because what the customer does with something like milk is “trivial” from a climate perspective and “not something that’s particularly in their control.”

All of this information is then distilled into a single number, presented as kilogram of carbon dioxide equivalent per kilogram of packaged goods (kg CO2e/kg). Labeled “climate footprint,” that number will be displayed prominently on the front of Oatly products. On the back, listed below the nutritional facts, the company discloses the date the climate analysis was done, mentions CarbonCloud is the source and includes a website url (oatly.com/footprint) where customers can find more information.

According to Oatly and CarbonCloud’s calculations, the climate footprints of 16 of its U.S. products range from 0.62 to 1.9 kg CO2e/kg. (The company hopes to include climate footprint for the rest of its U.S. products in the future.) Separate estimates from the U.K. nonprofit Our World in Data show that the greenhouse-gas footprint of a liter of dairy milk is 3.15 kilograms, compared with 0.9 kilograms for a liter of oat milk.

Oatly has “a legitimate story behind it,” says Berners-Lee, author of “The Carbon Footprint of Everything,” “because the carbon footprint of oat milk is a lot less than the carbon footprint of dairy milk.”

This isn’t Oatly’s first foray into climate labels. The Swedish company, which went public in May 2021 but has seen its stock price fall 89% since, began putting similar climate labels on its vegan products sold in Europe in 2020.

Kunen said the ultimate goal is for customers “to be in a position to compare the climate impact of different products that they can pick up from the grocery aisle, just like they can for nutrition.” For that to happen, other companies would need to start disclosing these same details. As of now, few companies share climate footprint information and there’s no standard in place for those that do.

But as brands and climate researchers start to engage with effective ways to highlight climate impact through labels, debate still rages over the nutrition equivalent. Just this month, the U.S. 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.