Identifying an Addressable Need

I recently came across an analysis by someone showcasing the success of the oat milk brand called Oatly and how they created a need that led to their success.

I have a slightly different take on Oatly’s success in that they didn’t create a need but rather, they identified an addressable need in the consumer market, developed their product to suit the addressable market and designed their packaging and campaign that speaks to the addressable market.

Why is it addressable and why is it not a need creation in their case?

First of all, looking at the fundamental principles of the hierarchy of needs, oat milk in itself is not new. Oatly was not the one who first came out with Oat milk as an alternative to other plant milk varieties that are not from nuts, legumes or fruits. People don’t need Oatly as yet another oat milk alternative. Even for the use in beverages, especially coffee drinks for example, Oatly is not the first entrant in this market.

If you look at the consumer and fast moving consumer good space. there aren’t that many products that are really needs based in this modern day and age. Ask yourself in all seriously as a consumer, do you really need to have say a burger or a pizza or that soft drink? For such cases, what brands and companies are creating is a want and not so much a need, which makes it a lot harder of course.

How we can take a step further however to see if these wants actually can be addressed at a deeper layer, going into the consumer psyche and how we think, behave and act, perhaps there is an addressable need tagged to that specific want. For example, consumer A, let’s call him Billy, wants to eat pizza because it makes him feel good and why does it make him feel good? It reminded him of his grandma who used to make really nice pizzas for him when she’s still around. It makes him feel safe, warm and loved whenever he thinks about pizza now. The feeling of loved, security and safety is a need and not a want as we all know.

This is where the fundamental need that can be addressed by a company who wants to give their consumers the same warm, fuzzy, safe and feelings of love with their pizzas is more likely to win over consumers and build a sustainable brand versus a company that just serves pizzas to make money from pizza lovers.

In Oatly’s case, they identified an addressable want by consumers who are avid coffee drinkers who might fall into a few categories:

1) those who are lactose intolerant or vegan or just prefer not to take dairy with their coffee but yet prefer not to have black coffee

2) those who in 1) but are allergic to nuts or don’t like the taste and thus have been relying on other plant milks like soy or coconut

3) those falling into 1) and 2) but who don’t quite like the tastes of other current plant milk types available

Looking at the wants and preferences of the consumers, we can also look at what are the underlying needs of the consumers who don’t take dairy and prefer plant milk in general that are being addressed. For example, it might be a feeling of being healthier, which is more basic survival or a feeling that they are doing their part in supporting the rights of animals, which is more altruistic or self actualization.

I find that doing an extensive mapping by going back to basics of what your target consumers want and need helps to better identify what is that addressable need that you as a brand or company can cater for ultimately to form your proposition.

Going back to Oatly’s case, after they have identified the preliminary wants and needs, they would be looking at pain points their consumers are facing based on how, where and when they are consuming plant milk. In this case, oat milk is not new to the market, including in the coffee shops but it is just beginning to make some headwinds. Almond was the first to lay claim and make their presence felt after soy was dominating for a while as the alternative milk for barista brewed coffees. Oatly would have studied this for a while and gotten some feedback from prospective customers who are avid drinkers of coffee paired with plant milk, once they decided this would be a good place to target in terms of their distribution network.

They would need to consider not just the taste of their product when brewed with coffee but the price point as well both on the consumer side and the business side, meaning the cafe owners who will be buying the stocks from them before they developed their barista edition oat milk. If there are already a few other plant milk or early entrant oat milk varieties being supplied, what would be that key differentiator so Oatly can win? They would need to think about product variations to cater for standalone oat milk drinkers versus coffee drinkers who choose plant milk over dairy.

At this point, it wouldn’t just be the packaging. It would be taste, quality, price and ability to retain their flavour or even their flexibility in order quantities, inventory management and payment management, especially for smaller cafes.

This article is just a high level of how I personally like to work with brands as a marketer, on their positioning and campaigns. It’s not meant to be an exhaustive list as there is much more to think about. But for starters, as marketers, we should always go back to the fundamental principles of the consumer psyche, marketing principles, proposition and business viability when working on our campaigns.

About the Author

Mad About Marketing Consulting 

Ally for CMOs, Heads of Marketing and C-Suites to work with you and your marketing teams to maximize your marketing potential with strategic transformation for better business and marketing outcomes.