In Conversation
How to build a better subscription business
Oats Overnight gets 90% of its DTC customers to subscribe immediately. Founder Brian Tate shares its strategy.
By Dan Frommer on Friday, June 6, 2025 at 8:00 am
For many consumer brands, getting people to become subscribers via direct-to-consumer e-commerce is as good as it gets: Higher margin, higher lifetime value, and an engine for continuous growth.
Few food brands, however, have been able to build the sort of subscription DTC business that Oats Overnight has.
The company, which sells overnight oats kits in flavors like Space Brownie, Glazed Blueberry Donut, and Caramel Cold Brew, is into the nine figures in revenue, and has projected 80% growth this year.
Around 90% of its DTC customers subscribe on their first order, founder and CEO Brian Tate tells me, and 94% of its e-commerce revenue is subscription-driven.
Oats Overnight has even been able to improve its direct subscription business as it has expanded onto Amazon and into retail, including Costco, Target, and Whole Foods.
It also uses its subscriber base as part of its R&D machine, by continuously collecting feedback on new flavors in development — and to make tweaks to existing flavors — to maximize craveability and retention. It’s even incubating a new side business, a high-protein instant coffee mix, among its subscribers.
For more details, I recently spoke with Tate. What follows is a lightly edited version of our conversation. Become a Member and listen to the full conversation by adding The New Consumer Audio Edition feed to your podcast player.
In this interview:
- How Oats Overnight gets 90% of first-time customers to subscribe immediately
- Why the company uses continuous formula tweaks to drive 20%+ annual LTV growth
- Tate’s framework for deciding when vertical integration makes sense
- The counterintuitive move that improved payback periods when CAC spiked
- How retail expansion grew rather than cannibalized subscription revenue
- What “extreme flavor variety” reveals about retention and customer behavior
- Using subscribers as an R&D engine for new product development
Dan Frommer: Thank you so much for your time, Brian. To start off: What is Oats Overnight? What’s the product? What size and stage is the business now? And then perhaps a little bit about your unconventional founding background, too.
Brian Tate: Thank you for having me. Oats Overnight is a high-protein oatmeal shake that we launched in 2016 — we’re coming up on nine years. We have 60 different flavors, 20 grams of protein. You make it at night and it’s ready when you wake up. Our consumers enjoy this out of a shaker cup — so, basically, a spoon-free, high-protein oatmeal.
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Hi, I’m Dan Frommer and this is The New Consumer, a publication about how and why people spend their time and money.
I’m a longtime tech and business journalist, and I’m excited to focus my attention on how technology continues to profoundly change how things are created, experienced, bought, and sold. The New Consumer is supported by your membership — join now to receive my reporting, analysis, and commentary directly in your inbox, via my member-exclusive newsletter. Thanks in advance.