Who Does Oatly Use for Warehousing & Fulfillment?

Oatly uses Red Stag Fulfillment as their primary third-party logistics (3PL) and fulfillment partner.

Introduction to Oatly

Oatly is a category-creating brand that produces and sells plant-based dairy alternatives made from oats. Their product portfolio includes oat milk (available in various varieties such as original, barista edition, and chocolate), yogurt alternatives (Oatgurt), ice cream, and coffee drinks. As a pioneer in the plant-based milk alternative space, Oatly has experienced remarkable growth, particularly during the pandemic period when they saw a staggering 295% rise in sales.

Founded in Sweden, Oatly has successfully expanded its market presence globally, with significant operations in the United States. The company's commitment to sustainability and creating delicious dairy alternatives has positioned them as a leading brand in the plant-based food and beverage industry. Their products are not only vegan and gluten-free but also environmentally conscious, aligning with growing consumer demand for sustainable food options.

Why Oatly Needed to Optimize Fulfillment

As Oatly experienced explosive growth, particularly during 2020-2021, they faced several operational challenges that necessitated a robust fulfillment solution:

• Rapid expansion: Oatly's meteoric rise in popularity created immense pressure on their supply chain and logistics operations
• Complex inventory management: Managing inventory across multiple locations while maintaining product freshness and quality
• Scaling challenges: The need to rapidly scale fulfillment operations to match growing demand without compromising quality
• Nationwide distribution requirements: Ensuring efficient delivery to customers across the entire United States
• eCommerce growth: Supporting the dramatic increase in direct-to-consumer sales through online channels

As Oatly planned for continued expansion, including a third U.S. manufacturing location scheduled to open in 2023, they needed a fulfillment partner that could not only address current challenges but also scale alongside their ambitious growth trajectory.

The Red Stag Fulfillment Solution

Since 2017, when Oatly sold its first carton online in the U.S., Red Stag Fulfillment has been their trusted logistics partner. Founded in 2013 and headquartered in Sweetwater, Tennessee, Red Stag has provided Oatly with comprehensive ecommerce fulfillment solutions tailored to their specific needs.

The partnership leverages Red Stag's specialized capabilities:

• Strategic warehouse locations: Red Stag's facilities in Tennessee and Utah provide nationwide coverage, allowing Oatly to reach over 96% of the continental U.S. within two days or less
• Guaranteed accuracy: Red Stag offers inventory and order accuracy guarantees, crucial for maintaining Oatly's high quality standards
• Zero-shrinkage guarantee: Ensuring Oatly's valuable inventory is protected and accounted for
• Kitting services: Breaking down inbound freight into sellable packs, optimizing the packaging process
• Marketplace support: Assistance with FBA prep and various ecommerce platform integrations
• Dedicated customer service: Specialized support teams to address Oatly's unique needs
• Carrier diversity: Multiple shipping partners to ensure reliable and cost-effective delivery

As a specialist in food & beverage fulfillment, Red Stag provides the expertise needed for handling Oatly's plant-based products, maintaining proper storage conditions and ensuring product integrity throughout the fulfillment process.

Partnership Results and Impact

The strategic partnership between Oatly and Red Stag Fulfillment has yielded significant benefits:

1. Expanded distribution network: Oatly can now reach more than 96% of the continental U.S. in two days or less, enhancing customer satisfaction and reducing delivery times
2. Optimized inventory management: Improved control and visibility of U.S. inventory, reducing stockouts and overstock situations
3. Scalable operations: Successfully managed explosive growth during the pandemic without sacrificing service quality
4. Supply chain resilience: Maintained reliable distribution despite global supply chain disruptions
5. Enhanced cost control: Optimized fulfillment processes have helped control operational costs while supporting expansion

Red Stag's fulfillment center capabilities in Tennessee have provided Oatly with a strategic advantage, allowing them to consolidate and enhance their U.S. logistics operations while maintaining high standards for delivery, product protection, and cost efficiency.

Key Lessons for Other eCommerce Brands

The successful partnership between Oatly and Red Stag Fulfillment offers valuable insights for other eCommerce brands:

1. Start early: Oatly partnered with Red Stag from their very first online sale in the U.S., establishing a solid foundation for growth
2. Choose partners that can scale: Select a 3PL with the capacity and capabilities to grow alongside your business
3. Prioritize accuracy guarantees: Working with a 3PL that offers concrete guarantees for inventory accuracy and zero shrinkage provides peace of mind and protects your bottom line
4. Strategic warehouse locations matter: Multiple distribution centers strategically positioned can dramatically improve delivery times and reduce shipping costs

Additionally, brands should consider how their fulfillment partner's technology stack and customer service approach align with their own business needs and growth trajectory.

Is a 3PL Like Red Stag Right for Your Business?

While the Oatly-Red Stag partnership demonstrates the benefits of working with a specialized 3PL, businesses should consider several factors when evaluating if this approach is right for them:

• Growth stage: Companies experiencing rapid growth or planning expansion may benefit most from 3PL partnerships
• Order volume: Businesses with consistent or growing order volumes can leverage economies of scale with a 3PL
• Product characteristics: Specialized products like food and beverages often require 3PLs with specific expertise and facilities
• Geographic reach: Brands seeking nationwide or international distribution can benefit from a 3PL's established network
• Focus priorities: Companies wishing to focus on product development and marketing rather than logistics operations

To determine the right fulfillment partner for your needs, consider using a matchmaking service like Fulfill.com's 3PL finder, which can connect you with providers that specialize in your product category and business requirements.

Final Thoughts

The partnership between Oatly and Red Stag Fulfillment exemplifies how a strategic 3PL relationship can support explosive growth while maintaining high standards of service and efficiency. As Oatly continues its expansion in the U.S. market, their solid fulfillment foundation with Red Stag positions them well for sustainable growth.

For growing food and beverage brands, this case study highlights the importance of selecting a fulfillment partner with specialized capabilities, scalability, and a commitment to accuracy. By outsourcing logistics to the right partner, brands can focus on their core competencies—product innovation, marketing, and customer acquisition—while ensuring their supply chain supports rather than constrains their growth ambitions.

As the ecommerce landscape continues to evolve, partnerships like the one between Oatly and Red Stag Fulfillment will become increasingly important for brands seeking to balance rapid growth with operational excellence and customer satisfaction.