Vegan milk brand Oatly is facing protests by climate and political activists who say the decision to sell a stake in the company to a consortium that includes Blackstone, a powerful private equity firm headed by Trump donor Stephen Schwartzman, has left a sour taste.
The $200m deal for the Swedish oat milk brand, favored by many vegans and non-dairy drinkers and considered one of the most sustainable non-dairy milk brands, was agreed in July.
But now the agreement, which valued Oatly at nearly $2bn and involved investors including Oprah Winfrey, Natalie Portman, former Starbucks chief Howard Schultz and the entertainment company founded by Jay-Z, is coming under scrutiny.
A Twitter thread appeared over the weekend that linked Blackstone to a controversial Brazilian infrastructure investment that has been accused of contributing to deforestation in the Amazon.
Blackstone has previously been targeted for investments in Hidrovias, a Brazilian infrastructure company, which has previously been accused of having links to deforestation in the Amazon rainforest.
Blackstone has denied the accusation, saying in a statement: “The erroneous claims and mischaracterizations were blatantly wrong and irresponsible.”
On Tuesday, the company reiterated its position that Hidrovias was not involved in a road through the Amazon rainforest used to transport soy grown on illegally deforested land and had won awards for its sustainability efforts.
“Hidrovias does not own, control or have any interest — direct or indirect — in the road in question (BR-163). This road has been operated by the Brazilian government since 1976. The company did not build this highway, nor are they paving it,” Blackstone said.
Notwithstanding that accusation, Blackstone’s Schwartzman has been a prominent Wall Street supporter of Donald Trump. According to Bloomberg, the billionaire investor has donated $3m to Super Pac America First Nation, which supports the president’s re-election.
Oatly has now been placed in the position of defending the deal. In a statement posted on Twitter, the company said Blackstone may be an “unexpected choice”, but the investment “will help us expand our sustainable mission and create more plant-based products”.
The company added: “It also steers capital that would’ve otherwise gone into another commercial investment into sustainability instead, making their investments greener.”
But that has yet to placate critics. The original Twitter thread’s creator, activist Laura Young, wrote: “I don’t want my money going to the destruction of the planet, and putting peoples lives and land at risk just so that I can have a creamy coffee in the morning!”
Oatly responded to that thread, offering: “We’re sorry to hear you’re frustrated in our choice – we’re still the same company with sustainability at the core of everything we do. Which includes who we choose as owners, as we need to move global capital in a sustainable direction if we’re to see real change.”
The company added: “If we just shut out the companies that may make less sustainable choices, we won’t give them the chance to improve and make more sustainable choices, so global capital will keep being steered in a less sustainable direction.”
When it was signed, the deal underscored the growing popularity of plant-based foods. Oat milk’s popularity is soaring – sales in US stores grew nearly 300% year-over-year to June, according to Nielsen data.
Founded in the 1990s by brothers Rickard and Björn Öste, Oatly entered the US market four years ago. Last year sales doubled over 2018 to about $200m. It expects to have similar growth this year, according to reports, and plans to use the investment to more widely distribute its oat-based yogurt, spreads, on-the-go drinks and ice cream.
